Over-the-counter (OTC) trading in digital assets offers several much-discussed advantages to institutional clients over CEX-based trading, including: 

  • Reduced Price Impact: Large trades on exchanges can cause significant price slippage due to the impact on the order book. OTC trading allows for the execution of large orders without affecting the market price. 
  • Increased Privacy: OTC trading typically occurs off-exchange and is often facilitated by brokers or specialized desks, off-chain, and without the trade activity being visible in a public order book. 
  • Customized Trading Solutions: OTC desks can provide tailored solutions to meet the specific needs of traders, including price negotiation, settlement options, and trade size flexibility. 
  • Reduced Counterparty Risk: OTC trades are often conducted bilaterally between counterparties, and with 3rd party settlement platforms, reducing the risk of default associated with centralized exchanges. 
  • Access to Liquidity: OTC desks often have access to deep pools of liquidity, allowing traders to execute large orders quickly and efficiently, even in markets with low trading volumes. 
  • Faster Settlement: OTC trades can offer faster settlement times compared to trades on exchanges, which may be subject to delays due to withdrawal limits, deposit confirmations, and other factors. 

So why does onboarding and maintaining a relationship with an OTC desk sometimes feel like such a step backwards? The reality is that OTC Trading is generally regarded as an archaic experience that sacrifices UX at the altar of deep liquidity market access. And exchange platforms, for better or worse, just look cool – catering effectively to a younger generation of traders who expect a sharp UI and never expect to not be able to reach anyone at their trading venue other than an AI chatbot, even if they have a problem. 

Examples OTC Trading Turn-Offs: 

  • Manual Processes: Phone calls, messenger apps, and email communication are often utilized to negotiate trades and settle transactions. 
  • Requirement of Personal Connections: Younger generations of traders are not well connected to tradfi veterans who have moved into crypto, creating a new barrier to entry and making it more challenging to access deep liquidity 
  • No Tech: OTC trading desks are often slow to adopt new technology and modern trading tools due to institutional inertia, lack of resources, or drive to innovate. 

BlockFills recognizes the need to offer the deep liquidity and high level of service associated with an OTC operation without sacrificing security or client UX. We’ve reimagined the OTC trading experience by featuring: 

  • Multiple GUIs with varying levels of complexity catering to a wide range of traders 
  • Transparent, size-responsive streaming pricing 

Everything comes without strings attached – there are no monthly fees or minimums required. Institutional clients of BlockFills enjoy the UX of a modern platform, the deep liquidity associated with an OTC desk, and the discretion of a “dark pool” trading environment.  Best of all, we’re able do all of this with the “white glove experience” a client might expect from a trading team managed by tradfi industry veterans – but not at the expense of automation and security. 

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