Buy 100 BTC: The Difference Between Whale-Focused Services and Online Exchanges.
Bestchange lists 168 online exchangers with a deal size from 0.02 to 2 BTC. For such services, the number of customers matters: they earn $100 on 100 trades with a $1 commission.
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Offline exchanges target large investors. The minimum trade size in such services ranges from 0.5 BTC to 50 BTC. Because of this, offline exchanges earn the same $100 from a single deal.
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The cryptocurrency offline exchange VIP|BTC explains how services with a minimum of 0.1 and 1 BTC differ and why whales prefer to exchange crypto offline.
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Who compares the exchanges: a quick profile of the storyteller
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From 2015 to 2017 one of VIP|BTC’s employees worked at a major online exchange. The minimum deal size at the service was $5000, and the maximum — $100 000.
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Alexey (name changed) processed client requests: explained the terms of the deal, accepted money and sent the cryptocurrency. He also adjusted exchange rates depending on market conditions.
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Clients of the service often asked to exchange cryptocurrency for cash. The exchange’s management launched such a service in several cities, but online trading remained the service’s priority.
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Alexey organized offline deals in the Moscow office for several months, and then moved to the whale-focused exchange VIP|BTC.
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Why whales trade crypto offline
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The most important difference between online and offline exchanges is the maximum transaction amount. Typically, online exchanges allow purchases up to 0.5 BTC. Without such limits, large clients could deplete the reserves across the exchange’s directions in a few trades.
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Offline exchanges can handle from 50 BTC. There are three reasons for this:
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- large reserves. Offline exchanges target whales and reserve corresponding amounts. From these funds they buy more cryptocurrency and fiat for large trades;
- fewer trading channels. Online exchanges spread fiat money between banks and payment systems. To support 300 channels, such exchanges reserve about $4,000 in equivalent for each cryptocurrency. Offline exchanges do not scatter funds between dozens of accounts: they have 5–7 trading channels with a reserve of $1 million;
- time to prepare the deal. Offline exchanges schedule deals within several hours or even days. In that time you can buy more cryptocurrency or bring fiat from another office. Online exchanges do not have this capability: customers want to complete the deal within an hour.
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Online services limit the maximum exchange amounts not only due to lack of reserves. They work with banks that set transfer limits and freeze accounts.
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With cash payments these problems do not arise: you need to bring or pick up the money from the office.
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What else differentiates offline and online exchange
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Almost all online exchangers operate in automatic mode: a dedicated program tracks account balances, links new deposits to current requests and executes the money transfers on them.
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In offline exchanges everything is kept by people:
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- operators process incoming requests, determine the client’s tasks and agree on the deal date;
- manager meets the client and conducts the deal. Clients prefer in-office exchanges for the interaction: you can discuss the terms, ask about additional services, or simply relax;
- cash-in-transit staff move funds between branches and accompany clients with money;
- couriers deliver money to the client’s home upon request.
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Offline exchanges conduct 10–20 operations per day and can devote more time to clients.
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“We have no strict requirements for staff, and training on the script takes two weeks. But at the same time, employees must work as a team, learn the client’s tasks and resolve them promptly,” says the founder of VIP|BTC.
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Individual approach allows offline exchanges to better address client needs. Online exchanges target the mass user and often differ only by logo. Their advantages — fees and a large number of trading channels — do not attract whales who trade from 0.5 BTC.
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What offline exchanges offer besides the deal size
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Clients with deal sizes from $5,000 pay attention to service level, professional qualities of staff and the availability of additional services.
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Exchanges accommodate them: open branches in major cities, establish courier delivery, hire staff for security and escorting investors with large sums.
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VIP|BTC started with one office in Moscow. Now it offers clients the following services:
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- exchange in any city. The exchange opened 8 branches in 5 countries and added a courier delivery service for clients who cannot come to the office;
- secure offices. Deals take place in secure offices. In addition, security staff accompany clients with large sums of money to the office or home;
- large reserve. The exchange stores large amounts of cash and cryptocurrency. If they are insufficient for a deal, VIP|BTC purchases funds or brings them from neighboring branches.
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Offline exchanges monitor market conditions and implement additional services, such as delivering cash to the doorstep.
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“We listen carefully to clients and identify small details that improve the quality of the deal. Before the pandemic we offered clients a resting place in the office and a cup of coffee. But during the lockdown, clients were reluctant to travel to the office. We expanded the courier staff and now deliver money literally to the doorstep,” notes the founder of VIP|BTC.
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Many offline exchanges embed the cost of additional services such as delivery or cash-in-transit into the commission. As a result, the client receives better service for the same money.
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Conclusions
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Trading cryptocurrency for cash may seem archaic, but this method is better suited to large investors and businesspeople.
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Online exchanges cannot offer whales personalized service and large trades. There is also the risk of asset blocks by banks and payment systems.
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Offline exchanges focus on quality rather than quantity. Such services take user preferences into account: open offices in major cities, establish courier delivery, employ staff for consultations and client security, and care about deal anonymity.
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