In the Cryptocurrency Domain, What Is a Common Example of an OTC Derivative versus an Exchange-Traded One?
A common exchange-traded derivative is the Bitcoin (BTC) futures contract listed on a regulated exchange like the CME, or perpetual futures on a crypto exchange. A common OTC derivative is a customized crypto forward contract or a bespoke crypto option negotiated directly between a large institution and a crypto desk.
OTC crypto derivatives are often used for large block trades to minimize market impact.