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What is OTC and is it true that all the major transactions are concluded there?

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The abbreviation OTC (over the counter) can be simply explained – it is a transaction with any financial instrument made by a seller and a buyer outside the market, that is, directly. Why is it necessary if exchanges and stock brokers make trading more civilized and safer? With regard to the cryptocurrency market, the answer to this question is liquidity, or rather its absence.

The main problem with cryptocurrency exchanges is that they can support transactions worth hundreds of millions of dollars a day. But if we talk about the same bitcoin, the real volume of transactions on it can amount to billions of dollars. None of the existing crypto exchanges is able to "digest" such a volume of supply, and any billion-dollar transaction is guaranteed to bring down the market. This reason alone is why the really big players make their trades on the OTC market.

Analysts from the TABB Group posted a fairly detailed report in the public domain, which shows that the daily volume of bitcoin trading on the OTC exceeds the volume of public trading by 2.5 – 3 times and reaches 11 – 12 billion dollars.

After reading this phrase, a reasonable question arises: if this is the case, then why are major traders' deals not visible in the blockchain? In fact, there is nothing strange in this, since not all operations are reflected in the public blockchain. There are many accounts in the world that do not show their orders to anyone, the only indicator they have is a change in the balance.

The conclusions of TABB Group, most likely, are quite close to the truth since large OTC transactions allow us to give a logical explanation for even the most "strange" jumps in quotations of the largest cryptocurrencies, which today may well be 5-10 percent per day. Another thing is that this state of affairs does not add positive emotions to ordinary investors: the realization that the share of exchange trading of the same bitcoin does not exceed 25 percent of its total volume makes any forecasts about the movement of its price based on exchange indicators untenable.

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LH-CRYPTO is an online service for crypto-traders. The service is available to everyone, except for the citizens of particular countries and several categories of people listed in the License Agreement. LH-CRYPTO is a free software for making conversion operations with CFDs on various financial assets nominated in cryptocurrencies.

The project does not manage funds and does not guarantee profits. The project only offers a service that allows to make conversion operations with cryptocurrencies on a specially configured software.

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All the settlements in this project are processed solely in cryptocurrencies. Conversion operations are processed on the terms of margin trading without a direct supply of underlying assets. According to the generally accepted term, these operations are called operations with OTC (over the counter) CFDs (contracts for difference).

Trading with OTC CFDs involves considerable risks. We recommend you pay the utmost attention to both theory and practice of margin trading before making any of such operations.

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