Not something most of us have to worry about unless our financial status changes.
I have often wondered how investors with big money get in and out of their investments without making an impact on the market. This is an example and not just for COTI but a service provided for all crypto tokens that kraken has listed. I haven't looked, but I presume other exchanges offer a similar type of service.
What is Binance OTC?
Binance OTC is a specialized trading desk within the Binance cryptocurrency exchange that allows users to conduct large-volume trades directly with other traders. It caters to institutional investors, high-net-worth individuals, and traders who require enhanced liquidity and personalized service. The OTC desk facilitates off-exchange trades, enabling participants to buy or sell digital assets in a secure and efficient manner.
OTC crypto buying and selling is a bit more like a private banking service offered to those clients who have a high net worth. These individuals wanting to use this type of service will have to offer far more than just KYC by proving where the funds originated from and that there is no laundering taking place. I am sure Binance who is being bay sat by the SEC these days is following all the correct procedures and this OTC desk will be under heavy scrutiny.
My thinking is if someone had to invest a sizeable sum in a particular token it would make little difference because these tokens are already being held by the exchange themselves in their own capacity. They would have accumulated these over a period of time so the large investment is basically already built into the current market price. Exchanges are businesses and there is more to an exchange than what we see with far bigger deals happening out of view which all add to their bottom line.
The over the counter method of acquiring or selling crypto would help safeguard the price from either pumping or crashing keeping the price stable. You always think of the upside when large buy orders are placed but it also can go the other way and this is something we tend to skip only looking at our investments in a positive light.
I would say the OTC method would suit both parties and if we used a $100K value as an example for a buy in it would cost a hell of a lot more per token by the time you spent the $100K. This could easily end up being 10% less than what you may have spent doing an OTC deal with the exchange.
Interesting enough this is how I see many of the EFT's operating when accumulating and buying their Bitcoin. WE know Coinbase was announced as one of the exchanges being used and they must have their own stash of Bitcoin which they could use or purchase them at a rate that would not create a buying frenzy pushing the price up. This would be counteractive when buying for a client who wants to pay the best price possible and not receiving less than what was originally expected.
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