An Introduction to Over-the-Counter (OTC) Crypto Trading with a Bank

May 1, 2023

Over-the-Counter (OTC) crypto trading with a bank is a popular option for investors looking to trade large volumes of cryptocurrency. In this article, we will provide an introduction to OTC crypto trading with a bank, including what it is, how it works, and its benefits compared to trading on cryptocurrency exchanges.

What is OTC Crypto Trading?

OTC crypto trading is a type of cryptocurrency trade that takes place between two parties without the use of an exchange. In an OTC trade, the buyer and seller negotiate the terms of the trade, including the price, and the transaction is settled outside of the exchange. OTC trading is typically used for large trades, where the amount of cryptocurrency being traded is too large to be accommodated by an exchange.

How Does OTC Crypto Trading with a Bank Work?

OTC crypto trading with a bank works similarly to traditional OTC trading but with the added benefits of a bank’s resources and expertise. Banks that offer OTC crypto trading have access to deep liquidity pools, which can accommodate even the largest trades. This means that buyers and sellers can execute trades at the best possible price without worrying about price slippage or market volatility.

Additionally, banks that offer OTC crypto trading provide a range of other services, including dedicated account managers who can help investors with every step of the trading process, from opening an account to executing a trade. This provides investors with greater support and guidance, which can be especially beneficial when trading large volumes of cryptocurrency.

What are the Benefits of OTC Crypto Trading with a Bank?

There are several benefits of OTC crypto trading with a bank, including:

  1. Better Liquidity: One of the biggest advantages of OTC trading with a bank is better liquidity. Cryptocurrency exchanges often have limited liquidity, which can lead to price slippage and higher trading costs. In contrast, banks that offer OTC crypto trading have access to deep pools of liquidity, which can ensure that large trades are executed at the best possible price.
  2. Fixed Price: Market volatility is a common risk in the cryptocurrency market. Cryptocurrency exchanges are susceptible to rapid price fluctuations, which can make executing large trades at a fixed price difficult. In contrast, OTC trading with a bank provides a fixed price, which eliminates the risk of price slippage and ensures that the trade is executed at the agreed-upon price.
  3. Better Security: Security is a significant concern in the cryptocurrency market. Cryptocurrency exchanges are vulnerable to cyber-attacks and hacks, which can lead to the loss of funds. In contrast, banks that offer OTC crypto trading have robust security measures in place, including multi-factor authentication, cold storage, and insurance, which protect investors’ funds from theft and cyber attacks.
  4. Regulatory Oversight: Regulatory oversight is another significant advantage of OTC crypto trading with a bank. Cryptocurrency exchanges operate with no regulatory oversight, which can lead to fraudulent activity and scams. Banks that offer OTC crypto trading, however, are regulated by financial authorities and must adhere to strict compliance standards. This provides greater protection for investors and ensures that the trading process is transparent and fair.
  5. Faster Settlement: Settlement times are a critical factor in cryptocurrency trades. Cryptocurrency exchanges can suffer from slow settlement times due to the high volume of trades and the need for confirmations on the blockchain. In contrast, banks that offer OTC crypto trading can settle trades much faster, often within a few hours or less. This means that investors can access their funds more quickly and make more timely investment decisions.

Who Can Benefit from OTC Crypto Trading with a Bank?

OTC crypto trading with a bank is ideal for investors who are looking to trade large volumes of cryptocurrency. This includes high-net-worth individuals, institutional investors, and cryptocurrency mining companies. OTC trading with a bank is also beneficial for those who value security, regulatory oversight, and personalized support.

Additionally, OTC crypto trading with a bank can be a good option for investors who want to avoid the complexities and risks associated with cryptocurrency exchanges. Cryptocurrency exchanges can be difficult to navigate, especially for those who are new to the market. OTC trading with a bank provides a simpler and more straightforward trading process, with the added benefits of a bank’s resources and expertise.

Trade Crypto Safely with EQIBank

EQIBank is the world’s first licensed and regulated bank for national currencies and crypto. This means that the bank is held to the highest standards of compliance and regulation, which provides peace of mind to investors who can be assured that their assets are being managed by a reputable and trustworthy institution.

In addition, trading cryptocurrency through EQIBank means that you don’t have to worry about the risks associated with unregulated exchanges and trading platforms. These platforms are often targets for hackers and scammers, who can easily manipulate the market or steal your assets. When you trade crypto through EQIBank, you know that your assets are protected by strict security protocols and regulations.

Do you have questions? Contact us today. Ready to get started? Apply now.

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