Bitcoin & Crypto OTC Trading in Australia Explained

Over-the-counter trading, better known as OTC trading, offers an alternative to exchange trading, allowing direct transactions between two parties. Although OTC trading has its roots in traditional finance, it has emerged as a popular trading method within the cryptocurrency industry in Australia due to its distinct benefits for large volume traders. In this article, we will demystify OTC trading, exploring its advantages and disadvantages and importantly, how to trade crypto OTC in Australia.

What is Over-the-Counter (OTC) Trading?

OTC (Over-The-Counter) trading involves the direct trading of cryptocurrencies between two parties, without using the public order books of traditional exchanges. The process mainly concerns two types of direct exchanges. In the first, you would be dealing with crypto-to-crypto trades. A common example of this is swapping Bitcoin, also known as BTC, for another cryptocurrency like Ethereum, or ETH.

The second type is a crypto-to-fiat exchange. In this scenario, you might consider trading Tether (USDT), into a fiat currency such as Australian Dollars (AUD). These transactions are typically mediated by a crypto OTC desk, which acts as a matchmaker between buyers and sellers.

Advantages of OTC Trading

There are several advantages to trading crypto OTC, including:

Better Liquidity: OTC trading enables traders to execute large trades without significantly impacting market prices. OTC desks can tap into global liquidity networks, offering deeper liquidity and better spreads. This means traders can secure favourable prices without causing major price shifts, unlike on regular cryptocurrency exchanges where big trades might cause price fluctuations due to less liquidity.

Cost-effective: OTC trading can be more economical for high-volume traders. By avoiding typical crypto exchange trading fees and benefiting from direct buyer-seller transactions that OTC desks offer, traders may achieve more favourable prices.

Privacy: OTC transactions offer discretion compared to the public order books of traditional exchanges where trades can be seen. This is especially useful for institutional traders and high-profile individuals who prefer to keep their trading activities private to avoid market speculation or revealing trade strategies.

Greater Flexibility: OTC desks provide a more adaptable trading environment compared to traditional exchange platforms. Traders can negotiate details like pricing and settlement dates, allowing them to tailor trades to current market conditions or their own preferences.

Personalised Tailored Service: Most trading desks provide tailored OTC services. Traders receive guidance from dedicated brokers throughout the OTC process, from setting up an account to executing trades. This focused assistance is beneficial, especially for large crypto transactions, ensuring seamless and more informed trades.

Disadvantages of OTC Trading

While OTC trading offers many advantages, it may not be suitable for all traders. Here are some of the challenges and disadvantages associated with OTC trading:

Limited Transparency: Unlike centralised exchanges that display all trades and prices in real-time, OTC trades are conducted privately. This lack of transparency can sometimes make it challenging to determine if you're receiving the market's best possible price.

Counterparty Risk: Engaging in OTC trading can introduce risks associated with the counterparty's ability to fulfil their obligations. This is particularly true if you are conducting an OTC trade without the help of an established or trusted OTC desk.

Accessibility and Availability: Not all crypto assets may be available for OTC trading, limiting the options for large-scale traders looking to buy and sell large amounts of digital assets.

Complexity for Novice Traders: OTC trading services can be complex, particularly for newcomers to the crypto space. The process can be daunting, and without a clear understanding or reliable OTC trading desk, traders might not secure the best deals.

Lack of Centralised Reporting: OTC trades aren't typically reported or recorded in a centralised system, which can make portfolio tracking and reporting more cumbersome for investors.

Why Trade Bitcoin and Crypto OTC in Australia?

Australian crypto market overview

Australia's cryptocurrency sector is steadily evolving. The nation has seen a rise in digital currency adoption, with a variety of exchanges and OTC brokers available. The Australian Dollar (AUD) is commonly used in crypto transactions, which can be convenient for those trading within the country.

Benefits of trading crypto OTC in Australia

Engaging in OTC trading in Australia brings certain benefits. Australian OTC desks tend to cater specifically to the domestic market, offering competitive pricing in AUD and a wide variety of cryptocurrencies, thereby streamlining the trading process. This allows Australian residents to execute large-scale trades without dealing with the complexities of international transactions or currency conversions.

