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Bitcoin OTC Brokers: What Are They, How Do They Work, And Should You Use Them

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Looking at graphs on a computer monitor.

Learn everything you need to know about trading large amounts of bitcoin over-the-counter using a bitcoin OTC broker.

What is the OTC Market?

A large amount of bitcoin trading occurs on platforms like Binance or Coinbase where the exchanges act as the market makers. They match the buyers (who set the bids) and sellers (who set the asks) on the platform and take a fee for their services.

The OTC market connects buyers and sellers as well, but it does so via bitcoin broker. Bitcoin brokers essentially replace the exchanges as the “market makers”, acting as the new middleman between buyers and sellers.

The OTC market has a niche target that focuses on traders with significant sums of cash who prefer their orders to be filled by one party. The persons seeking a trade will quote prices to their broker, and it’s the job of the OTC broker to connect their client with another trader to complete the transaction.

Apple exchange vs over the counter.

Buyers and sellers communicate through their bitcoin brokers, which helps them remain anonymous throughout the transaction. The majority of OTC transactions involve large sums of money because OTC bitcoin brokers help wealthy traders avoid “slippage”.

Slippage occurs when a buyer places a large order on an exchange, which is then filled by multiple sell orders that can vary slightly in price. The result is an increase in total fees paid and a variance in the price paid for the asset. Direct transactions via OTC markets ensure a singular transaction at an agreed-upon price between the two parties.

What are Bitcoin OTC Brokers?

Gold coin with a bitcoin symbol.

The first thing to know about bitcoin brokers is that they are not financial advisors. Financial advisors form relationships with their clients and usually manage funds on the clients’ behalf. In contrast, OTC brokers typically trade per explicit request from clients and per limits/goals previously established.

The key advantage of trading with a Bitcoin broker is the elimination of any slippage. Bitcoin brokers charge a single fee for their service, but they eliminate excess fees charged by major exchanges when making significant digital asset investments.

OTC brokers develop networks of buyers and sellers to ensure each client’s needs are met. When searching for the right Bitcoin OTC Broker, it’s important to find a firm that has an established network. Doing so will improve the odds of finding the right buyer or seller for any type of trade.

In order to trade via an OTC Broker, investors will have to prove their source of funds and net worth to the firm. Therefore, brokers require clients to complete an identity verification process known as KYC (Know Your Customer), which helps prevent identity theft, money laundering, and other types of fraud.

Why Use a Bitcoin Broker?

OTC brokers are not for everyone. The average investor should find everything they need on popular exchanges like Binance or Coinbase, but for larger investors trading over-the-counter makes sense.

Below is a comprehensive list of pros and cons for those investors considering an OTC Bitcoin Broker.

Pros

Cons

  1. Improved Liquidity
    • Dedicated OTC traders handle large order blocks, thus increasing market liquidity
  2. No Limits
    • Exchanges typically limit daily purchases whereas OTC can reach millions of dollars
  3. Guaranteed Price
    • Lower risk of “slippage”
  4. Fiat Onramp
    • Bitcoin OTC Brokers allow most bank account transfers and sometimes even cash
  5. Anonymity
    • Exchanges post each transaction on the platform while OTC markets offer transaction privacy
  1. Limited Range of Assets
    • Options will be limited unlike exchanges that listed hundreds of altcoins
  2. Requires Significant Capital
    • OTC Bitcoin Brokers normally allow accredited investors or those with proof of capital to utilize their services
  3. Few Trusted Brokers
    • The most difficult part of the OTC purchase process is finding a broker you trust
  4. Manual Trading
    • Exchanges consist of automated trading whereas OTC brokers require ‘manual’ trades over the phone or other online chats

Best Bitcoin Brokers

Bitcoin Market Journal has researched and analyzed the top bitcoin OTC brokers to help investors identify the firm that is right for them. If you decide that it’s time to make a substantial investment in digital assets, review our list first to learn everything you need to know about what to look for when choosing the right bitcoin broker for you.

