How to Liquidate Your Cryptocurrency Holdings Without Manipulating Exchange Prices

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As the year 2019 slowly draws to an end, there will be plenty of cryptocurrency investors looking to cash out some profits. Especially when holding large amounts of funds, that can become very problematic. Using an exchange is not the best course of action in this regard. A recent Reddit post confirms there are many ways to achieve this goal, depending on one’s preferences and patience. 

Exchanges are Useful for Small Amounts

Most cryptocurrency enthusiasts and traders will acknowledge putting large sell orders on an exchange is asking for trouble. It is not a convenient way of dumping one’s holdings, either for profit or otherwise. Any big bid in the order book – on either side – will cause market panic and potentially prevent users from cashing out their holdings accordingly. Not an ideal situation, especially for those looking to cash out hundreds of thousands of dollars in quick succession. 

For smaller amounts, however, this situation could be worthwhile in many different ways.  Cashing out smaller amounts – either in one go or multiple rounds is easily achievable through exchanges and centralized trading platforms. After all, most of the trading pairs have ample liquidity to absorb several million dollars worth of trading volume in quick succession. As such, altcoin traders will often look for an exchange to get out their profits. In that regard, it is a more than acceptable approach. 

OTC Trading for Bitcoin

Among the Reddit users, it appears there is a consensus as to how OTC trading desks should be considered when dealing with large amounts of cryptocurrency, especially Bitcoin. Most of these OTC trading service providers can help users in converting vast sums of assets into more traditional currency as they see fit. This model also applies to top altcoins, assuming they have ample liquidity to take advantage of. Not all altcoins are created equally in this regard. 

OTC desks are vastly superior to centralized exchanges for converting vast sums of money. It only requires dealing with one or two entities, compared to making dozens or hundreds of small orders. Although it may take a while to find a suitable party, it is still a more favorable way of dealing with this process.  There are numerous OTC trading desks to take advantage of, including those provided by some of the biggest exchanges on the market today. Kraken, Coinbase, and Binance are just some examples to check out.

Ending Price Manipulation

The biggest concern when users are liquidating vast sums of cryptocurrency is whether or not their actions will have a major price impact. Those who rely on exchanges will eventually trigger a market shift, sparking debates regarding potential price manipulation of currency X, Y, or Z. As such, it would be better if more traders decided to experiment with OTC desks rather than just dumping coins on traditional exchanges. For now, however, it seems unlikely that anything major will change in this regard. 

None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.