Trust in cryptocurrency trading platforms is being eroded by media culture and friends who have been duped.
Public exchanges often struggle with high-volume cryptocurrency transactions, as they can lead to slippage, delays, and privacy issues. OTC currency trading (over-the-counter) enables direct negotiations between parties, but it involves more complexity than simple asset exchange. We at Peiko have contributed to the development of strong blockchain solutions, and today we’re delving into how they enable companies to trade more quickly and intelligently.
What is an OTC сrypto exchange?
For rookies, the disparity in crypto trading is almost nonexistent. Let’s take something simple, like going grocery shopping or purchasing items in a physical store. There are predetermined prices, a register, and trading directly with the cashier may appear peculiar. After all, he is not liable for the price tag. On the other hand, at the street market or in retail trade, there is an opportunity to reduce costs. The interaction takes place directly with the party that sells the goods.
The first can be compared to exchanges like Binance, OKX, and CoinMarket. The second is similar to the OTC crypto exchange that is available on Forex. However, the distinction does not end there, as we will uncover later.
Over-the-counter cryptocurrency trading (OTC crypto) enables large transactions to be executed directly between buyers and sellers, bypassing exchanges. This helps to prevent affecting market pricing and maintains secrecy. OTC desks of digital asset exchanges or specialist brokers for over-the-counter trading have specific terms and settlement mechanisms, such as fiat currencies and stablecoins.
Core function and assets
In the cryptocurrency industry, an OTC trading platform facilitates users to engage directly without having to place orders on an open exchange. This allows businesses more choice in terms of rate, transaction time, and payment methods, while additionally lowering the risk of affecting the market with a huge transaction.
This is particularly pertinent for large players: if you place an order on the open market, the price can rise or fall dramatically depending on the volume.
Most exchanges trade well-known and widely accepted assets, such as shares of large companies, conventional options, and futures. The OTC in crypto market affords a broader selection, which is listed below:
- Private Equity Market. Trading of shares of companies not listed on public markets. Investors can purchase shares in startups or private enterprises, primarily to make long-term investments.
- Bonds. Most headquarters, municipal, and government bonds are traded over the counter. These markets allow investors to buy and sell corporate and government debt.
- Forex. This is an over-the-counter market where currencies can be traded 24 hours a day.
- OTC Crypto. The OTC cryptocurrency exchange enables users to conduct massive deals in tokens such as Bitcoin, Ethereum, and other altcoins outside regular exchanges.
Public exchanges and OTC trading
Financial organizations enforce rigorous regulations on exchange trading. In contrast, OTC marketplaces have a lower level of oversight. When we talk about enormous volumes, the question of privacy becomes very apparent. Cryptocurrency OTC is purchased or sold outside a public exchange, where competitors or speculators can monitor all transactions.
OTC transactions allow parties to agree on a convenient exchange rate. The classic mode of the exchange focuses on the current OTC crypto quotations or the order book, which is occasionally beneficial for large transactions. To prevent fraud, reputable OTC suppliers offer escrow methods and counterparty verification.
Over-the-counter crypto trading and NFT development
If you believe that cryptocurrency topics mostly include BTC and ETH, you are mistaken. The famous Magic: The Gathering Arena includes a built-in coin that can be traded across platforms. NFT gaming is furious, and you should hear about it. But wouldn’t it be more profitable to establish your own platform for the best OTC crypto exchange?
In some cases, OTC mechanisms are integrated into other platforms — for example, NFT marketplaces. Here, users need to understand how to create a platform that supports over-the-counter transactions: how to set up direct trades, enable communication between participants, and ensure smooth crypto transfers to accounts.
But what if such a solution already exists and is gaining traction? Think of platforms that successfully combined entertainment and blockchain — like gaming projects tied to collectibles. This reminds us of how Nintendo Switch became a cultural phenomenon with games like Mario Kart, The Legend of Zelda, and Pokémon. Blockchain platforms aim for the same level of mass adoption by merging familiar experiences with Web3 functionality.
Peiko invented Swych, an innovation that offers brokers detailed information on trading and balance. Swych supplies a visually appealing interface that combines PancakeSwap and bespoke designs. However, the project’s scope extends beyond that. Swych further provides an exclusive gaming experience to consumers.
Large trading experience with OTC crypto trading
In 2024, the cryptocurrency market reached a new all-time high with a capitalization of $3.71 trillion. Against this backdrop, institutional players such as hedge funds actively turned to crypto derivatives — including ETH-based ETFs. Firms like Goldman Sachs and Galaxy Digital highlighted these options as effective tools for gaining exposure to digital assets without directly holding them, or for hedging existing positions.
Unlike other Bitcoin exchange-traded instruments actually on the market, Goldman Sachs’ latest BTC option shifts almost all the transaction risk to the bank.
OTC or exchange-traded trading is at loggerheads. This is due to the diversity of opportunities and the historical basis of society. According to Binance, the OTC crypto industry is forecast to grow at an astonishing 106% every year through 2024.
Institutional demand, positive political reforms, and macroeconomic events were the primary drivers of this expansion. In Q4 2024, OTC trading volumes surged by 177% year-on-year, indicating rising market activity and the industry’s maturation.
Wintermute, a crypto market maker, told the Block publisher that its over-the-counter trade volumes will treble in 2024, owing primarily to a surge in institutional demand for cryptocurrency. The single-day high for OTC trade crypto volume in 2024 was approximately $2.24 billion. This was an enormous jump over the $2 billion record established over a full week in 2023.
Who benefits most from OTC crypto exchanges?
