Cryptoverse: Buoyant bitcoin's losing its liquidity

economictimes.indiatimes.com:

bitcoin has been a surprise winner of the banking blowout. Yet investors aiming to amp up their bets face an ominous obstacle: a lack of liquidity that could trigger wild price swings. The price of the No.1 cryptocurrency has jumped 40% to around $27,700 since March 10, when the failure of Silicon Valley Bank (SVB) careered into mainstream markets. On the flip side, though, its liquidity is drying up. Bitcoin's market depth indicates the asset is at its lowest level of liquidity in 10 months, even lower than in the aftermath of the FTX collapse in November, according to data provider Kaiko. The market depth for the two leading trading pairs — bitcoin-dollar and bitcoin-tether — stands at 5,600 bitcoin, the equivalent of about $155 million, Kaiko said.

Did you Know?

SAP has launched a new enterprise on the Metaverse with the aim of accelerating cloud adoption among Indian firms. The interactive and immersive ‘cloud on wheels’ platform will enable customers to experience the full range of SAP’s offerings and reimagine processes for improved business outcomes.

«As a market maker we try to provide liquidity where we can but we're facing a difficult situation,» said Kevin de Patoul, CEO of Keyrock. «There is a big network effect here. In the short term at least, liquidity will remain a challenge.» Slippage, a liquidity measure describing how much prices change between the placement and execution of a trade, has also increased. Slippage for buying bitcoin with U.S. dollars on the Coinbase exchange is 2.5 times higher than it was at the start of March, said Conor Ryder, research analyst at Kaiko. The slippage for a simulated $100,000 sell order has doubled in the past month, meaning the average price you get for