Over The Counter [OTC]

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Over The Counter is defined as a transaction made outside of an exchange.

Often abbreviated as OTC, these transactions are slower and cannot be programmed like transactions on an exchange.

The disadvantage of transactions on an exchange is that large transactions shift the price. Let’s say Johnny is selling his bitcoin for $10,000, Bill is selling his for $11,000, Alice is selling hers for $12,000, and so on. A big purchase will clear out Johnny, Bill, Alice and the rest of the sellers causing an increased price. Increased prices means a higher cost for big buyers.

The advantage of OTC purchases are that they are not as visible as those on an exchange and will likely not shift the price at all.

Bitcoin ATMs, payment processors are two ways you can make OTC purchases.

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