Top OTC Crypto Exchange Features Every Platform Must Have

Crypto trading has become mainstream these days. There are so many crypto exchanges that help almost anybody buy, sell, or swap different crypto assets, regardless of their locations. 

For the average trader, this is a cool thing. However, for institutional traders and high networth individuals who’re involved with a large amount of crypto funds, it might not be smartest thing to just pop into the first exchange platform that comes up on search engine results pages. 

This is where OTC crypto exchange come into the picture. These highly specialized crypto trading platforms cater specifically to high volume trades. If you find yourself needing to trade high volumes of crypto assets, there are a couple of this to choose from. However, you need to be careful because you’re dealing with more funds and risk. 

Therefore, you must look out for some specific OTC crypto exchange features when choosing an OTC crypto exchange platform to execute your trades. Likewise, if you’re an entity that wants to cater to the trading needs of these institutional investors and high networth individuals, there are some features you must equip your platform with. 

In this article, we highlight 10 essential OTC crypto exchange features the best OTC trading platforms must have. We also a give some background information of what OTC crypto exchanges are and their most important benefits. 

What is an OTC Crypto Exchange Platform? 

An over-the-counter (OTC) crypto exchange platform is a special type of crypto exchange platform that specifically facilitates high-volume crypto trades directly between high-net-worth individuals, businesses, and institutional investors. This platform is a private setting and direct channel through which crypto buyers and sellers get to meet and negotiate the terms of a trade without involving the conventional exchange platforms. 

Instead of recording the details of the trade in a public order book that’s visible to third parties, an OTC crypto exchange platform allows buyers and sellers to negotiate the terms of the trade directly with each other through an intermediary or “OTC desk.”So, basically, high volume traders looking to execute high volume trades visit the OTC crypto exchange platform, and the OTC desk matches buyers and sellers whose trade requirements align together for private negotiations. 

By acting as a direct trading channel, an OTC crypto exchange provides customized trading services, ensuring better negotiations, greater liquidity, and access to a wider range of cryptocurrencies. In fact, they do more than that, and we’ll be examining more of their benefits in the next section. 

Benefits of OTC Trading 

Instead of just trading on a centralized crypto exchange like everybody else, it makes sense for businesses, institutional investors, and high-networth individuals to trade on an OTC crypto exchange for the following reasons: 

1. Privacy and Anonymity

If you’re trading an unusual amount of crypto assets, it makes sense for you to want to conceal some essential information like your identity and the volume of your trades from the entire public. For instance, it helps you avoid market impact and being a target for cyber threats and malicious actors. In addition to these, there are plenty other reasons why privacy and anonymity is vital. 

The key thing here is that OTC crypto exchanges provide just that! Firstly, the trade is conducted directly between the buyers and the sellers, so nobody else has to know unless the participants want that. Secondly, the trade details are not recorded on public order books, keeping them out of sight of third parties. 

2. Personalized Trading

You might also need tailored trade terms and conditions when executing these high-volume transactions. The most obvious case is price. From price and settlement dates to payment methods, these little details make significant impact when trading high volumes of crypto assets. 

An OTC crypto exchange platform allows the traders to customize all these to their taste. Consequently, traders can optimize their investment strategies, liquidity needs, and minimize the impact of the price fluctuations common on the wider crypto market. 

Additionally, personalized OTC desks also provide dedicated account managers that offer expert advice based on the trade’s peculiarities. All these features not only help the traders avoid unwanted outcomes but tailor the trade’s outcomes to their expectations. 

3. Increased Liquidity for Large Trades 

Most public exchanges are simply not capable of handling large orders. They often have order limits which restrict the maximum value for an individual trade. Furthermore, the fact that cryptocurrencies, by their own nature, can be influenced by the forces of demand and supply can cause extreme volatility, thus causing a wider market impact. 

Crypto OTC desks, on the other hand, offer liquidity by providing access to buy or sell large amounts of cryptocurrency without significantly impacting the price. They’re able to do this due to their vast network of liquidity providers such as financial institutions and large scale traders. 

4. Reduced Slippage

Reduced slippage is an extension of increased liquidity as a benefit of OTC crypto exchanges. The fact that traders are executing trades directly among themselves mean that they get to execute trades at prices closer to what they expect. And this is what slippage is all about — the difference between the final price at which a crypto trade is executed and the expected price. 

On public exchanges, large orders can significantly change the buy and sell orders at the desired price, forcing the trade to execute at less favorable prices. However, since OTC desks allow the traders to negotiate directly with each other, they can both agree on a certain price and be sure that the trade would execute at that price. This way there’s more predictability, and potentially, more profitable trading outcomes. 

5. Faster Settlement Times 

Another benefit of executing trades directly between buyers and sellers is that the trade execution is faster. The direct handling streamlines the settlement process, reducing the time it takes to finalize transactions. 

This is because both traders bypass exchange-like processes like multi-step verifications. And this can be very crucial for high-networth individuals and institutional investors who may need to move fast in some vital moments. OTC crypto exchange platforms help them secure their positions early and capitalize on time-sensitive opportunities. 

All these benefits make an OTC crypto exchange very appealing for most traders. But how are these unique exchanges able to deliver these awesome advantages. Find out in the next section as we discuss ten of the most essential OTC crypto exchange features. 

Top 10  Essential OTC Crypto Exchange Features

Whether you’re looking to trade high volumes of crypto assets or you’re a business looking to develop an OTC crypto exchange that facilitates high volume trades, the following are some essential OTC crypto exchange features you should prioritize. 

