How to Safely Conduct Bitcoin OTC Trading

Best practices to use when venturing beyond Bitcoin marketplaces

Bitcoin over-the-counter (OTC) trading offers buyers a discreet way to conduct business.  Several Bitcoin marketplaces are trusted and popular, but transactions conducted there are attached to publicly viewable blockchains.  OTC trading provides buyers the privacy they seek, allowing them to trade directly with individuals.  Bitcoin OTC trading is decentralized banking[1] in its truest sense.

The benefits of Bitcoin OTC trading extend beyond privacy and discretion.  Liquidity is a big draw – there’s a high frequency of trading and funds are easy to move.  There’s also no regulation or oversight.

Safety is another positive[2].  Conducting sizable transactions in a popular Bitcoin marketplace can attract unwanted attention, including theft and hacking.  Remaining off the radar ensures transactions run smoothly.  And, OTC trades come at a lower cost.

There’s a lot to gain when buyers leave the Bitcoin marketplaces behind. But succeeding in Bitcoin OTC trading requires smart and effective maneuvering.

Best practices for Bitcoin OTC trading

Before you decide on an OTC broker, it’s important to research a few key criteria:

  • Trade amounts – What are the minimum and maximum trades that your broker can facilitate? When you think about your objectives, do these limits fit your trading needs?
  • Fees – How much will you be charged per transaction? Is the fee flat or variable?
  • Security – How will your coins be stored (i.e. secure wallet, cold storage, etc.)?
  • Reputation – can this broker provide a great customer experience and an infrastructure of support?

It may take some heavy research to determine trade amounts and reputation, but it’s quite easy to compare fees and security.  For instance, here’s how four of the most prominent Bitcoin OTC trading firms stack up:

  • BitcoinEscrowLtd: The firm requires users to register, but doesn’t ask for personal details, which enables anonymous transactions. BitcoinEscrowLtd also requires 2-factor authentication.  When it comes to transaction fees, buyers and sellers can agree to split the fee or choose one party to cover the full amount.  Unfortunately, the fee percentage isn’t clearly stated.
  • Escrow My Bits: Escrow My Bits’ level of security depends on which of its 4 escrow options you choose. The 2 multi-signature options (regular or pegged to a fiat value) offer the greatest protection.  But you’ll need to do some digging to figure out which option is best for you.  Its fees are a flat 1%.
  • Global Escrow: Global Escrow has built-in inspection and auto-refund periods so that buyers have a chance to verify and accept physical goods. But the service relies on the buyers and sellers to outline terms of a successful delivery and relies solely on the buyer to confirm receipt of goods. This puts trust in the buyer, which is great, but it doesn’t cancel out chances of fraud.  Fees here are 1% as well.
  • Anaiv Capital: This firm has the necessary infrastructure to safely and securely handle larger OTC transactions. Coins are stored in a highly secured Escrow wallet and kept in cold storage. Additionally, all transactions are supervised by a third-party, AML Self-regulatory body. And, fees are just 0.5%.

There are more than 4 Bitcoin escrow services on the market, but this comparison offers a glimpse of what the research process is like.

Once you’ve selected a broker who satisfies each criteria point, there’s still some important work for you to do. You have a set of new, unique concerns[3].

First, don’t continue to shop around.  It’s natural to seek the best deal and to do this, you’ll want to contact multiple brokers.  But in doing so, you’re giving brokers information about your trades, which can negatively impact your prospects. Instead, stick to contacting one OTC broker, or two maximum, if you must.

Be firm, and don’t operate predictably. When you contact a broker, they will most likely woo you with a low rate, but after shopping around, the final rate might be higher.  Don’t let them take advantage of you.  When you’re given a low rate, lock it in and don’t accept anything different. Or even better, find a broker with a flat rate that’s guaranteed.

Be wary of the market in which you’re trading.  In a slow market, you may think you’re at an advantage because you’re trading when there’s less activity, but this can lead to unfavorable trade rates.  Consequently, in a volatile market, prices can rise and fall in record time.  You could reap the benefits – or suffer great losses.  Take the time to assess the market before making any big moves.

Avoid the pitfalls of Bitcoin OTC trading by conducting your due diligence, choosing the right escrow service, and navigating the market like a pro.



[1] Smith, Ryan. (2018, August 24). A Beginners Guide to OTC Markets in Crypto. Retrieved from:

[2] (2018, October 24). OTC cryptocurrency trading: How to make big trades. Retrieved from:

[3] SFOX. (2018, September 4). The 6 Costliest Mistakes People Make When Trading Bitcoin OTC. Retrieved from: