06-21-2023, 04:18 AM
BTC Liquidity Halves from Peak before FTX Collapse amid Crypto Crackdown
<p class="MsoNormal">Total
liquidity for pioneer cryptocurrency Bitcoin (BTC) fell dramatically by 53.4%
from a peak last seen before <a href="https://www.financemagnates.com/cryptocurrency/ftx-the-rise-the-fall-and-the-reaction/" target="_blank" rel="follow">the collapse</a> of Bahamas-based digital asset
exchange FTX on October 25th last year. Compared to the start of 2023,
<a href="https://www.financemagnates.com/terms/l/liquidity/" class="terms__main-term" id="47c3bef3-27ee-4953-8504-159e1b829b33">liquidity</a> for the native currency of the <a href="https://www.financemagnates.com/terms/b/bitcoin/" class="terms__secondary-term" id="261088a9-0f41-4202-a73c-31f75ba6bd93">Bitcoin</a> blockchain slumped 40.8%.</p><p class="MsoNormal">Crypto Crackdown Hits BTC</p><p class="MsoNormal">The figures are based on <a href="https://assets-global.website-files.com/63e3774c88285e5c6cbf3b9d/648c2892635c27786315d665_The%20SEC%20Effect-Liquidity%20And%20Derivatives%20Insights.pdf" target="_blank" rel="follow">a new report</a> by digital assets data provider, CCData, previously known as CryptoCompare.
The firm, which is also a UK-registered benchmark, said it analyzed 14
cryptocurrency exchanges for the report. </p><p class="MsoNormal">According
to CCData, the recent ramp-up in regulatory scrutiny against cryptocurrency
exchanges, particularly in the United States, has had a significant impact on
liquidity across various markets, including the cryptocurrency market. This
impact was worsened by the exit of market makers from the jurisdiction, it added.</p><p class="MsoNormal">Earlier
this month, the US Securities and Exchange Commission <a href="https://www.financemagnates.com/cryptocurrency/sec-charges-binance-ceo-over-illegal-exchanges-commingling-of-client-fund/" target="_blank" rel="follow">sued Binance</a>, the world’s
largest
cryptocurrency exchange by trading volume, accusing the firm and its CEO, Changpeng
Zhao of operating an illegal trading platform, offering unregistered securities
and misusing client funds, among other allegations. The securities watchdog
followed this up by <a href="https://www.financemagnates.com/cryptocurrency/after-binance-sec-sues-coinbase-over-illegal-operation-of-crypto-exchange/" target="_blank" rel="follow">hitting Coinbase</a>, the biggest crypto exchange in
the United States, alleging that it was offering unregistered securities on an
unauthorized trading platform. </p><p class="MsoNormal">In recent
months, the regulator <a href="https://www.financemagnates.com/cryptocurrency/bankrupt-bittrex-to-begin-customer-payouts-despite-us-objections/" target="_blank" rel="follow">filed
a complaint</a> against the cryptocurrency exchange, Bittrex for allegedly operating without
registration and <a href="https://www.financemagnates.com/cryptocurrency/kraken-shuts-staking-as-a-service-in-us-amid-30m-sec-settlement/" target="_blank" rel="follow">forced Kraken to shut
down</a> its
staking-as-a-service programme. Additionally, it charged the crypto exchange, Gemini
and Genesis, a crypto lender, for <a href="https://www.financemagnates.com/cryptocurrency/sec-takes-gemini-genesis-to-court-for-selling-unregistered-securities/" target="_blank" rel="follow">allegedly offering
unregistered securities</a>.</p><p class="MsoNormal">Largest BTC
Liquidations since FTX Collapse</p><p class="MsoNormal">According
to CCData, regulatory scrutiny in recent months and other ‘macroeconomic pressures’ are
possibly responsible for shrinking liquidity in the US crypto market. The firm noted
that 1% market
depth, or the ability of a crypto exchange to absorb a trade that is equal to
1% of its total trading volume, has declined significantly among US digital
asset exchanges since November. The depth for bitcoin shrank from
1500 BTC to 400 BTC, it added.</p><p class="MsoNormal">“The impact
differs among exchanges: OkCoin, Bittrex, Cexio, and BinanceUS have faced
significant liquidity declines of 97.6%, 99.2%, 70.6%, and 78.4% YTD,
respectively, with Bittrex and Binance.US encountering SEC actions,” the CCData explained.</p><p class="MsoNormal">Furthermore, the SEC’s
charges against Binance announced on June 5 “set off a major wave of BTC-long
liquidations at a scale which hasn’t been seen since the collapse of FTX,” the digital asset data provider noted. Within an hour of the
announcement, aggregate open interest, or the total number of outstanding BTC futures or
options contracts that have not been settled, dropped by 4.51%.</p><p class="MsoNormal">“The
announcement caught bullish traders by surprise, <a href="https://www.financemagnates.com/cryptocurrency/coinbase-shares-plunges-after-sec-lawsuit/" target="_blank" rel="follow">particularly
affecting altcoins</a>, such as Cardano and Solana, which were specifically
mentioned in the lawsuit and are now considered securities by the SEC,” CCData
elaborated. “These tokens experienced the most substantial declines.”</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
https://www.financemagnates.com//cryptoc...crackdown/
<p class="MsoNormal">Total
liquidity for pioneer cryptocurrency Bitcoin (BTC) fell dramatically by 53.4%
from a peak last seen before <a href="https://www.financemagnates.com/cryptocurrency/ftx-the-rise-the-fall-and-the-reaction/" target="_blank" rel="follow">the collapse</a> of Bahamas-based digital asset
exchange FTX on October 25th last year. Compared to the start of 2023,
<a href="https://www.financemagnates.com/terms/l/liquidity/" class="terms__main-term" id="47c3bef3-27ee-4953-8504-159e1b829b33">liquidity</a> for the native currency of the <a href="https://www.financemagnates.com/terms/b/bitcoin/" class="terms__secondary-term" id="261088a9-0f41-4202-a73c-31f75ba6bd93">Bitcoin</a> blockchain slumped 40.8%.</p><p class="MsoNormal">Crypto Crackdown Hits BTC</p><p class="MsoNormal">The figures are based on <a href="https://assets-global.website-files.com/63e3774c88285e5c6cbf3b9d/648c2892635c27786315d665_The%20SEC%20Effect-Liquidity%20And%20Derivatives%20Insights.pdf" target="_blank" rel="follow">a new report</a> by digital assets data provider, CCData, previously known as CryptoCompare.
