Crypto Market Liquidity Exhausted After Alameda and FTX Crash

- Advertisement -

Crypto Market Liquidity Exhausted After Alameda and FTX Crash

According to Kaiko, the aftermath of the collapse of FTX has left a large liquidity hole.

According to data provider Kaiko, the crypto market has experienced a liquidity crunch following the collapse of crypto exchange FTX and investment fund Alameda Research.

- Advertisement -

Both companies were founded by former billionaires Sam Bankman Fried.

Sam, FTX, and Alameda are all extremely important names in the cryptocurrency market. Because they not only own a large crypto asset but also cooperate with many other crypto companies.

Since FTX filed for bankruptcy protection earlier this month, hundreds of companies have said they have a lot of money stuck on FTX.

According to Kaiko, the aftermath of the collapse of FTX has left a large liquidity hole.

Kaiko said:

“Cryptocurrency liquidity is dominated by only a handful of commercial companies, including Wintermute, Amber Group, B2C2, Genesis, Cumberland, and the now-defunct hedge fund (Alameda).

With the loss of one of the biggest market makers, we can expect a significant drop in liquidity, which we will call the 'Alameda gap'.

Kaiko says that 'bitcoin market depth' - which refers to the market's ability to absorb large orders over a specific period of time - has seen a "huge" drop, with the order book (order book) of Creak down 57% while Binance , and Coinbase decrease by 25% and 18% respectively.

bitcoin market depth

Wintermute's Evgeny Gaevoy says that market makers are re-examining their 'exposure' to certain locations in the wake of the FTX crisis as a driving factor in liquidity exhaustion.

“This liquidity crunch can be explained by two factors,” says Wintermute's Gaevoy. “On the one hand, MMs have less access to BTC loans because most of the lenders are either being too cautious or completely dead. At the same time, MMs are looking to reduce their exposure to most centralized exchanges because of security concerns.”

5/5 - (1 votes)
- Advertisement -


Please enter your comment
Please enter your name here

This website uses Akismet to limit spam. Find out how your comments are approved.

Maybe you are interested

HOT: Cryptocurrency lending giant BlockFi files for bankruptcy

BlockFi is the latest name to follow in the footsteps of FTX declaring bankruptcy...BlockFi is the latest crypto lender to file...

SHIB trading volume up 83% as whales keep accumulating

SHIB burn rate increased by 4,497% in the last 24 hours. The crypto market is currently under selling pressure as the majority of...

Looking back at the market last week (November 21-November 11) with BTA: After FTX, Genesis faced bankruptcy rumors

After FTX, the cryptocurrency market in the past week continued to receive another bad news when there were many rumors...

Alameda withdraws $204 million from FTX US a few days before the exchange crash

Alameda Research reportedly withdrew the most funds from FTX US, days before the crypto exchange filed...

FTX faces criminal and civil investigation in Bahamas

The Minister of Justice revealed that there is an ongoing criminal and civil investigation into FTX.General...

Related posts

- Advertisement -