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

1 answers

• Nov 28, 2021 · 3 years ago
  At BYDFi, we understand the risks associated with OTC trading in the cryptocurrency market. While OTC trading can offer certain advantages, such as increased privacy and flexibility in terms of trade size and settlement, it's important to be aware of the potential risks involved. One of the main risks is the lack of price transparency. Unlike trading on a centralized exchange, where prices are publicly available, OTC trades are often negotiated privately between parties. This lack of transparency can make it difficult to determine the fair market value of the cryptocurrency being traded, potentially leading to price discrepancies and unfair deals. Additionally, OTC trading can be more susceptible to counterparty risk, as individuals are relying on the trustworthiness and integrity of the other party involved in the trade. It's crucial for individuals to conduct thorough due diligence and establish trust before engaging in OTC trading to mitigate these risks.
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