How To Make Money With DeFi OTC

There has been a recent surge in products as well as platforms providing DeFi services. Decentralized Finance, commonly referred to as DeFi, denotes any kind of financial service that is offered on a blockchain, usually Ethereum smart contracts. An example of DeFi services and solutions is Over-the-Counter (OTC) cryptocurrency, which in the past three years has witnessed enormous growth marked by a substantial increase in volume and clients across the globe. A recent report by Bloomberg established that OTC turnover in 2018 amounted to more than 5.47 trillion USD equivalent.

What is OTC Trading?

OTC trading is a form of crypto trading where the actual trade occurs “Over-the-counter” instead of a regular cryptocurrency exchange such as Binance and Bitfinex. OTC trading is usually done by large-scale cryptocurrency traders and is often placed by hedge funds, private wealth managers, or individuals with a high crypto net worth.

In the crypto space, OTC trading occurs in different ways, such as:

  • OTC brokers- There are OTC trade brokers who specialize in handling large transactions. Usually, they are in the form of platforms where traders sign up to get access to services that will enable them to execute large trade blocks, access funds through liquidity providers to avert problems with slippage. Notable OTC brokers include itBit and hiveex.
  • Cryptocurrency ATMs- Crypto ATMs, usually Bitcoin ATMs, assist traders in converting their fiat currency into digital coins without needing to go through an online exchange.
  • Via chat rooms- Several chat rooms offer OTC trading. Bitcoin-otc is an IRC chatroom that accomplishes bitcoin trading. It is hosted on various IRC channels, which allows peer-to-peer transactions between traders.

How to Make Money Via OTC Trading

Before finding out how to make money with OTC trading, it’s essential to know how OTC transactions work. The first step in any OTC transaction is finding a counterparty for the trade. This is usually accomplished via a chatroom such as #bitcoin-otc or an OTC brokering platform.

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