Name Description Incorporation Year Fees Auxiliary Services Twitter Followers Regulated Score
Circle Trade Boston-based Circle is one of the market leaders in the over-the-counter trade of digital assets. Aside from its OTC brokerage services, the company also offers retail investor solutions through its Circle Invest business and a payments service through its Circle Pay business. 2013 Brokerage Fee Included in Agreed Price Advisory, Research, Retail Investor Offering, Payments 46,700 Yes 4.5
ItBit New York-based itBit is a digital currency exchange that launched in 2013. The exchange also offers OTC bitcoin trading service targeted at high net worth individuals and businesses that want to transact in a minimum of 100 bitcoin. itBit charges a 0.1 percent flat fee on each OTC trade and offers same day settlement to its customers. itBit’s OTC trading desk has clients in over 100 countries, and the company is a regulated bitcoin exchange in the State of New York. 2012 0.1 percent per transaction. No crypto withdrawal fees. Full-Service Digital Asset Exchange, All USD Funds Held Are Insured 7,825 Yes 4.5
Genesis Trading New York-based Genesis Global Trading provides two-sided liquidity for digital currencies on a daily basis. The company was formerly SecondMarket’s Trading Division and is owned by leading bitcoin venture capital firm Digital Currency Group. Genesis has been offering its bitcoin brokerage services since 2013, which makes it one of the longest-standing OTC bitcoin brokers in the market. Due to its ownership by the DCG, it is also considered one of the most reputable. 2013 Spread Above XBX Bitcoin Index Out of Hours Trading, Access to Grayscale Investment Trusts, Digital Asset Lending 6,425 Yes 4.5
Cumberland Mining Cumberland Mining, a DRW Holdings LLC subsidiary, is another US-based bitcoin broker that transacts in institutional-sized trades. The Chicago-based company provides two-way liquidity in bitcoin and other digital currencies for high net worth individuals and enterprises. 1992 Brokerage Fee Included in Agreed Price Advisory 6,112 Yes 4
Jump Trading Chicago-based Jump Trading is one of the newer entrants in the growing Bitcoin OTC brokerage market. The brokerage firm has developed a dashboard for its users that enables investors to traders to interact with Jump Trading’s OTC Desk using a secured connection, which alleviates the reliance on third-party messaging platforms. Its OTC brokerage business executes over $2 billion worth of digital assets each month. 1999 Brokerage Fee Included in Agreed Price Advisory 568 Yes 3.5
Kraken OTC San Francisco-based digital asset exchange Kraken launched an OTC trading service in 2018 to enable its professional customers to engage in off-exchange transactions. Additionally, the exchange’s OTC trading service includes market analysis, 1-to-1 service, full asset support, and 24/7 global coverage. Minimum transaction size is $100,000. 2011 Brokerage Fee Included in Agreed Price Full-Service Digital Asset Exchange, Market Analysis, 24/7 global coverage 376,000 No 3.5
B2C2 London-based B2C2 has been trading since 2015, providing liquidity for large transactions to both individuals and institutions. The minimal settlement amount is $50,000. Clients are able to take advantage of post-trade settlement, allowing them to initiate a trade without depositing any cash. Clients are able to trade gold for bitcoin as well, with a minimum trade size of one ounce. 2015 Brokerage Fee Included in Agreed Price Advisory 906 Yes 3.5
XBTO New York-based XBTO has been providing OTC liquidity since it was founded in 2015. It conducted the first-ever block trade of Bakkt bitcoin futures contracts. XBTO is also involved in crypto mining, using renewable energy to power its operation. In addition to OTC trading, XBTO also provides clearinghouse services via Stablehouse.io for stablecoins. 2015 Brokerage Fee Included in Agreed Price Asset Management, Venture Capital, Crypto-Mining, Consulting Services 495 Yes 3.5
BitStocks London-based Bitstocks was launched in 2016 to provide bitcoin liquidity to high net worth individuals as well as institutional investors. The company requires you to make a minimum deposit of £5,000 ($6,500) and offers both an OTC brokerage services and an advisory service. For OTC trades, the company’s commission is built into the execution price, similarly to the way Genesis Global Trading handles it. If you want to also benefit from the brokerage’s advisory services, however, you will have to pay a 25 percent performance fee on the profit you make on your trades. 2014 Brokerage Fee Included in Agreed Price, 25% of Profit on “Advisory” Trades Advisory & Research 1,867 No 3
Octagon Strategy Hong Kong-based Octagon Strategy is an OTC broker, run by former Head of Electronic Trading at Morgan Stanley and Macquaire, Wayne Trench, that claims to be Asia’s largest digital asset broker. Minimum trade size is $100,000, and there is no maximum. 2016 “Small” transaction fee upon execution RFQ/API, Market Making, Bespoke Services 1,145 No 2.5

Should You Buy Bitcoin Using an OTC Broker?

Investors who want to reap the benefits of OTC bitcoin brokers should first check the balance in their bank accounts before picking up the phone. Brokers require a certain level of cash or volume to justify the investment. Single exchanges, no matter the size, lack the liquidity necessary to fill massive order blocks.

Exchanges fulfill the needs of the typical investor in the vast majority of cases. They offer hundreds of altcoins with different asset pairings, margin trading, automated investing, stop/limit market orders, and, most importantly, investors can purchase fractional shares of coins.

Answering one simple question will, in most cases, reveal whether or not an investor should pursue OTC Bitcoin Brokerage trades: Does your total purchase amount exceed the limits of traditional digital asset exchanges? If so, then you are better off trading with an OTC broker.

