[tracer1]

Generally OTC desks are useful for large purchases. Let's say you want to acquire $100 million in Bitcoin - you could go to Coinbase and just do it, but you'd drastically move the market, have a really obvious candlestick, and an observant third party could look for large movements from Coinbase and potentially track your holdings / de-anonymize you.

An OTC desk can be setup to spread the buy over several days / months, buy across markets, and optimize for best price execution. It's not necessarily a huge business, but a lot of businesses and high net worth individuals will use these types of services instead of trying to learn the skills themselves.

[onlyrealcuzzo]

How many high net worth individuals can their possibly be in New Zealand?

It's a country of 5M. High Net Worth is usually top 0.1% (100M+) - that's like 2k families.

Or would foreigners use this service for some reason?

[sitkack]

Many billionaires have their prepper mansion in NZ.

[bogomipz]

Do most exchanges also run OTC desks or is the OTC desk generally a special type of exchange?

[argonaut]

It can be a service offered by an exchange or by another company. Coinbase and Binance have OTC desks, for example.

[bitcharmer]

Not exchanges. The reason is that, as GP indicated - oftentimes execution is spread across venues.

This is typically a role of a dedicated broker house or there is a special area in many investment banks that takes care of that as part of customer flow handling.

[smabie]

Usually OTC desks are seperate and are part of a prop trading firm.