OTC security refers to assets bought and sold directly between parties, bypassing traditional exchanges. This approach allows for larger transactions without influencing the market price. In the cryptocurrency market, OTC trading is often used by institutional investors or high-net-worth individuals looking to buy or sell significant amounts of a digital asset. By using OTC desks, these investors can get better prices and execute trades more discreetly. OTC trading can offer benefits like reducing slippage, which occurs when a large order affects the market price. Additionally, it enhances privacy, as transactions are not publicly recorded on an exchange. However, OTC transactions may involve higher risks, such as counterparty risk, where one party may not fulfill their end of the deal. It’s essential for participants to ensure they are dealing with reputable brokers and platforms to mitigate these risks.