Related Articles

Subscribe to Bitcoin Market Journal to stay up-to-date with the latest developments in the digital asset markets.

Source: https://www.bitcoinmarketjournal.com/bitcoin-otc-brokers/

Blockchain

Why investors are now enthusiastic about “blockchain games”

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Cryptocurrency that has already caused multiple bubbles this year. But what investors are looking at right now is something that’s already ahead – blockchain games.
We will explore the background of investors’ attention to blockchain games while explaining how blockchain affects the game industry and the relationship between blockchain games and cryptocurrencies.

1. Why are investors now focusing on blockchain games?

Development of the game industry with the latest
AI (artificial intelligence), VR (virtual reality), and he is AR (augmented reality), which are becoming more and more familiar with the development of technology. One of the industries in which these latest technologies have a great influence is the game industry. The feeling of entering the game world attracts many gamers.
Currently, the main experience is at game centers and events, but in the future it will not be long before there is one VR per family.Fusion of virtual currency and games
Entering the game industry with cryptocurrencies is an indispensable topic in explaining the relationship between games and blockchain. The number of games that allow you to buy and sell items using virtual currency is increasing.
for example CryptoKitties(暗号仔猫)

Is a pioneer of games that can be traded with virtual currencies, but since its introduction in 2017, huge amounts of virtual currencies have been traded. CryptoKittes is built like a blockchain of Ethereum (ETH), which is a kind of virtual currency, and it is a mechanism that you can buy and sell kittens using Ethereum.
Especially after the word NFT (Non-Fungible Token)  became familiar, the merits of owning NFT were easily understood by people, and NFT was traded at a value of millions to tens of millions of yen.

Why blockchain contributes to the gaming industry
Blockchain plays a very important role in games that will be further developed by the latest technology and will also be a virtual currency exchange.
In a nutshell, blockchain makes in-game cryptocurrency transactions more secure.
In the first place, blockchain is called “distributed ledger technology”, and it is a technology that allows users to manage and share the same ledger on the network. The transaction data history of virtual currency is called “transaction”, and the one that stores a certain number of transactions together is called “block”. When a new block is created, it becomes a “blockchain” by connecting with past blocks like a chain.
Generating blocks requires a huge amount of computer-based calculations. In addition, since the data is distributed to many computers all over the world, even if some of the data in the chain is tampered with, the entire data will not be affected, and the risk of service outage will be infinitely zero. close.
It is a fact that it seems natural when understanding the mechanism of blockchain that blockchain has a great influence on secure cryptocurrency transactions in games. By making safe transactions, the number of users of online games will increase quadratically.

Blockchain entry into online casinos
Traditional online games aren’t the only ones that have made remarkable progress with blockchain. “Online casinos”, where you can enjoy casinos on your computer, are also one of the industries that are benefiting from blockchain.
Online casinos, like traditional casinos, generate monetary transactions and handle personal information. By introducing blockchain there, users will be able to trade with peace of mind. Concerns about “the management side may be illegally controlling data and losing money” that comes to mind when trading money online are dispelled.

As with games, the number of casinos that can be traded using virtual currency is increasing,   An online casino where you can play for less than $ 1 

2. The future of blockchain games that investors are paying attention to

Games using blockchain are evolving day by day. For example, Epic Digital Collectibles is a game where you can enjoy card games online, and you fight with cards collected using virtual currency. Considering that the cards that have been collected in kind (Yu-Gi-Oh! Cards, Pokemon cards, etc.) have been given huge values ​​depending on their rarity, the transaction amount of cards traded online will be ridiculous. right. Also, it’s easy to imagine that online casinos will become exactly “Las Vegas, which can be accessed online at any time” -a platform for huge transactions.

Online games and casinos can now be used more safely using blockchain. Blockchain games, which have the inevitable potential to turn into a huge market, will undoubtedly continue to attract the attention of investors.

Source: Plato Data Intelligence

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Blockchain

United States Infrastructure Bill Brings Cardano Billionaire to Washington.

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Cardano Founder, Charles Hoskinson to Speak at GBA Blockchain & Infrastructure.

 

Charles Hoskinson, Founder of Cardano and Co-Founder of Ethereum, 

Educates Government Legislators, Regulators, & Administrators

 

The recent debate over the Infrastructure Bill has made two things clear: 

The government will be regulating blockchain activities, but they don’t understand it well enough to do an effective job. For that reason, the Government Blockchain Association (GBA) and our partners are organizing Blockchain & Infrastructure, a two-day educational seminar for government leaders and their staff. The educational content will be delivered to public sector organizations exploring blockchain and cryptocurrency.

 

Mr. Charles Hoskinson of Cardano will be speaking live from Washington, DC, and will also be broadcast to virtual attendees in the Americas, Europe, Asia, Africa, and Australia. This 2-day hybrid experience will be a crash course in blockchain and cryptocurrency training, followed by an evening reception for networking and meeting the speakers, including Charles Hoskinson, Scott Stornetta, and other blockchain pioneers. Live and virtual attendees will also be able to engage with Mr. Hoskinson and other participants through a conference app provided by Qbix.

 

In 2013, Mr. Hoskinson was one of the original founders of Ethereum. A few years later, he spearheaded IOHK (Input Output Hong Kong), whose key project is Cardano. Cardano’s market cap is currently over $69 Billion. IOHK sponsors blockchain technology research labs at the University of Edinburgh and the Tokyo Institute of Technology and is collaborating on a blockchain research project with the University of Wyoming. Mr. Hoskinson will be speaking at Blockchain & Infrastructure and will be networking with conference attendees during the evening reception on September 28 in Washington DC.

 

Source: PlatoData Intelligence

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Blockchain

Robinhood Silently to Test Crypto Wallets & Crypto Transfer Functions

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According to a Bloomberg report, Zero-commission financial trading platform Robinhood is low-profile testing new crypto wallet features for its customers, which will allow users to send and receive cryptocurrencies.

Webp.net-resizeimage (17).jpg

Reportedly, Robinhood users currently can only use U.S. dollars to buy cryptocurrencies and trade digital assets on the platform but cannot withdraw the encrypted assets.

This is the first time the company has introduced deposit and withdrawal functions for digital assets like Bitcoin (BTC). 

Bloomberg reported that the beta version of the application on its IOS system reflects the company’s work on such functions. Also, there is a hidden image showing the waiting list page for users to register for the function of the encrypted wallet. It also involves the code related to the transfer of cryptocurrency assets.

Robinhood CEO Vlad Tenev pointed out in the second-quarter earnings conference call that adding a crypto wallet is the top priority of the company’s developers and said:

“It’s something that our teams are working on. The ability to deposit and withdraw cryptocurrencies is tricky to do with scale, and we want to make sure it’s done correctly and properly.”

As reported by Blockchain.News on September 9, Robinhood Markets Inc. has launched a new cryptocurrency recurring investment feature that lets customers automatically invest in cryptocurrencies on a daily, weekly, or monthly schedule.

The new feature is set to allow its customers to purchase cryptocurrency commission-free and with a little as $1 worth of cryptocurrency of their choice monthly, weekly or even daily.

Image source: Shutterstock
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Source: https://Blockchain.News/news/robinhood-silently-to-test-crypto-wallets-crypto-transfer-functions

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Blockchain

Reasons behind Monday’s Crypto Market Sell-off Panic: Evergrande Group shaky Bankruptcy Threat Ahead

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The fall down of the Chinese real estate giant Evergrande Group swept the entire cryptocurrency market. Evergrande’s financial crisis caused investors to worry about China’s catastrophic debt default, which caused panic selling in the market.

Webp.net-resizeimage (9).jpg

Bitcoin and Ethereum are the first to bear the brunt, and the entire cryptocurrency market value has evaporated by $250 billion.

According to Coinmarketcap, starting from Monday morning, the value of global cryptocurrencies plummeted to a low of about 1.8 trillion U.S. dollars, which occurred at approximately 8 o’clock UTC time, a decrease of nearly 11% from the previous 24 hours. The market value has evaporated by more than $250 billion.

At the time of writing, the current market value has rebounded, around $1.9 trillion.

Bitcoin price fell by 9% today to less than $42,669, which is the lowest level in more than a month, while the price of Ether fell nearly 10% to a low of $2,940, the lowest since early August level.

Bitcoin was trading at $42,863.02, and the price of Ether returned to the support level of $3,000, trading around $3,034.31 at the press time.

The remaining cryptocurrencies, such as Solana’s sol and Cardano’s ADA, which have skyrocketed recently, also fell by about 10% at the peak of the sell-off.

The reason for this plunge is not just because the Chinese real estate giant Evergrande Group is carrying a massive debt of $305 billion and is unable to repay the debt due this month, but also faces the risk of bankruptcy which poses a threat to the broader market.

And there is also the panic selling caused by the increasingly stringent national regulatory review of cryptocurrencies.

Recently, according to a Bloomberg report, the derivatives regulator is notably investigating the leading cryptocurrency exchange Binance for possible insider trading and market manipulation.

Also, as reported by Blockchain.News on September 13, The South Korean Financial Services Commission (FSC) has begun to tighten the supervision of local and overseas cryptocurrency trading platforms. This regulation may terminate nearly two-thirds of unapproved South Korea’s cryptocurrency exchanges for legal transactions.

Image source: Shutterstock
PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://Blockchain.News/analysis/reasons-behind-monday-crypto-market-sell-off-panic-evergrande-group-shaky-bankruptcy-threat-ahead

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