What is OTC Trading?
OTC (over-the-counter) trading is buying or selling assets directly between two parties, usually through a dealer or desk, instead of on a public exchange order book. It is commonly used for large crypto trades.
Also known as: over-the-counter trading · OTC desk · off-exchange trading
In plain terms
On an exchange, your order is matched against everyone else's in a public order book, and a big order can push the price against you. On an OTC desk, you ask for a price for the full amount, agree on it privately, and the trade settles bilaterally.
How it works
The client contacts a desk and requests a quote for a specific asset and size, a process known as RFQ (request for quote). The desk responds with a firm price, valid for a short window, that already accounts for the liquidity it needs to source.
If the client accepts, both sides settle: one sends the fiat or stablecoin, the other delivers the asset, under agreed settlement terms. Before any of this, institutional desks onboard clients with KYC and AML checks.
Because the price is fixed before execution, the client knows the all-in cost upfront instead of discovering it through slippage across an order book.
Example
Hypothetical: a fund wants to convert $3,000,000 of a stablecoin into bitcoin. Placing that as a single market order on an exchange could move through several price levels. Instead, the fund requests a quote from an OTC desk, accepts a firm price for the full amount, and both legs settle the same day.
Why it matters for founders and investors
For treasuries, funds and token projects moving significant size, OTC trading offers price certainty, discretion and access to deeper liquidity than a single exchange shows. It also reduces the market signal that a large public order would send.
Common misconceptions
OTC does not mean unregulated or informal. Professional desks operate under counterparty onboarding, compliance checks and documented settlement procedures; the difference is the trading venue, not the absence of rules.
Frequently asked questions
Why do large crypto traders use OTC desks?
Large traders use OTC desks to get a single firm price for the full size of a trade without moving the public market. It also keeps the trade out of the visible order book.
Is OTC trading more expensive than an exchange?
OTC pricing includes the desk's spread, but for large trades it is often cheaper overall than the slippage an exchange order would suffer. For small trades an exchange is usually more economical.