For cryptocurrency to ensure a seamless transition into a larger presence within the traditional financial trading world, it needs to provide simple, seamless movement between fiat and blockchain financial models. As the extreme newcomer to finance, it is up to blockchain services to enable this kind of money management interactivity for investors who participate in both types of investments. This is especially important given the recent growth of cryptocurrency’s market cap over the past 1.5 years, and the risks inherent to so much money flooding the market so quickly. Luckily, one of the blockchain’s most valuable features is its decentralized nature, and with so many projects flooding the market and poised to meet industry needs, solutions are either available or coming soon.
OTC transactions
OTC trading, a service available to high volume traders, is a safe option for the people who stand to wreak the most havoc on the market. Not only does it reduce the possibility of theft, hacking, and other financially traumatic risks that are an inherent part of traditional trading exchanges, it also protects the market from slippage. OTC trading happens through chatrooms or large transaction brokers or using Bitcoin ATMs.
However, the use of third-party middlemen flies in the face of blockchain technology’s original premise – a secure, and more importantly, decentralized currency option. Instead, OTC trading is middleman-dependent.
With the proliferation of blockchain based projects, especially those centered around smart contract support services, it stands to reason that there should be a better way to manage crypto exit strategies sans third-party intermediaries. Turns out, there are several.
Industry newcomer JUR is building a platform that specializes in smart legal agreements that are clear, simple, and easily enforceable. Using their blockchain based smart contract system, with notarizing, escrow services, transactional capability, and built-in game theory arbitration, JUR is poised to change the face of OTC transactions.
JUR is currently focused on technology development and industry level marketing but has a strategic plan that encompasses a wide variety of OTC needs within cryptocurrency trading.
Within their whitepaper, JUR outlines examples of OTC safeguards that are built into their arbitration systems, such as intangible service contracts, custom designed legal agreements, and precautions against whale attacks.
Another OTC contract option is a smart contract management support project Agrello. With a distinct specialized financial services division, Agrello offers digital identity and signature services. Also available within the Agrello blockchain are contract execution automation, deadline and tracking capability, and payment services.
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Mattereum also offers self-executing smart contract services that support OTC digital asset trading.
Crypto exit strategies
Another facet of traditional investors entering cryptocurrency trading in larger numbers that offer significant room for improvement is exit strategy management and support. Traditional limit trading orders, such as Stop-Loss Day, GTC, or Trailing Stop Orders, or Take-Profit Orders, are difficult to maintain within the cryptocurrency space. And again, they require third-party involvement at a level that is not in alignment with traditional blockchain methodology.
However, the absence of a well-designed exit plan is a recipe for disaster, regardless of cryptocurrency market trends and trading strategies. In order to ensure profitability and minimize losses, it is important to implement one.
This is traditionally done through traders, but smart contracts becoming more of an option due to companies like Mattereum, who support the quick and safe execution of contractual records through smart contract and independent arbitration services.
Arbitration
Arbitration remains the key to successfully replacing third-party trading intermediaries with smart contract functionality. Due to expectations of lengthy, pricey legal battles, a standard created by the fiat trading world, cryptocurrency trading can look like an unnecessary risk to many. It is some platform traditional financial professionals do not understand well. In fact, even blockchain subject matter experts struggle to keep pace with the evolution of blockchain functionality.
Several blockchain based arbitration options exist for purposes such as these.
- Jury Online offers escrow account services, including milestone payments, and automated transaction conclusion abilities, with blockchain and fintech arbiters available for dispute resolution. This is a faster option than the court system.
- JUR, which offers the OTC trading alternatives we already discussed, is also a game theory-based dispute resolution platform. Currently, in their business and technological development phase, JUR will provide a more comprehensive platform for full-service smart contract and arbitration needs.
As traditional investors, including institutional investors, funds, and individual parties continue to pour money into the cryptocurrency market, there is a need for a strong trading support base. Why waste time and energy utilizing traditional trading methodologies when blockchain technology is being developed to provide faster, more economical, and secure alternatives?
