Off-exchange trading involves transactions of digital assets that occur outside the order books of centralized cryptocurrency exchanges. These trades are typically executed directly between two parties, often facilitated by over-the-counter desks or peer-to-peer platforms. Such transactions frequently involve large block trades by institutional investors seeking to minimize market impact or maintain privacy. It offers an alternative execution venue for significant capital movements.
Context
Off-exchange trading plays a substantial role in the digital asset market, especially for high-volume participants. A key discussion centers on the transparency and regulatory oversight of these private transactions compared to regulated exchanges. Future developments may include increased regulatory scrutiny of OTC desks and the emergence of more structured off-exchange trading venues, potentially altering market liquidity dynamics.
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