USDT Arbitrage India via OTC?
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?
Table of Contents
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.
Also read - Curious Case of Premium in USDT Price in India. 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.
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 precisely - What Is Tether (USDT)?
USDT stands for Tether, and it is a type of cryptocurrency that is also known as a stablecoin. USDT is designed to maintain a stable value, but instead of being pegged to the U.S. dollar, it is pegged to the value of one United States dollar.
USDT was launched in 2014 and is managed by a company called Tether Limited. The goal of USDT is to provide a digital token that represents a fiat currency (in this case, the U.S. dollar) and offers stability within the volatile cryptocurrency market.
The value of USDT is maintained through a mechanism known as "backing," where Tether Limited claims to hold an equivalent amount of U.S. dollars in reserves for each USDT token in circulation. This backing is meant to ensure that the value of USDT remains close to that of the U.S. dollar.
USDT is built on various blockchain networks, including Ethereum, Bitcoin, Tron, and others. It utilizes the technology of these networks to enable fast, secure, and transparent transactions. USDT can be transferred between wallets, used for trading on cryptocurrency exchanges, or employed in decentralized applications (DApps) and decentralized finance (DeFi) platforms.
It's important to note that while USDT aims to maintain a 1:1 ratio with the U.S. dollar, its backing and transparency have been subject to scrutiny and controversy. The company behind USDT has faced criticism regarding its claims of full reserves, audits, and financial transparency.
Also read - Curious Case of Premium in USDT Price in India. 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.
What is USDC?
USDC stands for USD Coin. Similiar to USDT, It is a type of cryptocurrency that is known as a stablecoin, meaning its value is designed to remain stable and pegged to a specific asset—in this case, the U.S. dollar. Each USDC token is intended to represent one U.S. dollar, so it maintains a 1:1 ratio with the value of the dollar.
USDC was launched by a consortium known as the Centre, which is a collaboration between Circle, a financial technology company, and Coinbase, a cryptocurrency exchange. USDC was first introduced in September 2018 and has gained significant popularity since then.
The primary purpose of USDC is to provide stability and a reliable digital representation of the U.S. dollar within the cryptocurrency ecosystem. It enables users to transact and store value in the form of a digital currency while minimizing exposure to price volatility commonly associated with other cryptocurrencies like Bitcoin or Ethereum.
USDC operates on blockchain networks, such as Ethereum, Algorand, and Solana, which means it utilizes the underlying technology of these networks to facilitate transactions. These transactions are generally fast, secure, and transparent due to the blockchain's distributed ledger system.
As with any cryptocurrency, USDC can be used for various purposes, including trading, remittances, decentralized finance (DeFi) applications, and as a stable store of value in volatile markets.
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.
Also read - Curious Case of Premium in USDT Price in India. 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.
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 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).
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 contemplate 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.
DISCLAIMER
The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that we are not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. CA Mitesh and Associates is India's leading Cryptocurrency Taxation Firm which is committed to helping people navigate complex tax laws and banking regulations. Our main aim is to assist the individuals with applicable laws & regulations compliance and providing support at each & every level to make sure that they stay compliant and grow continuously. For any query, help or feedback you may get in touch here - Appointment with CA. Please note the all consultations with the CA are Paid consultations. Financial Year 2023.
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