Have you ever wondered why Bitcoin’s price remains low even when big institutions like BlackRock buy more? Bitcoin miners are holding onto their BTC instead of selling it, and whales—those super-rich investors—are also snapping up more. So, why isn’t the price skyrocketing?
The answer lies in something called Over-the-Counter trading, or OTC for short.
What Is OTC Trading?
When you or I buy Bitcoin, we might go to a public exchange where everyone can see the prices, and our transactions are visible to the market. But when big players like institutions or whales want to buy a large amount of Bitcoin, they often use OTC trading.
Think of OTC trading as a private deal. Imagine you are buying something super valuable but don’t want anyone else to know. You meet the seller in a quiet room, agree on the price, and make the trade right there, away from the crowd. That’s precisely what happens with OTC trades in Bitcoin.
How Does OTC Trading Keep The Price Stable?
When these big players buy Bitcoin through OTC, their trades do not appear on public exchanges. This means the market does not see a massive order that would usually push the price up. Instead, the trade happens quietly, and the price stays stable.
But wait, isn’t everything recorded on the blockchain? Yes, every Bitcoin transaction is recorded on the blockchain, but the blockchain only shows that Bitcoin moved from one wallet to another. It does not reveal the deal’s details, like how much was paid or whether it was part of a big OTC trade.
Final Thoughts
So, the next time you hear that big institutions or whales are buying up Bitcoin, but the price is not moving, now you know why! They are making these deals in private through OTC trading, keeping the market calm and the prices steady.
In crypto, it is not always what you see that matters but what is happening behind the scenes.
For more analysis like this one, make sure to subscribe and hit the notification bell on UseTheBitcoin’s YouTube channel. We post daily videos covering the crypto markets, so don’t miss out!
