Crypto Market Slippage Widens as Liquidity Dwindles
CryptoNewsTerminal Staff12 Aug, 2024
Crypto Market Slippage Widens as Liquidity Dwindles
As the crypto market continues to navigate the challenges of fragmented liquidity, new research from Kaiko, a crypto research firm, sheds light on a troubling trend: widening slippage on market orders. According to Kaiko's analysis, slippage on $100k BTC market orders increased across most centralized exchanges during the recent "Black Monday" plunge. This indicates a decrease in available market liquidity, further exacerbating market volatility. The report highlights the persistent disparities in asset pricing across exchanges, especially pronounced on those with limited liquidity. For instance, the BTC/JPY trading pair on Zaif experienced the most significant slippage, while KuCoin's BTC/EUR pair required over 5% slippage to execute a $100k market order. Notably, the launch of the Bitcoin spot ETF in the U.S. has heightened the risk of liquidity fragmentation, potentially contributing to increased BTC price volatility during weekends.
