How Do Bitcoin OTC Trades Work

| Updated on October 4, 2023

Have you always wanted to get your hands on some Bitcoin without having to go through the hassle of buying it from an exchange?

You can do this with over-the-counter trading, also known as OTC trading, using Bitcoin brokers who are willing to connect buyers and sellers in person or online.

This guide will explain how Bitcoin OTC trades work, so you can decide for yourself whether it’s right for you. 

What is a Bitcoin Over-the-Counter Trade?

An over-the-counter (OTC) trade is a direct, private transfer of ownership between two parties who do not interact with any intermediary or exchange.

 A Bitcoin OTC trade will happen if a buyer and a seller agree upon a price. The buyer wants to pay with money, and the seller offers the cryptocurrency of the buyer’s choice in exchange. 

How Does It Work?

Bitcoin OTC is a marketplace for exchanging the BTC directly between the buyer and the seller. The entire process of opening an order, performing a trade, closing order, and collecting or paying out cash takes place in the absence of any exchange.

The buyer holds the digital currency in escrow until payment has been made. It ensures that both parties can trust each other throughout the entire trading process.

Since users may not want anyone else knowing how much bitcoin they own, OTC trades are often arranged via messaging applications like Skype or WhatsApp rather than through public forums like Reddit.

Does Trading Bitcoin OTC Affect Its Price?

There are several advantages to trading bitcoin OTC, including privacy and reduced fees compared with centralized exchanges. However, one of their most prominent features is that Bitcoin OTC trades allow traders to avoid affecting bitcoin’s price. This means they can buy or sell vast amounts of bitcoin without negatively impacting its market price.

Why Trade Through OTC Markets?

As mentioned above, OTC trading is typically a more efficient way of buying large amounts of bitcoins, as it avoids placing undue strain on public order books.

 Additionally, with no real-time transparency into bids and asks posted by buyers and sellers, there is less of an opportunity for market manipulation. Below are some more benefits that have led to a growth in Bitcoin OTC trades.

No Account Needed

You can easily explore Bitcoin trading without setting up an online Bitcoin trading account on different platforms.

No Centralised Marketplace

There is no centralized marketplace. Instead, these transactions are completed peer-to-peer (P2P) with cash or cryptocurrency.  


Unlike traditional exchanges, which require AML/KYC verification for all trades made through them, OTC markets have no such restrictions.

How to Get Started?

The first step in getting started with OTC trades is deciding who you will be trading with. There are several ways to choose a partner, from relying on referrals or word of mouth from current bitcoin OTC traders to using an online directory that lists pre-screened traders.

Once you have chosen your partner, it’s time to decide on a method of payment. Several popular ways have emerged for bitcoin OTC transactions, including bank wires, ACH transfers, PayPal payments, and personal checks.

Once you have taken these steps, and assuming there were no red flags, it’s time to figure out how much you should sell or buy at each price point. 

In addition, there are also several virtual meetup groups where individuals post information about themselves and their rates, so you can learn more from those meetups too. 

Bitcoin is a powerful new technology that can be used in various ways, from making daily purchases to funding your next business venture. If you have not yet tried it out for yourself, there’s no better time than now. Thanks to Bitcoin OTC trading, you can easily trade any amount of Bitcoin at any time. To get started with Bitcoin trading, all you need is an internet connection and a wallet account.

James Wilson

Business and Finance Expert

Related Posts