Bitcoin’s monumental performance in 2017, as well as the increasing coverage of digital coins in the mainstream media, have attracted traders of all shapes and sizes looking to break into the world of cryptocurrency. While many of them will simply be looking to buy small amounts of Bitcoin, there’s also a growing market of traders who want to buy large quantities of Bitcoin.
If you’ve got a big bank balance and think of yourself as something of a crypto “whale”, it’s important to be aware that the traditional method of buying digital currency through an exchange may not offer the best value for money.
Disclaimer:
This information should not be interpreted as an endorsement of cryptocurrency or any specific provider,
service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and
involve significant risks – they are highly volatile and sensitive to secondary activity. Performance
is unpredictable and past performance is no guarantee of future performance. Consider your own
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have holdings in the cryptocurrencies discussed.
What’s a “large” amount of Bitcoin?
Before going any further, it’s important to consider what actually constitutes a large amount of Bitcoin. Of course, the definition of “large” will be different for everyone. A sizable trade for you will vary depending on factors like your income, net wealth, experience with digital currency and overall level of risk tolerance.
However, for the purposes of this guide, we’re talking about individual trades worth anywhere north of $10,000 and potentially into hundreds of thousands or even millions of dollars.
Buying a large amount of Bitcoin: What are the options?
The two main options when buying a lot of Bitcoin are to either purchase through a traditional cryptocurrency exchange or to use an over-the-counter (OTC) exchange. Each type of platform has its pros and cons, so let’s take a closer look at which one might be right for you.
Large transactions on traditional cryptocurrency exchanges: pros and cons
Traditional exchanges offer a simple and straightforward way for their customers to buy Bitcoin and other crypto coins. These centralized platforms allow buyers and sellers to trade cryptocurrencies based on current market prices, with the exchange acting as an intermediary between the two parties. Examples of such exchanges include Binance, CoinSpot and Coinbase.
You register for an account, deposit fiat or cryptocurrency to your trading balance, and then place an order to buy your desired number of coins. All buy and sell offers are listed in a publicly available order book.
Pros
Easy to use. Traditional cryptocurrency exchanges are designed to make it simple and straightforward to buy coins and tokens. If you’re new to the world of cryptocurrency, they’re generally one of the easier ways to purchase coins and tokens.
Can often buy with fiat currency. While many platforms only offer crypto-to-crypto trading, some providers allow you to purchase Bitcoin (BTC) directly with fiat currency such as Canadian dollars (CAD). This can help a new user enter the marketplace and start trading.
Trade up to $100,000 per day. While transaction limits vary substantially between exchanges and can be based on your level of verification, some platforms will allow you to buy up to $50,000 or even $100,000 of Bitcoin per day.
Access to a wide range of coins and tokens. The list of supported currencies varies from one exchange to the next, but many platforms allow you to go beyond Bitcoin and trade an extensive selection of altcoins.
Cons
Transaction and withdrawal limits. Traditional exchanges have much lower transaction and withdrawal limits than OTC exchanges. For example, if you’re a new customer, you may be limited to a daily trading limit of $2,000 or $3,000. Furthermore, your options for withdrawing funds may be restricted or capped.
Raising transaction and withdrawal limits takes time. Many exchanges offer different transaction limits to their customers based on their level of verification, so you may need to provide additional personal details or proof of ID to raise your limit. Other platforms will only allow you to trade larger amounts once you’ve been a customer for a specified period of time or only if you’re a frequent trader.
Lack of liquidity. As cryptocurrency markets are still in their infancy and there are hundreds of exchanges to choose from, there may not be sufficient liquidity on your chosen platform to fulfill a large trade in one transaction. When this happens, your transaction will be split into several smaller trades and could lead to slippage.
Slippage. Slippage occurs when the market moves against you before your trade can be completed, resulting in the total cost of the transaction being more expensive than expected. It is often associated with large orders that take longer than usual to fill.
Risk of hacking and theft. Storing funds in an exchange wallet for any length of time exposes you to the risk of hacking and theft. There have been dozens of well-publicized examples of crypto exchanges falling victim to hacks, which is particularly worrying for anyone looking to spend a large amount.
Traditional exchanges compared
Which traditional cryptocurrency exchanges are well set up to support large trading amounts? Check out the brief reviews below for more details on the transaction and withdrawal limits that apply on a selection of popular exchanges, as well as the steps you’ll need to complete to access those limits. All figures quoted are accurate at the time of writing on 27 April 2018.
Binance
Binance is a crypto-only exchange that allows you to buy and sell dozens of digital currencies. While there’s no limit on the amount you can deposit into your Binance account, the standard 24-hour withdrawal limit on a basic account is 2 BTC. You can upgrade this to 100 BTC by providing your name, gender, nationality and proof of ID. If you’d like to upgrade to an even higher withdrawal limit, you can contact Binance support directly.
Coinbase
Coinbase is one of the best known exchanges operating out of America, having dealt in cryptocurrencies since 2011. It has now expanded its offerings to include OTC trading, which makes it an ideal candidate for buying large amounts of BTC. Coinbase accepts a wide range of fiat currencies and calculates unique purchase limits for each user, which you can increase by submitting photo ID.
Kraken
Founded in 2011, Kraken is a digital currency exchange designed to suit serious traders. Its deposit and withdrawal limits vary depending on the level of verification you achieve. It supports a range of fiat currencies like US dollars (USD), Canadian dollars (CAD), euros (EUR) and Japanese yen (JPY).
