In the context of Bitcoin and cryptocurrency, Over-The-Counter (OTC) Trading refers to private transactions for purchasing or selling cryptocurrency. There is no public order book because these transactions are not conducted on regular exchanges. This increases the privacy of both buyers and sellers.

Privacy and low impact on market prices are the most appealing features for OTC users. OTC is designed for 'Whales' who want to buy or sell large amounts of cryptocurrency. If these 'Whales' decided to buy a large amount of cryptocurrency on an exchange, their transaction would be heavily influenced by slippage. This makes OTC trading appealing to high-net-worth individuals looking to execute large trades.

Over-the-counter (OTC) trading refers to the buying and selling of financial instruments directly between two parties, without the use of a centralized exchange. In OTC markets, transactions are typically conducted through a network of dealers or brokers who negotiate prices based on supply and demand.

OTC trading is common for assets like forex, bonds, commodities, derivatives, and even some stocks that aren’t listed on major exchanges.

One key feature of OTC trading is its flexibility—parties can customize contracts to fit their specific needs. However, it also carries higher risks compared to exchange-traded markets because prices may be less transparent, and there is no central clearinghouse to guarantee trades, leading to potential counterparty risks.