Over-the-Counter (OTC) deals have become a preferred method for large-scale transactions in crypto 2024. But what are OTC deals exactly? And how do crypto brands navigate them in today’s time?
As Lunar Strategy, our specialized approach to managing and executing OTC deals not only makes us early adopters but also proficient negotiators in the space. This article delves into the intricacies of Lunar Strategy’s approach and how it ensures secure, efficient, and profitable transactions.
Understanding OTC Deals
Over-the-Counter (OTC) deals involve directly trading crypto between two parties, bypassing traditional exchanges. This method is particularly favored for its ability to handle large volumes without affecting market prices. In an OTC transaction, buyers and sellers negotiate directly, often with the help of an intermediary, to agree on the price and terms of the trade.
OTC deals are crucial for institutional investors, high-net-worth individuals, and crypto whales who may need to discreetly move significant amounts of cryptocurrency. Traditional exchanges might not have the liquidity to handle large transactions without causing slippage, which can lead to significant price fluctuations. Additionally, public trades on exchanges can attract unwanted attention and potentially impact market sentiment.
How OTC Markets Work
The OTC market operates in a decentralized manner coordinated by corporations and securities companies. Trading activities are conducted electronically, including unlisted stocks traded on unofficial counters. Recent trends indicate significant growth in the OTC market, with global OTC trades worth $160.95 trillion in 2021 and a 19% increase in Q1 2024 compared to Q1 2023.
In crypto, OTC desks have overshadowed institutional exchanges, with OTC trading volumes reaching $1.4 billion daily compared to $74 million on institutional CEXs in 2023. This remarkable growth, with 93.33% of OTC desks reporting steady or rising client numbers from 2022 to 2023, highlights the increasing preference for OTC trading among institutions.
The primary advantages of OTC deals include:
- Privacy: OTC transactions are not publicly recorded on the exchange order books, offering a higher level of privacy for the parties involved.
- Flexibility: Parties can negotiate terms directly, allowing for more customized and flexible deal structures.
- Reduced Slippage: By avoiding the open market, large transactions can be executed without affecting the asset's price.
However, the complexity and risks associated with OTC transactions necessitate a robust strategy. These deals require meticulous planning, extensive market knowledge, and secure execution to mitigate counterparty default risks, market volatility, and regulatory compliance risks.
This is where Lunar Strategy’s expertise becomes invaluable, providing our clients with a seamless and secure OTC trading experience.
Lunar Strategy’s Unique Crypto OTC Approach
1. Comprehensive Market Analysis
We begin with an exhaustive market analysis to determine the optimal timing and pricing for each OTC deal. Leveraging advanced analytics and real-time market data ensures that clients receive the best possible terms.
2. Secure and Private Transactions
Security and privacy are crucial for OTC deals. We employ state-of-the-art encryption and secure communication channels to protect client information and transaction details.
3. Customized Deal Structures
Understanding that each client has unique needs, we offer customized deal structures. Whether it’s a straightforward buy/sell transaction or a more complex agreement involving multiple assets, our team of experts tailor the deal to meet specific client requirements.
4. Liquidity Solutions
One of the significant challenges in OTC trading is maintaining liquidity. We also provide innovative liquidity solutions, ensuring clients can execute large transactions without encountering liquidity issues.
5. Expert Negotiation and Execution
Our team of seasoned negotiators and traders bring in a wealth of experience. They handle all aspects of the negotiation and execution process, ensuring that deals are completed efficiently and to the client’s advantage.
Conclusion
The Lunar Strategy approach to OTC deals combines in-depth market knowledge, cutting-edge tech, and personalized service. With over half a decade of experience in crypto marketing, an expansive and evolving KOL network, and over 150 projects handled, we’re navigating headstrong into OTC deals in crypto and helping our clients connect dots faster and more efficiently than ever.
Beyond the transaction itself, Lunar Strategy offers comprehensive support and post-deal services. This includes detailed reporting, performance analysis, and strategic advice for future transactions. Our ongoing support ensures that clients are well-prepared for subsequent deals.
If you’re a project, investor, or brand looking to expand into OTC deals, feel free to book a direct discovery call with us. We’re always here to help!.
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