Bitcoin OTC Service

The cryptocurrency market is replete with stories of ‘Whales’, high net worth individuals who are in possession of at least several million dollars worth of bitcoin. The term “whale” refers to the huge waves caused by the trades made by these traders on exchanges due to the sheer size of their transactions.

Most whales within the cryptocurrency market are early Bitcoin and Ethereum adopters, investment bankers, venture capitalists, cryptocurrency hedge funds, and retail investors who build sizable positions by trading in and out of altcoins and ICOs. These require cryptocurrency OTC services in order to execute trades without impacting the market or showing their strategy to the public.

Whilst the current players are indeed significant in size, it is only a matter of time until the REAL whales start showing interest in the field. Institutional investors such as banks, insurance companies, pensions and hedge funds are the real whales due to the vast amount of money they hold. For instance, pension funds manage over $6 trillion in assets, while the cryptocurrency market hasn’t even reached the one trillion-dollar mark yet.

Currently, the total market cap of crypto market is a little over $300 billion, as institutional buyers enter the market, even opening a modest (by their standards) position of $100B would cause a dramatic impact with prices rising higher as the cryptocurrency market isn’t large or liquid enough to handle such trades.

Bitcoin OTC Trading service

This is where our bitcoin OTC trading comes into the picture. If a UHNW individual with a net worth of $100m were to invest 0.1% of their wealth into the cryptomarket, the trade would cause significant price slippage disrupting their trade strategy.

Slippage often occurs during periods of higher volatility when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of trade.” — Investopedia

An alternative strategy would be to contact a cryptocurrency OTC broker, who would match the trade with one or more sellers. All parties would agree on a price (typically a few points above market price) and execute the trade in private without impacting the market in any way at all.

While the main advantage of OTC trading is quite clear, the confidentiality of the activity might be an additional benefit to those who wish to retain their privacy. Using dark pool ensures that all transactions are private, so trading strategies remain opaque.

It is estimated that one of the largest purchases on the Bitcoin OTC market was around $50m and eight-figure trades are now a regular occurrence. To deal with large orders, OTC brokers break deals into tranches to provide both comfort and the ability to source the required volume of Bitcoin.

Buy Bitcoin OTC

ICO Launch Malta has teamed up with a UK bank and a major mining pool in order to provide the most secure and seamless Bitcoin OTC exchange service in the market. The process is as follows:

Buy side discloses intended purchase quantity and sell side finder discloses discount available in the market for that amount based on information provided by their Seller. If within range, they move forward.

  1. Non-Circumvent, Non-Disclosure (NCND) documents will be signed by all connected parties:
    1. NCND 1: Buyer/Buyside Brokers
    2. NCND 2: Seller/Sellside Brokers
    3. NCND 3: Sellside Brokers/Finders
    4. NCND 4: Buyside Brokers/Finders
  2. Buyer submits the Proof of Funds (POF). Names and account numbers should be redacted from these documents.
  3. Seller broker goes to large network of miners and large BTC holders directly to see who is interested in selling at the agreed upon discount. This can take a couple of days depending on quantity and KYC requirements.
  4. Once appropriate amount of bitcoin or Ethereum is sourced, the finders will notify buyside parties.
  5. Selling party sends Proof of Coin (POC) to Finder, who passes it to Buyside Parties. This process can be negotiated to appease both sides.
  6. Buyers and sellers complete any required KYC certifications.
  7. Buyer/buyer broker and seller/seller broker negotiate a pricing fixing date/time, pricing portal (e.g. coinmarketcap.com) and engage an escrow bank (provided by us) to use for transaction. Once agreed upon, buyer and seller sign contracts.
  8. Buyer transfers to the End Escrow account in the value of the Purchase
  9. Seller: Transfers the Bitcoins to buyer Wallet.
  10. Escrow releases funds to the Seller account and funds are automatically transferred to the facilitating parties.