For Businesses Diversifying Into Crypto, There’s No Good Reason To Go It Alone
In Brief
Businesses interested in crypto can manage operational and regulatory risks while trading large volumes by using white-glove OTC services that ensure security, compliance, and discretion.
As crypto gains more legitimacy, many businesses are investing in digital assets, seeing them as an alternative store of value and a good way to diversify their treasuries. But trading crypto is an activity that remains inherently risky, and not just because the price of many assets remains extremely volatile.
It’s almost a given that any business considering diversifying into crypto will understand the risks associated with trading these assets. Even the most widely recognized and established cryptocurrencies, like Bitcoin, can still endure massive price swings and potentially erode investor’s capital.
The real challenge for organizations is not crypto’s volatility, but rather the operational risks that come with trading digital assets. If they’re going to invest any significant amount of capital, they’ll need to master the intricacies of blockchain, such as the need to manage and secure private keys, multi-signature wallets and “cold-storage” solutions to safeguard their assets.
For Businesses, Crypto Is Not Just A Security Risk
However, it’s not only the threat of hacking that’s a concern. The reality is that it’s difficult to trust anyone in the crypto space, and that includes the primary cryptocurrency exchanges. The crypto industry is characterized by a patchwork of regulatory requirements that vary from one jurisdiction to another, and that makes it incredibly difficult to know which exchanges can actually be considered compliant. Just because an exchange platform might be regulatory sound in one country, doesn’t mean it will meet the requirements of another.
This can cause huge complications for businesses that get tangled up with them. Should they have funds in an exchange that’s suddenly found to be engaging in illicit activities, they could find their assets are frozen indefinitely, and face a real risk that they’ll never be able to recover them.
Even if the business can withstand the potential financial losses, the damage to its reputation could leave it crippled, for they’re not only risking their investments – they’re also playing Russian Roulette with their banking relationships and investors.
The White-Glove Approach
So is there a way for businesses to dip their toes into the potentially very lucrative world of digital assets without taking unnecessary operational risks? Actually there is, but to do so they’re going to need to follow a “white-glove” approach and forsake the big-name exchange platforms.
Over-the-counter desks are actually one of crypto’s best-kept secrets, working behind the scenes of the public exchange platforms to facilitate billions of dollars in trades that very few will ever know about. These services are designed to cater to financial institutions, hedge funds, crypto mining firms and “crypto whales” that want to remain off-the-radar.
There are good reasons for them to want to do this. If someone attempts to place a high-volume order worth millions of dollars on an exchange platform, they’ll likely see an immediate impact in terms of price slippage and potentially lose thousands of dollars on that trade. By using an OTC desk, their order will be matched with another buyer or seller off the books, ensuring no price impact. OTC desks can facilitate nine-figure trades at rapid speeds while ensuring the confidentiality and price stability that an exchange platform will never be able to provide.
What’s more, OTC desks – like FalconX, Genesis, Binance OTC and On-Demand Trading – adhere to strict U.S., EU, and APAC regulations, meeting the requirements of their individual customers, no matter where they’re based, to eliminate the regulatory risks associated with traditional exchange platforms.
Trading Without Restrictions
OTC desks first arose in traditional financial markets and many of these services do come with caveats, such as high minimum trade requirements and expensive fees, but surprisingly that is not always the case in the rapidly evolving crypto market.
In fact, the goal of On-Demand Trading is to make its white-glove crypto trading service highly accessible to any kind of business. It says it can offer this tailored professional trading service to any customer, because it knows that many businesses that begin making smaller trades will likely increase their exposure to digital assets over time, so it’s not really going to lose money. Rather, it sees its flexibility as more of an investment in its customers, easing them into the digital asset markets.
As with other OTC desks, On-Demand Trading facilitates trades directly between two parties, allowing it to keep slippage to an absolute minimum. It provides step-by-step guidance, locks in asset prices and guarantees same-day settlement. Moreover, it prides itself on customer discretion and iron-clad security. Unlike many other trading desks, it also supports an unusually broad selection of crypto assets, including many obscure ones that cannot easily be found on public exchanges.
On-Demand Trading’s combination of strong security, regulatory compliance and expert guidance at every step is invaluable, paving the way for businesses to begin exploring the crypto markets without the risk of ruining their brand’s reputation. For businesses that are serious about crypto, the use of a white-glove service should not be seen as an extravagance, but rather a strategic and smart decision that avoids jeopardizing their core operations.
Disclaimer
In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.
About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
