How can OTC trading impact the price of digital assets?

3 answers

• Nov 27, 2021 · 3 years ago
  OTC trading, also known as over-the-counter trading, refers to the process of trading digital assets directly between two parties without the involvement of a centralized exchange. OTC trading can have a significant impact on the price of digital assets. When large institutional investors or high-net-worth individuals engage in OTC trading, they often trade large volumes of digital assets, which can cause price fluctuations. These large trades can affect the supply and demand dynamics of the market, leading to price movements. Additionally, OTC trading allows for more privacy and flexibility compared to trading on exchanges, which can attract different types of buyers and sellers and further influence the price of digital assets.
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• Nov 27, 2021 · 3 years ago
  OTC trading can impact the price of digital assets in several ways. Firstly, OTC trades are often conducted off-exchange, which means that they do not contribute to the trading volume and liquidity of the exchange. This lack of volume can create an illusion of lower demand for the digital asset, potentially leading to a decrease in its price. On the other hand, if a large OTC trade is executed at a higher price than the current market price, it can create a positive sentiment and attract more buyers, driving up the price. OTC trading can also be used for price manipulation purposes, as large trades can create artificial price movements that may not reflect the true market sentiment.
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• Nov 27, 2021 · 3 years ago
  From BYDFi's perspective, OTC trading can have a significant impact on the price of digital assets. As a third-party OTC trading platform, BYDFi facilitates large volume trades between institutional investors and high-net-worth individuals. These trades can influence the supply and demand dynamics of the market, leading to price fluctuations. Additionally, BYDFi's OTC trading services provide privacy and flexibility, attracting different types of buyers and sellers, which can further impact the price of digital assets. It is important for traders and investors to consider the impact of OTC trading when analyzing the price movements of digital assets.
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