What are the risks associated with OTC trading in the cryptocurrency industry?

1 answers

• Dec 15, 2021 · 3 years ago
  When it comes to OTC trading in the cryptocurrency industry, there are several risks that traders should be aware of. One of the main risks is the potential for scams and fraud. Since OTC trades are often conducted privately, it can be easier for scammers to operate and deceive unsuspecting traders. It's important to thoroughly research and verify the legitimacy of any OTC trading counterparties before engaging in transactions. Another risk is the lack of liquidity and price discovery. OTC trades are typically conducted off-exchange, which means that the liquidity and pricing may be limited compared to trading on centralized exchanges. This can result in wider spreads and less favorable pricing for traders. Additionally, OTC trades are not as transparent as trades on exchanges, which can make it difficult to assess the true market value of the cryptocurrency being traded. Traders should be cautious and ensure they are getting a fair deal when engaging in OTC trading.
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