What Is OTC Trading?
Due to regulatory restrictions on direct RMB trading, exchanges facilitate fiat-to-crypto conversions through Over-The-Counter (OTC) trading. This peer-to-peer model resembles Taobao's C2C platform, with exchanges acting as escrow agents.
Most exchanges support OTC trading for USDT, BTC, and ETH. For beginners, converting fiat to USDT is ideal because:
- USDT is a stablecoin pegged 1:1 to the USD
- Minimizes exposure to crypto market volatility
- Enables seamless conversion between cryptocurrencies
Step-by-Step OTC Trading Process:
- Register on exchange apps using email/phone
- Complete identity verification (KYC requirements vary by transaction size)
- Buy USDT in the fiat trading zone
- Transfer USDT from fiat to spot account for further trading
👉 Master OTC trading strategies
Understanding Spot Trading
Spot trading involves direct crypto-to-crypto exchanges (e.g., BTC/ETH) without fiat intermediation. Key advantages:
- Access to thousands of trading pairs
- Lower fees compared to fiat gateways
- Real-time price charts and order books
Account Types Explained:
| Account Type | Purpose | Features |
|---|---|---|
| Fiat Account | RMB ↔ Crypto conversions | No transaction fees |
| Spot Account | Crypto ↔ Crypto trading | Supports limit/market orders |
Why Transfer Between Accounts?
Spot trades require assets in your spot account. This separation:
- Complies with financial regulations
- Simplifies accounting for tax purposes
- Enhances security through fund segregation
Spot Trading Pairs Demystified
- BTC/ETH: Buy ETH with BTC
- EOS/USDT: Buy EOS with USDT
- LTC/BTC: Buy LTC with BTC
Pro tip: Trading USDT pairs provides clearer valuation since USDT mirrors USD value.
👉 Advanced spot trading techniques
FAQs
Q: Is OTC trading safer than regular crypto purchases?
A: Yes - exchanges verify counterparties and hold funds in escrow until both parties confirm receipt.
Q: Why choose USDT over BTC for fiat conversions?
A: USDT's stable value prevents losses during market fluctuations, unlike volatile BTC.
Q: Can I trade directly between fiat and altcoins?
A: Typically no - you'll need to convert fiat→USDT→target altcoin in most cases.
Q: How long do OTC transfers take?
A: Transfers between exchange accounts are instant; bank transfers depend on payment method (15min-24hr).
Q: What's the minimum trade amount?
A: Varies by exchange - some allow trades under $10, others require $100+ minimums.
Key Takeaways
- OTC bridges fiat and crypto worlds while complying with regulations
- USDT stability makes it the preferred entry point
- Account segregation ensures proper fund management
- Spot trading unlocks the full crypto market potential
Remember: Always verify counterparty ratings in OTC trades and use limit orders in spot trading for better price control.