OTC Crypto Exchanges
One of the main questions that you may ask is, “How much money do OTC crypto exchanges make?” There are many factors to consider. The OTC market is much larger than the exchange market, so how much money do these exchanges make? In the last few years, the number of OTC crypto exchanges has increased dramatically. During this time, there have been more than one billion transactions. Of course, this number is highly volatile.
Another advantage to trading OTC is that there is no need to have prior liquidity, since you do not need to make any investments before submitting your order. Once you submit your order, it will be processed. Since OTC exchanges are not connected to a central exchange, there is no need to invest any money in advance. Buying and selling cryptocurrencies on an OTC exchange does not require prior investment, which is another huge benefit.
Currently, OTC exchanges make their money through the spread. A popular exchange might charge 0.25% of a transaction. But many OTC exchanges charge much more than that. The typical margin on a transaction may be two to three percent. It was normal for 2%-3% margins in 2017.
Decentralized OTC crypto exchange
In terms of volume, some OTC desks allow transactions worth 20 BTC, which is about $220,000 as of September 2020. Other desks will require more, like $250,000, but still only allow a few hundred dollars. You can find reputable OTC exchanges through recommendations from friends or family. Make sure to check out the company’s website and credentials. Once you have found a trusted OTC exchange, you can begin trading crypto.
How Much Money Do OTC Crypto Exchanges Make?
In the world of cryptocurrency, the OTC market is extremely important to the crypto ecosystem. Though some people have heard about Binance CEO Arthur Hayes, OTC exchanges are not as well known. In fact, the general crypto user community tends to pay attention to the CEO of a top exchange, but they often overlook the OTC market. The fact that OTC exchanges make so much money does not mean that they aren’t important.
OTC traders follow the “buy low and sell high” adage. They buy from customers at lower prices and sell at higher prices. These strategies place customers in an advantageous position, but it also puts them at odds with the trader. That’s why OTC exchanges are considered zero-sum games, and the more they make, the less the customers make. The only difference is the profit margin.
Some of the largest OTC exchanges are headquartered in San Francisco and are regulated by the SEC and FINRA. Coinbase was founded in 2011 and has a dedicated subsidiary that provides institutional clients with access to advanced institutional trading capabilities, margin finance, and execution algorithms. It has helped corporations like Tesla and MicroStrategy buy $1.5 billion worth of Bitcoin. But how much money do OTC crypto exchanges make?