1. Robust Security Mechanisms

When it comes to high volume trades, you must know that we’ll be dealing with a large amount of sensitive data and information. We’re not just talking about the details of the trade here. It encompasses the identity of the traders and some essential privileged information that may be revealed during negotiations. The OTC crypto exchange platform can not afford to slip up because there’ll be constant cyber threats lurking around. 

It starts with efficient counterparty verification to confirm the identities of the “high-networth indviduals” because malicious actors can pose to be who they’re not. After ensuring the platform only onboards legitimate entities, you must now make sure that whatever sensitive information they provide on the platform is secure. Achieving this requires the use of advanced encryption protocols and authentication mechanisms. 

You also need blockchain monitoring tools to track unusual activities and prevent dealings with flagged addresses. These robust security mechanisms and more are the features that help OTC crypto exchanges maintain a reasonable level of privacy and anonymity. 

2. Advanced Trading Mechanisms

Assuming the platform is already secured, you still need the actual trading infrastructure to facilitate these high volume trades. These ensure that transactions are executed with speed, precision, and privacy, thus catering to the needs of institutional investors. 

So, what mechanisms are we talking about here? 

For starters, support for various order types. Remember, we mentioned that OTC crypto exchanges allow buyers and sellers to customize their trades? 

This support for various order types is one of the major ways they’re able to do that.  We’re talking about advanced trading mechanisms like limit orders, market orders, and stop orders. But that’s not all. These platforms also need efficient order matching algorithms to quickly match buyers to the right sellers, as well as customizable pricing models to allow parties negotiate prices, payment terms, and other conditions for the trade. 

Furthermore, OTC crypto exchanges should have a low-latency architecture that is capable of handling large orders without lagging and ensures fast transaction execution. In general, the system must be able to do the actual work of facilitating trades. 

3. Multicurrency Wallets 

There is a high probability that the traders who will be using OTC desks may need to execute trades across different currencies, whether fiat or crypto. Therefore, the OTC crypto exchange must be able to help them facilitate these trades regardless of their chosen currencies. This is why multicurrency wallet support are one of the most essential features of an OTC crypto exchange. 

They allow users to store, deposit, and withdraw so many different cryptocurrencies and tokens in one place. This gives traders access to a wider range of cryptocurrencies, including less liquid and newly issued tokens that may not be available on traditional crypto exchanges. As such, investors have more trading opportunities to exploit. 

Furthermore, by supporting multiple currencies, these wallets enable traders to quickly convert between assets whenever they need. In all, multicurrency wallets simplify portfolio management and reduce the transaction fees associated with moving funds between different wallets or exchanges. 

4. Customizable User Interface

While OTC crypto exchanges do need to incorporate all these “technical features,” the platform must also be structured for easy use. Better yet, it is better for the user interface to be customizable according to each trader’s preference. This makes it easier to navigate the platform and access the features they need quickly — remember, high volume traders might need to execute some trades rapidly. 

More so, the fact that OTC crypto exchanges cater to a diverse clientele with different levels of trading expertise makes a customizable UI a must-have feature. This helps them accommodate both novice and experienced traders while still incorporating advanced trading features. 

A customizable user interface is very essential because it makes the OTC desk more efficient, more usable, and highly adaptable. Any OTC crypto exchange that is able to deliver these qualities is sure to get some competitive edge in the crypto exchange industry.

5. Personalized Support Systems 

While it can be helpful to make the whole process very intuitive with a customizable UI, handling large trades just sometimes prove to be very complex. Therefore, an OTC crypto exchange must be able to help smooth things out by providing some form of personalized customer support. 

For instance, high volume traders may just feel better when they have some form of trade facilitations systems in place to dictate settlement times and terms and other vital processes. Also, customized services like tailored pricing, settlement solutions, and dedicated account managers can go a long way in making sure a trade is executed smoothly. 

These mechanisms help foster stronger client relationships and trust which can prove crucial in these high-stakes situations. By addressing individual concerns, providing tailored solutions, and offering dedicated support teams for complex inquiries, OTC crypto exchanges can attract and retain high-value clients. Oh! Offering multiple support channels and technical assistance teams that are available 24/7 also ensures clients get help when they need it. This sends the right message.

6. Advanced Analytics and Reporting Tools 

Advanced analytics and reporting tools also play a huge role in helping OTC crypto exchanges deliver the best experiences for high-volume traders because they provide valuable insights into market trends, trading performances, and overall portfolio. These insights help traders make informed decisions, manage risks effectively, and optimize their crypto trading strategies. And really, this is usually what determines success when trading such high volumes. 

Real-time market insights tell traders the state of the market up to the most recent minute. This includes price movements and trading volumes. Furthermore, transaction histories provide a clear record of all their trading activities on the platform. 

Other advanced analytics and reporting tools include performance reports which provide summaries of trading performances, profits and loss statements, risk metrics, and other indicators. All these tools function together to help the traders track the value of their holdings over time as well as gauge their performances within certain period. 

With high volume traders, a lot of strategies and careful planning goes into their trading decisions for obvious reasons. Compared to traditional exchanges, the best OTC crypto exchange platforms prioritize this feature to give traders all the insights they need to get the best out of the market. 

Conclusion 

OTC crypto exchange features are all about creating a conducive environment to faciliate sensitive high-volume crypto trades. They’re all about ensuring privacy and anonymity, personalized trading, faster settlement times, increased liquidity, little or no chances of slippage. 

These core benefits of OTC crypto trading can be guaranteed with robust security mechanisms, advanced trading mechanisms, personalized support systems, customized interfaces, and top-level analytics and reporting tools. And that’s what crypto trading platforms built by Debut Infotech offers. Our cryptocurrency exchange development company focuses on security, efficiency, and functionality. 

Reach out to us today if you would like to enter the OTC crypto exchange market with a competitive edge!

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