OTC trading

Over-the-counter trading means a buyer and a seller agree a deal privately, usually through a broker or an OTC desk, instead of placing orders on an exchange's public order book. The desk quotes a single price for the full amount, and the trade is settled directly between the parties or through the desk.

Funds, miners, companies building bitcoin treasuries and wealthy individuals use OTC desks because executing a large order on an exchange would move the price and cause heavy slippage. Since these deals do not appear on order books, on-chain analysts often watch transfers to wallets linked to OTC desks for clues about what large holders are doing.

OTC trades offer price certainty and discretion, but they add counterparty and settlement risk if one side fails to deliver. Private deals with unknown parties carry a high risk of fraud, and regulated desks require full identity checks. Fees are often built into the quoted price rather than shown separately.