Can you make money with OTC (Over The Counter) Trading?

Yes, you can make money on OTC trading in cryptocurrency. By leveraging arbitrage opportunities, executing large transactions with minimal market impact, and accessing high liquidity, traders can profit. However, it's important to be aware of risks like market volatility and counterparty risk.

Choosing an OTC Trading Desk

Criteria to consider when selecting an OTC desk

When picking an OTC trading desk, it's important to consider the platform's reputation and track record. Look for desks that emphasise security and customer support. Also, check their liquidity and the range of assets they offer.

Top OTC trading desks in Australia

Coinstash is one of the most trusted crypto OTC trading desks and exchanges in Australia. With a proven track record of reliability, security and unparalleled personalised service, Coinstash has established itself as the go-to platform for traders and investors seeking a seamless and professional crypto OTC trading experience in Australia. With an impressive portfolio of over 1,000+ coins and the strength of vast global liquidity connections, Coinstash not only promises a frictionless trading journey but also ensures no slippage with competitive rates.

Key Considerations for OTC traders

Liquidity

When it comes to making large volume trades, liquidity is critical to avoid price slippage. It's vital to use a platform that offers deep liquidity, ensuring your trades, regardless of size, are executed seamlessly. With Coinstash, traders can tap into our global liquidity networks to secure the tightest spreads with no slippage. 

Security

In OTC trading, security and trust are paramount. Coinstash prioritises this by employing industry-leading security practices and stringent privacy measures. When seeking an OTC desk, Coinstash's commitment to security sets it apart.

Execution and settlement services

Reliable execution and trade settlement services are essential for a smooth OTC experience. That’s why Coinstash provides quick and flexible settlement services, enabling you to lock in your desired price and settle trades instantly or within 24 hours.

How does OTC Crypto Trading Work?

Trading OTC with Coinstash

Engaging in OTC trading with Coinstash is a seamless and user-friendly experience. Here's a simple breakdown of the Coinstash OTC trading journey:

Account setup: To trade with our OTC desk, users need to first verify their Coinstash account. This step ensures compliance with AML and KYC regulations by verifying identity and related documents.

Connecting with the OTC Desk: After verification, users can contact our OTC team via support channels like email or chat to discuss trade specifics, including the type of cryptocurrency and its amount.

Trade quotation and execution: After assessing the market, your broker will provide a quote with a price estimate and settlement terms. With your approval, your broker will then execute the trade. 

Settlement: Once the trade has been executed, if your account is pre-funded the assets will be instantly settled to your account. Alternatively, if we have agreed on a flexible settlement option, then the assets will be settled to your account once the funds have been received.

How to Trade OTC on Coinstash? 

At Coinstash we understand the diverse preferences of our traders, and that's why we provide different methods to trade OTC with our team:

• Trusted Chat Channels: To ensure utmost privacy and discretion, connect seamlessly with our OTC desk via trusted platforms like WhatsApp and Telegram. 
• Dedicated Email Support: For detailed queries or specific trade instructions, feel free to drop us an email at [email protected]. Our team is always on standby to assist.
• Personal Consultations: If you prefer a more direct approach or wish to discuss complex trades, schedule a one-on-one session with our expert OTC team. Simply book your slot here: Book a Consultation.

Conclusion

When trading crypto in large volumes, OTC trading presents a viable alternative to exchange trading with distinct benefits, such as access to deep liquidity, tighter spreads and tailored trading experiences. This method is an important consideration for high-net-worth individuals, Self-Managed Super Funds (SMSFs) and institutional clients looking for more efficient ways of trading in the crypto market. 

Coinstash stands at the forefront of crypto OTC trading Australia, thanks to its unwavering commitment to delivering competitive rates, unparalleled security, and bespoke customer service tailored to individual needs. Recognised for its exceptional service offerings, Coinstash has carved a niche as Australia's premier OTC trading platform. If you’re considering trading Bitcoin and crypto OTC, our expert team at Coinstash is readily available to guide you through the process, ensuring you're well-equipped to make informed trading decisions. Please contact our OTC specialists today and embark on a seamless crypto trading journey!

Frequently Asked Questions