Profit is always addressed first, followed by security. Miners make more than others in exchange trading, despite legal restrictions on their actions. What about cryptocurrency OTC trading? The following table summarizes how various market participants benefit from OTC trading.
| Legal entity | Value |
| Institutional investors | Minimal slippage and good liquidity for large trades. |
| High-Net-Worth individuals (HNWIs) | Confidentiality and personalized service, including individual prices and fast calculations. |
| Miners | Fast cryptocurrency implementation with minimal impact on price, allowing for convergence of operating costs without market collapse. |
| Project teams/foundations | Controlled management of treasury token reserves allows for the avoidance of sharp fluctuations in the token price when selling large volumes. |
High-Net-Worth Individuals (HNWIs) are individuals who have a substantial amount of money, typically exceeding $1 million in liquid assets (excluding their primary residence). These assets could consist of equities, bonds, mutual funds, and other investments that can be quickly converted into cash. HNWIs often seek wealth management, tax planning, and investment guidance to protect and enhance their assets.
OTC crypto exchange: The way to choose a platform correctly
The Internet hosts millions of trading platforms. Starting from the first pages of Google and finishing with referrals from friends to channels with auto-bots on social networks, OTC crypto meaning allows for a more specific interface and functionality.
There is nothing better than having everything plain and uncomplicated for both the broker and the buyer at the quantum level. The Peiko team developed Quan2um with this notion in mind. This platform launched its own cryptocurrency, BTCA, which required promotion and assistance. The program’s core concept is that existing customers receive bonuses for referring others. Finally, search robots indexed the site.
Fees and pricing models
Unlike exchange trading, transactions in OTC crypto trading occur directly between buyers and sellers. It is similar to a meeting at work or a simple video conference with a customer or supervisor. OTC platforms can support other cryptocurrencies; however, Bitcoin is the most commonly offered.
- The starting price starts from 10-30 BTC.
- The limit starts from $100k (such transactions are considered individually in the presence of the counterparty).
- The tax on the transaction depends on the regional location and is regulated by law (from 10%).
There are multiple opinions on how the cryptocurrency sector should be taxed. Many individuals favor the German tax approach, which offers a zero-tax rate for investors who hold cryptocurrencies for over a year. Some argue that regulation undermines the blockchain’s core value of decentralization.
Security measures
Security has long been a major concern for each OTC cryptocurrency broker. Forex, for example, operates through a decentralized network of banks, brokers, and traders, rather than a centralized exchange. This technology enables the control of data flows while ensuring stability and security.
Crypto OTC trade is fundamentally identical to exchange trading, hence the blockchain base remains unchanged. Blockchain platforms offer a variety of functions, including moving funds, making digital agreements, and designing apps that do not rely on a central authority or server.
Customer support and responsiveness
In OTC crypto trading, verification of the contact between the broker and the buyer is more stringent than on retail exchanges and is commonly a bank check. They may require account activity, confirmation of the client’s absence from OFAC, the EU, the UN, or video verification.
At the same time, each application is assessed by the counterparty involved in the transaction. He is responsible for regulating legality and other legal factors, promoting forthrightness.
Geographic availability and regulatory compliance
In an array of jurisdictions for OTC cryptocurrency, digital assets have been recognized and legalized as objects of circulation and payments, confirming their constitutionality. Many states, in particular, have enacted legislation that qualifies digital currencies as lawful payment instruments.
However, certain countries on the world map forbid the use of cryptocurrency. These include China, Algeria, Egypt, Morocco, Tunisia, and Turkey.
KYC/AML procedures
Because one-on-one trading with huge quantities necessitates security measures, special AML (Anti-Money Laundering) and KYC (Know Your Customer) requirements have been devised. AML inhibits corruption and terrorist activities, while KYC serves as a verification tool for checking identities and transaction rules.
These processes are mandatory for OTC trading in the United States, Canada, Great Britain, Singapore, and Switzerland. This is entirely distinct from peer-to-peer or informal trade. Such rules promote openness and make it possible for the crypto OTC infrastructure to work with banks, funds, and regulators.
Standardized security frameworks don’t always cut it — especially when large transactions and regulatory oversight are involved.
When crypto OTC trading touches institutional players, tailored tools become essential. A custom-built solution helps align with compliance requirements, internal audits, and the specific technical constraints of your business.
The nearest trends of large-scale digital asset trading
Forecasting the growth of cryptocurrency OTC trading over the next five years. The geopolitical situation affects the market, leading to changes in rates, methods, and approaches to the sphere’s development. However, several factors can be identified as stable:
- institutional desks will be expanded with TradFi processes;
- AI bots and assistants will be the backbone of OTC platforms;
- CASP under MiCA with strict compliance;
- 68 countries will appear in CBDC programs;
- building a base for ZK-KYC through a blockchain compliance hierarchy;
- API-native, liquid automated launch in the OTC structure;
- enhancing security features (blocking and fragmentation) in OTC syndicates.
Wayne Trench, CEO of Octagon Strategy, Asia-Pacific the largest cryptocurrency brokerage, said in an interview with CoinFi: “If we can tokenize real estate, or if we can tokenize dept instruments, it might be muni bonds or whatnot, and provide the people with access to things that historically been for the select few who have had the ability to be involved in that sort of stuff.”
Astonishing blockchain software with Peiko perks
OTC trading, like direct peer-to-peer exchanges, offers a level of flexibility and trust that institutional traders value when handling large-volume transactions. When it comes to large-scale OTC in crypto trading, transparency, security, and cluster archiving are top priorities. Peiko delivers custom blockchain platforms built for high-volume trading, compliance, and growth. Let’s talk about your goals. We’ll help you get there faster, safer, and smarter. Contact us to see for yourself!