The firm, which is also a UK-registered benchmark, said it analyzed 14
cryptocurrency exchanges for the report. </p><p class="MsoNormal">According
to CCData, the recent ramp-up in regulatory scrutiny against cryptocurrency
exchanges, particularly in the United States, has had a significant impact on
liquidity across various markets, including the cryptocurrency market. This
impact was worsened by the exit of market makers from the jurisdiction, it added.</p><p class="MsoNormal">Earlier
this month, the US Securities and Exchange Commission <a href="https://www.financemagnates.com/cryptocurrency/sec-charges-binance-ceo-over-illegal-exchanges-commingling-of-client-fund/" target="_blank" rel="follow">sued Binance</a>, the world’s
largest
cryptocurrency exchange by trading volume, accusing the firm and its CEO, Changpeng
Zhao of operating an illegal trading platform, offering unregistered securities
and misusing client funds, among other allegations. The securities watchdog
followed this up by <a href="https://www.financemagnates.com/cryptocurrency/after-binance-sec-sues-coinbase-over-illegal-operation-of-crypto-exchange/" target="_blank" rel="follow">hitting Coinbase</a>, the biggest crypto exchange in
the United States, alleging that it was offering unregistered securities on an
unauthorized trading platform. </p><p class="MsoNormal">In recent
months, the regulator <a href="https://www.financemagnates.com/cryptocurrency/bankrupt-bittrex-to-begin-customer-payouts-despite-us-objections/" target="_blank" rel="follow">filed
a complaint</a> against the cryptocurrency exchange, Bittrex for allegedly operating without
registration and <a href="https://www.financemagnates.com/cryptocurrency/kraken-shuts-staking-as-a-service-in-us-amid-30m-sec-settlement/" target="_blank" rel="follow">forced Kraken to shut
down</a> its
staking-as-a-service programme. Additionally, it charged the crypto exchange, Gemini
and Genesis, a crypto lender, for <a href="https://www.financemagnates.com/cryptocurrency/sec-takes-gemini-genesis-to-court-for-selling-unregistered-securities/" target="_blank" rel="follow">allegedly offering
unregistered securities</a>.</p><p class="MsoNormal">Largest BTC
Liquidations since FTX Collapse</p><p class="MsoNormal">According
to CCData, regulatory scrutiny in recent months and other ‘macroeconomic pressures’ are
possibly responsible for shrinking liquidity in the US crypto market. The firm noted
that 1% market
depth, or the ability of a crypto exchange to absorb a trade that is equal to
1% of its total trading volume, has declined significantly among US digital
asset exchanges since November. The depth for bitcoin shrank from
1500 BTC to 400 BTC, it added.</p><p class="MsoNormal">“The impact
differs among exchanges: OkCoin, Bittrex, Cexio, and BinanceUS have faced
significant liquidity declines of 97.6%, 99.2%, 70.6%, and 78.4% YTD,
respectively, with Bittrex and Binance.US encountering SEC actions,” the CCData explained.</p><p class="MsoNormal">Furthermore, the SEC’s
charges against Binance announced on June 5 “set off a major wave of BTC-long
liquidations at a scale which hasn’t been seen since the collapse of FTX,” the digital asset data provider noted. Within an hour of the
announcement, aggregate open interest, or the total number of outstanding BTC futures or
options contracts that have not been settled, dropped by 4.51%.</p><p class="MsoNormal">“The
announcement caught bullish traders by surprise, <a href="https://www.financemagnates.com/cryptocurrency/coinbase-shares-plunges-after-sec-lawsuit/" target="_blank" rel="follow">particularly
affecting altcoins</a>, such as Cardano and Solana, which were specifically
mentioned in the lawsuit and are now considered securities by the SEC,” CCData
elaborated. “These tokens experienced the most substantial declines.”</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
https://www.financemagnates.com//cryptoc...crackdown/