You might’ve heard about over-the-counter investing before. The term itself is not specific to cryptocurrencies. It’s possible to trade stocks and any number of other securities over-the-counter as well.
Over-the-counter cryptocurrency investing is for high-net-worth individuals that want to buy or sell large amounts of digital assets without creating a huge swing in the price.
Although the cryptocurrency market is collectively worth trillions of dollars, it’s still challenging to fill large orders at a market price that is reasonable to the investor.
That’s where the Coin Nerds over-the-counter trading service comes in. We understand that you value getting into or out of a significant crypto investment at a fair market price in a way that is secure and maintains your privacy.
Coin Nerds does all of the above.
Why the Cryptocurrency Market Needs Over-The-Counter Trading
Imagine that you’re looking to buy $500,000 worth of Bitcoin at the current market price and you want to do it right now. Your order is set up to trigger at whatever the market price is.
Even though Bitcoin’s market capitalization is over $1 trillion Canadian, your order can only trigger if investors selling their Bitcoin to you have the funds available and are looking to sell as you’re trying to buy.
What happens if you place your order to trigger at the market price and the number of sellers willing to help fulfill that order is running out? It means that the cost of acquiring your $500,000 worth of Bitcoin is going to go up. You’re essentially increasing your costs because the number of sellers willing to accommodate you is running out. They can therefore charge you a higher price to meet your demands. This phenomenon happens in real-time. The added, often times unnecessary cost of fulfilling a large order is called slippage.
Slippage means the price is not necessarily going up because there are a million people like you looking to place the same order. It’s really because you’re buying too much at one time and the only way to fulfill your market order is to make it costlier for you since you’re the one placing demands on the market.
How Whales Buy Large Amounts of Bitcoin without Moving the Market
A whale is an investor who has a lot of capital to invest. Crypto whales who want to buy $1 million worth of their favourite tokens don’t buy them all in one shot because they don’t want to inflate the market price and lose value to slippage.
Instead, they go to an over-the-counter trading service like the one offered by Coin Nerds and execute a strategy that involves buying or selling the desired amount of cryptocurrency in a strategic way that may involve several transactions, but won’t cost them an unnecessary premium.
Publicly traded companies investing in cryptocurrency follow this approach on a larger scale regularly.
Thanks to the over-the-counter service at Coin Nerds, you can implement the same strategy and build your own crypto treasury. Just like the big boys.