While trading on cryptocurrency exchanges is great for the average crypto trader, it’s not always a viable option when looking to trade large amounts. While you might hear about people making big money on bitcoin or Ethereum, the truth is that compared to normal forex markets, the volume being traded is still very little.
This is especially true in Australia. As a result, even trying to buy around AU$50,000 at once can result in the market price moving, and the buyer paying more for coins as the order moves down the book.
Exchanges also aren’t geared up to facilitate such big trades, and as a result can be quite restrictive to large customers. For instance, some exchanges cap their maximum daily trade limit to $10,000 or $50,000 per day.
Some of these restrictions that impact the amount that can be bought, sold or withdrawn include:
- Transaction methods
- Verification levels
- How long a customer has been trading on the platform
- The exclusivity of the platform
Because of these limitations, those looking to purchase a high volume of cryptocurrency would need to make several smaller transactions over a period of time until they’ve purchased the amount they want.
Over-the-counter (OTC) trading platforms such as HiveEx.com are able to solve this issue, by accessing funds through liquidity providers who individually hold large amounts of cryptocurrency and process large transactions outside of exchanges.
OTCs provide customers with a quote for one upfront fixed price for the entire amount that you would like to buy or sell, avoiding the price slippage you would face on an exchange.
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It’s also done in one transaction as opposed to multiple smaller transactions.
This report outlines the growth of the cryptocurrency market and the need for OTC services to bridge the gap for the ever-growing demand of high volume trades. The issues this market faces are increasing and the impact is greater, as more people all over the world jump on the cryptocurrency wagon.
But opportunities to improve the way we do banking is the most exciting part of this new era of fintech, and it has only just begun.