Can you achieve high volume USDT Arbitrage India via OTC? To answer that question, Let us first understand, What is OTC in the context of Bitcoin and Cryptocurrency?
What is OTC
Over-The-Counter or OTC Trading in the context of Bitcoin and Cryptocurrency, are private deals for buying or selling crypto. Because these transactions are not conducted on regular exchanges, there is no public order book. This provides increased privacy for both buyers and sellers.
The biggest appeal for OTC users is the privacy and low impact it has on market prices. OTC caters to ‘Whales’ who are looking to buy or sell large amounts of cryptocurrency. If these ‘Whales’ chose to purchase a large sum of crypto on an exchange, their transaction would be heavily impacted by Slippage (Slippage is the difference between the expected price of a trade and the price at which the trade is executed on Crypto exchange. Slippage can occur at any time but is most prevalent during periods of higher volatility when market orders are used. It can also occur when a large order is executed on a Crypto exchange but there isn't enough volume at the chosen price to maintain the current bid/ask spread). This makes OTC trading a desirable option for high net worth individuals looking to make large trades.
The estimate is that more than half of all Cryptocurrency trades happen privately. Moreover, some estimate that the volume of Cryptocurrency traded OTC is two to three times larger than regular exchanges.
How OTC Trading Works?
OTC is by nature an intimate and bespoke service. OTC Traders maintain a network of Cryptocurrency investors and Cryptocurrency sellers. Additionally, larger OTC organizations maintain an inventory of various crypto currencies to meet their projected demand at any given time.
OTC Traders are constantly up to date on who’s buying, selling, and the best time to conduct a given transaction. Once a buy or sell order arrives, the broker will procure the crypto or fiat necessary to execute the transaction.
Now lets understand,
What is USDT? or more prcisely - What Is Tether (USDT)?
Tether is a blockchain-based cryptocurrency whose cryptocoins in circulation are backed by an equivalent amount of traditional fiat currencies, like the dollar, the euro, or the Japanese yen, which are supposed to be held in a designated bank account. Tether tokens, the native tokens of the Tether network, trade under the USDT symbol.
What is USDT Arbitrage India?
It's basically an Arbitrage opportunity wherein you buy USDT cheaply on overseas exchanges like Binance, Bittrex, etc. The same USDT is usually selling at premium on the Indian crypto exchanges such as WazirX, CoinDCX, etc. So you transfer USDT to your Indian bitcoin exchange wallet. Once USDT becomes available in your Indian bitcoin exchange wallet, you sell it at a premium on the Indian crypto exchange via P2P. This whole process is known as USDT Arbitrage India.
Step by Step USDT Arbitrage India process:
Step 1. Transfer INR via wire transfer to Binance
Step 2. Buy USDT on Binance
Step 3. USDT selling at premium on the other exchange
Step 4. Transfer USDT to your other exchange wallet
Step 5. Sell it at a premium on the other exchange
What is USDT Arbitrage in India via OTC?
Now you have understood what is OTC? How OTC Trading Works? What is USDT? And how USDT Arbitrage India works? Its time to discuss What is USDT Arbitrage India via OTC? Its basically executing huge volumes of USDT trades on overseas exchange and Indian exchange via private placement. You can lower your trading costs and exchange fees by going this route. Also when you sell it at a premium on the Indian crypto exchange via P2P, you can ask the counterparty to disclose their identity thereby reducing your risks.
Caution before embarking on USDT Arbitrage India
As it is well known that USDT is being sold at high premiums on cryptocurrency exchanges in India. The key question one needs to ask is why USDT is overpriced in India when this arbitrage technique is so well known by the seasoned crypto traders who are exploiting this opportunity. USDT being a stablecoin shouldn’t register this much volatility so frequently. A stablecoin is used as an alternative investment in the crypto markets as a hedge against the highly volatile nature of cryptocurrencies.
It is being told INCORRECTLY / FALSELY that USDT/INR pair is overpriced in India due to low depth order books (implying low liquidity on spot exchanges and with an absence of efficient market markers). This is absolute nonsense.
While the purpose of this article is not to seek answer about why USDT is overpriced in India, one needs to aware of many facets of cryptocurrency trading and blockchain in general to fully comtemplate it. As general public, seek proper CA's advice before you proceed with this. We at CA Mitesh and Associates, provide in-depth consultation on USDT Arbitrage and other opportunities in cryptocurrencies. Please note the all consultations with the CA are Paid consultations.