Trading Bitcoin on Binance Got Tougher During the ETF Rumor Frenzy: Kaiko

Several traders experienced 'slippage' as liquidity declined across major exchanges.

AccessTimeIconOct 17, 2023 at 5:34 a.m. UTC
Updated Oct 17, 2023 at 11:34 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Binance has long been the world's largest cryptocurrency exchange by trading volumes. Still, on Monday, traders looking to buy and sell bitcoin (BTC) quickly on Binance were at a relative disadvantage to their peers on Kraken and Coinbase (COIN), according to data tracked by Paris-based Kaiko.

The 0.1% ask depth on Binance, a measure of buy-side liquidity, crashed to just 1.2 BTC ($30,000) from 100 BTC as volatility exploded after a false report of BlackRock's (BLK) spot exchange-traded fund (ETF) approval circulated on social media. The leading cryptocurrency popped 7.5% to $30,000 in a knee-jerk reaction to the rumor, only to give up gains after BlackRock denied the report.

The 0.1% ask depth refers to the number of outstanding purchase orders within 0.1% of the mid-price or average of the bid and ask prices. Ask price is the price at which the seller is ready to sell and bid is the value at which the buyer is ready to purchase.

The higher the bid and ask depth, the easier it is to execute large buy and sell orders at stable prices and the lower the slippage – the difference between the expected price at which a trade is placed and the actual price at which the trade goes through.

The 0.1% depth also dipped as low as 2 BTC on OKX and Bybit, with the average ask across major exchanges falling below 95 BTC.

The broad-based decline in liquidity saw several market participants, including pseudonymous traders exitpump and Omz, lose money due to slippage. Some traders saw slippage as high as 20%.

Liquidity, as measured by the 0.1% market depth on major exchanges, crashed on major exchanges. (Kaiko)
Liquidity, as measured by the 0.1% market depth on major exchanges, crashed on major exchanges. (Kaiko) (Kaiko)

The chart shows Kraken and Coinbase outperformed Binance and other exchanges during the liquidity meltdown.

The sticky liquidity on the two exchanges likely reflects the relative sophistication of their market makers - entities tasked with creating liquidity in an order book, according to Carey.

Edited by Parikshit Mishra.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.