Cryptopedia
Exchange Trading
In cryptocurrency, there are two ways to trade, exchange trading and
over-the-counter trading (customer-to-customer trading), respectively.
And the following passage would describe what they are and what the
differences between them.
Exchange trading
In cryptocurrency, exchange trading is an activity where the traders trade on the exchange. Since its characteristic of trading on a controllable and centralized platform, which is in charge of displaying the price of the candlestick and making a match between the sellers and the buyers, trading on an exchange is relatively safe.
Procedures:
The seller and the buyer respectively decide the price and amount of the tokens and place an order on the exchange, after which the platform makes a fast and close match according to the price and the amount between the seller and the buyer. When the deal is done, the traders could check the change of their funds to ensure the success of the transaction. During the trading, the number and the ID of the counterparty are kept secret to the traders to protect the privacy of both. Besides, the platform is also responsible for recording the latest trading volume and publishing the data to the public for reference.
Given its convenience, most of the investors choose to trade on an exchange, such as spot trading on Gate.io.
Over-the-Counter Trading (OTC Trading) Or Customer-to-Customer Trading (C2C trading)
Over-the-Counter Trading (OTC Trading) Or Customer-to-Customer Trading (C2C trading) are two ways for the seller and buyer using the C2C platforms to trade. For OTC trading, the seller and the buyer are required to provide their ID and transaction information to the platform. The buyer pays funds to the seller via an offline transfer instead of via the platform. The platform only records the data of each order and publish the transaction price on the market.
OTC trading can be high-risk when the seller and buyer privately trade via online social media software. In previous times, C2C trading worked through Telegram and other text channels, where the chatting group founder acted as an agency to provide services, only guaranteed with personal credit, for the traders charging the handling fees. Therefore, this kind of trading has a high risk on account of its lack of transparency and absence of supervision.
Advantages and Risks
Compared to exchange trading, OTC trading or C2C trading is a scattered market, on which the traders can easily trade without leaving any trace of transaction information. Besides, the trading volume can be more significant. However, it is accompanied by high risks for lacking supervision.
With a settled trading time and place, exchange trading is more convenient and transparent, so the risk is relatively low. All prices of the orders are recorded on the platform while experiencing the convenience of getting the last price, an apparent indicator of the actual market trends.
Both exchange trading and OTC trading/ C2C trading are crucial to the cryptocurrency market.
Exchange trading
In cryptocurrency, exchange trading is an activity where the traders trade on the exchange. Since its characteristic of trading on a controllable and centralized platform, which is in charge of displaying the price of the candlestick and making a match between the sellers and the buyers, trading on an exchange is relatively safe.
Procedures:
The seller and the buyer respectively decide the price and amount of the tokens and place an order on the exchange, after which the platform makes a fast and close match according to the price and the amount between the seller and the buyer. When the deal is done, the traders could check the change of their funds to ensure the success of the transaction. During the trading, the number and the ID of the counterparty are kept secret to the traders to protect the privacy of both. Besides, the platform is also responsible for recording the latest trading volume and publishing the data to the public for reference.
Given its convenience, most of the investors choose to trade on an exchange, such as spot trading on Gate.io.
Over-the-Counter Trading (OTC Trading) Or Customer-to-Customer Trading (C2C trading)
Over-the-Counter Trading (OTC Trading) Or Customer-to-Customer Trading (C2C trading) are two ways for the seller and buyer using the C2C platforms to trade. For OTC trading, the seller and the buyer are required to provide their ID and transaction information to the platform. The buyer pays funds to the seller via an offline transfer instead of via the platform. The platform only records the data of each order and publish the transaction price on the market.
OTC trading can be high-risk when the seller and buyer privately trade via online social media software. In previous times, C2C trading worked through Telegram and other text channels, where the chatting group founder acted as an agency to provide services, only guaranteed with personal credit, for the traders charging the handling fees. Therefore, this kind of trading has a high risk on account of its lack of transparency and absence of supervision.
Advantages and Risks
Compared to exchange trading, OTC trading or C2C trading is a scattered market, on which the traders can easily trade without leaving any trace of transaction information. Besides, the trading volume can be more significant. However, it is accompanied by high risks for lacking supervision.
With a settled trading time and place, exchange trading is more convenient and transparent, so the risk is relatively low. All prices of the orders are recorded on the platform while experiencing the convenience of getting the last price, an apparent indicator of the actual market trends.
Both exchange trading and OTC trading/ C2C trading are crucial to the cryptocurrency market.
