Report: FTX and Alameda collapses lead to massive drop in trading liquidity in crypto markets

2022/11/15 03:31

According to Coindesk, last week’s collapse of Sam Bankman-Fried’s trading firm, Alameda Research, has left such a big hole in cryptocurrency markets that trading liquidity has thinned noticeably, according to a new report from Kaiko. The drop in liquidity over the past week is far larger than in any previous market drawdown, and it could be “here to stay” in the short term, according to Kaiko – especially since other trading firms including Amber Group and Genesis Trading have reported funds being trapped on FTX. Since Nov. 5, bitcoin liquidity within 2% of the mid-price has fallen from 11,800 BTC to 7,000 BTC, the lowest since early June, according to Kaiko, which analyzed data from 18 crypto exchanges. Kraken’s bitcoin (BTC) market depth has fallen by 57%, Bitstamp’s by 32%, Binance’s by 25%, and Coinbase’s by 18%, according to the report. Kaiko said liquidity in altcoins might be “more concerning,” especially those that were significant holdings of Alameda, such as Solana’s SOL. SOL’s total market depth has fallen 50% from 1 million SOL to under 500,000 SOL aggregated across all order books, according to Kaiko. Solan's SRM and MAPS tokens have also seen a plunge in depth, the report noted.

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