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Why Do Large Institutions Prefer OTC Markets for Executing Massive Cryptocurrency Block Trades?

OTC allows large crypto block trades to be executed privately, avoiding market impact and slippage on public exchange order books.
Greeks.live05.12.25

Why Do Large Institutions Prefer OTC Markets for Executing Massive Cryptocurrency Block Trades?

Institutions use OTC markets to execute large trades without causing significant price movements, a phenomenon known as 'slippage' or 'market impact.' Since OTC trades are negotiated privately, the transaction volume is not immediately visible on public exchange order books. This allows for discreet, efficient execution at an agreed-upon price, preserving the integrity of their trading strategy.

How Does a Cryptocurrency Exchange’s Order Book Depth Directly Influence Potential Slippage?
How Does the Depth of the Order Book Influence the Price Movement from a Large Order?
What Is the Main Advantage of an OTC Trade over a Decentralized Exchange (DEX) Swap for a Large Volume?
In a Dark Pool, How Does the Execution of a Limit Order Differ from a Public Exchange?
How Does TWAP Help Mitigate Slippage in Volatile Cryptocurrency Markets?
Can a Block Trade Be Used to Establish a Large Derivatives Position?
How Does the Lack of a Central Limit Order Book Affect OTC Pricing and Transparency?
What Is a ‘Block Trade’ in the Context of Cryptocurrency?

Glossar

Otc Markets

Market ⎊ The segment of the cryptocurrency ecosystem where trading occurs directly between two principals without the use of a centralized exchange order book, often involving bilateral agreements for customized derivatives.

OTC Trades

Structure ⎊ OTC trades, within cryptocurrency and derivatives, represent privately negotiated agreements bypassing public exchanges, offering bespoke terms unavailable in standardized markets.

Large Trades

Execution ⎊ Large trades, within cryptocurrency and derivatives markets, represent order flow significantly impacting short-term liquidity and price discovery, often originating from institutional investors or high-frequency trading firms.

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