A type of trading where buyers and sellers deal directly with one another instead of buying from or selling to an exchange or liquidity pool.
With respect to trading among users, P2P trading involves direct transaction between a buyer and a seller. The buyer buys from the seller at the seller's specified price and receives crypto in return. P2P trading can occur in person, on social media, or on an exchange. P2P trades that involve a large quantity of cryptocurrency are also known as over-the-counter (OTC) trades. The buyer or seller in a P2P trade can be an individual, group, exchange or even a government.
P2P trading was very popular in the earliest days of cryptocurrencies and remains a mainstay of the industry. However, this type of trading leaves room for scams because it's based on trust in strangers, which can turn out to be misplaced. Thus, when P2P trading takes place on exchanges, the exchange typically serves as an escrow, keeping the seller's crypto and releasing it to the buyer once the seller has confirmed receipt of payment.
On most reputable platforms, P2P trading involves a buyer or seller exchanging bitcoin, ether or USD stablecoin for fiat or vice versa.