Crypto OTC Trading Expected To Gain Popularity After FTX Collapse

By Kevin • December 27, 2022 9:41 pm • Comments

Most crypto exchanges are considered centralized exchanges where control of the digital assets belongs to the exchange company itself.

The recent collapse of the FTX exchange has weakened public trust on these centralized exchanges and many are now looking at other possible alternatives.

One of the other options that has been gaining some traction recently is crypto OTC trading.

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OTC stands for ‘over the counter’ which was how crypto was traded before many of these modern crypto exchanges existed.

The demand for OTC services is still very hot due to the high demand for the ability to convert crypto to fiat and vice versa in a convenient way.

CoinTelegraph reports:

Cointelegraph spoke with BestChange, a Russian OTC crypto exchange aggregator, to learn more about the current state of OTC markets.

“The role of OTC is sometimes underestimated amid the all-encompassing marketing of centralized exchanges,” BestChange chief analyst Nikita Zuborev said. According to the exec, OTCs often act as an entry point to crypto for most users.

BestChange users often resort to the services of OTC exchangers — portals that act as fiat onramps to crypto — in order to replenish the balance on a crypto exchange or sell their crypto, Zuborev told Cointelegraph.

“If for the Central European countries and the countries of North America there are quite convenient ways of direct replenishment from a bank card, then for the countries of Eastern Europe and Central Asia there are no such options, and exchangers remain the only convenient way to work with cryptocurrency,” Zuborev stated.

Executives in the OTC markets have stated that the data is now showing that there is a significant influx of new users in the space following the FTX collapse.

The other option that is expected to become more and more popular is the rise of decentralized exchange which is also known as DEXs.

Decentralized exchanges and decentralized apps mean that there is no single entity like a company that is responsible for managing the digital assets.

Instead, the model relies on blockchain technology to facilitate all the transfers and all the users interact with the blockchain directly without have a middleman.

This is much safer and would prevent any future occurrences like the FTX fallout as all investor capital would be completely safe.

CoinTelegraph concludes:

BestChange serves several countries, including post-Soviet states like Ukraine, Kazakhstan, Georgia and Belarus. According to data from SimilarWeb, users from Russia and Ukraine make the biggest amount of visits on BestChange, with 48% and 15% of traffic coming from these countries, respectively.

“Most centralized exchanges are under pressure from European and North American regulators, and our segment is mostly represented by small local services that obey the laws of the country of location so they can serve Russians, Ukrainians, Europeans, Africans, residents of Asia, Oceania independently of each other,” he stated.

According to Zuborev, global sanctions against Russia have not had a negative impact on BestChange’s OTC market services but even have driven more adoption instead.

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