Account tier
Daily limits
Monthly limits
Requirements
Tier 0
N/A (deposits and withdrawals not available)
N/A (deposits and withdrawals not available)
Account signup
Tier 1
Deposit (fiat): $0
Deposit (crypto): No limit
Withdraw (fiat): $0
Withdraw (crypto): $2,500
Deposit (fiat): $0
Deposit (crypto): No limit
Withdraw (fiat): $0
Withdraw (crypto): $20,000
Full name
Date of birth
Country of residence
Phone number
Tier 2
Deposit (fiat): $2,000
Deposit (crypto): No limit
Withdraw (fiat): $2,000
Withdraw (crypto): $5,000
Deposit (fiat): $10,000
Deposit (crypto): No limit
Withdraw (fiat): $10,000
Withdraw (crypto): $50,000
Provide all Tier 1 information
Verify your address
Tier 3
Deposit (fiat): $25,000
Deposit (crypto): No limit
Withdraw (fiat): $25,000
Withdraw (crypto): $50,000
Deposit (fiat): $200,000
Deposit (crypto): No limit
Withdraw (fiat): $200,000
Withdraw (crypto): $200,000
Meet all tier 1 and tier 2 requirements
Government-issued ID
Proof of residence
ID confirmation photo
Tier 4
Deposit (fiat): $100,000
Deposit (crypto): No limit
Withdraw (fiat): $100,000
Withdraw (crypto): $100,000
Deposit (fiat): $500,000
Deposit (crypto): No limit
Withdraw (fiat): $500,000
Withdraw (crypto): $500,000
Contact Kraken support to request tier 4 limits
Huobi
Huobi is a crypto-to-crypto exchange platform that allows its users to trade more than 190 currency pairs. It imposes limits on the maximum amount you can buy and sell per transaction, and those limits vary depending on the currency pair you choose. For example, the following limits apply if trading ETH/BTC:
Maximum amount of limit order: 10,000
Maximum buy of market order: 1,000
Maximum sell of market order: 10,000
There’s also a currency-specific limit on the maximum amount you can withdraw on your account per transaction. If your account is verified, you can withdraw a maximum of 200 BTC, 2,000 ETH or 5,000 LTC.
Large transactions on OTC exchanges: pros and cons
OTC trading refers to any cryptocurrency trading that takes place away from conventional crypto exchanges. While trades can be arranged peer-to-peer using online chat rooms like #Bitcoin-otc, recent years have seen the emergence of an increasing number of OTC brokers. These brokers specialize in helping large-volume traders buy and sell substantial amounts of cryptocurrency and avoiding slippage.
Pros
Better value for money. OTC brokers can offer a higher level of liquidity than conventional exchanges, which means that they can help you access one single price for a buy order. This removes the risk of slippage and means a lower total transaction cost.
Higher limits. OTC brokers specialize in high-volume trades and therefore allow you to avoid the lower transaction limits imposed on conventional exchanges. Most conventional exchanges won’t allow you to place trades worth more than $50,000 or perhaps $100,000, but OTC brokers can help facilitate these types of big trades.
Faster trading. If there’s insufficient liquidity on a conventional exchange, large orders can take days to be filled. OTC trading ensures that transactions can be completed faster.
Deal with a trusted broker. If you’re a little uneasy about putting your trust in a cryptocurrency exchange to safely manage your funds, you may feel more comfortable dealing with a reputable OTC broker.
Suitable for ICO projects. If you’ve just completed an ICO and you need to convert the cryptocurrency raised during the crowdsale into fiat currency, OTC brokers can offer a cost-effective solution.
Cons
Not as transparent. Traditional exchanges make their order books publicly available for everyone to see, but there’s no such transparency in OTC trading. You’ll need to rely on your broker to carefully vet the other party before agreeing to a trade.
Lack of regulation. You’ll need to accept the increased risk that comes with minimal regulation surrounding some avenues of OTC trading.
Limits may be a little too high for some. Some OTC brokers impose a minimum transaction limit of $50,000 or more, which may be a little outside your budget.
Can’t actively trade price movements. If you want to be able to place quick trades to take advantage of small price movements of Bitcoin or other digital currencies, it’s much more viable to do this on a conventional exchange.
OTC platforms compared
There’s been a recent upsurge in the number of OTC cryptocurrency brokers in recent times, but you’ll need to make sure you’ll be able to exceed their minimum transaction limits before you sign up. Let’s take a look at the limits of a few popular OTC services below.
itBit
Launched in 2013 and based in New York, itBit has access to a network of clients in more than 100 countries. Its OTC trading desk specializes in handling crypto purchases of 25 BTC or more.
Cumberland Mining
A subsidiary of principal trading firm DRW, Cumberland is an OTC trader and liquidity provider that primarily trades Bitcoin, Ether, Zcash, Bitcoin Cash, Ethereum Classic and Monero, but also trades other digital currencies. Markets can be priced in USD or BTC, and the minimum trade size is $100,000.
Genesis Global Trading
Based in New York, Genesis Global Trading offers OTC digital currency trading for institutional buyers and sellers. A minimum limit of $75,000 per transaction applies.
Read our guide on OTC trading and get a quote
How do I choose a platform?
There’s no “one size fits all” answer to this question, so consider your unique trading needs before choosing a platform to buy a large amount of Bitcoin. Ask yourself the following questions:
How much cryptocurrency do I want to buy?
How important is getting the best value for money?
Do I just want to buy Bitcoin or do I want to buy other cryptocurrencies as well?
Do I want to buy using fiat or cryptocurrency?
Is the platform registered? Is it reputable?
By thoroughly researching any exchange or broker you’re considering using, including taking a closer look at the fees or commissions charged, you’ll be in a good position to decide on the best way to purchase a large amount of BTC or other cryptocurrency.
Images: Shutterstock
At the time of writing, the author holds IOTA and XLM.
Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
Finding the right way to sell Bitcoin is just as important as finding the right option to buy it. In this guide, we break down the options available and the factors to consider.
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