Bitcoin Order Books Are Most Liquid Since October as Market Depth Nears $540M

Order book liquidity indicates how easy it is to buy and sell large quantities at stable prices.

AccessTimeIconFeb 20, 2024 at 9:35 a.m. UTC
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  • Bitcoin order books are the most liquid since October, the 2% market depth indicates.
  • U.S.-based exchanges are leading the uptick in the global order book liquidity.

As predicted in December, the U.S.-based spot bitcoin (BTC) exchange-traded funds (ETFs) approved in January are impacting not only the cryptocurrency's price, but also order book liquidity, or the ability to trade at stable prices.

These effects are increasingly evident a month after the nearly a dozen ETFs began trading.

Early Tuesday, bitcoin's 2% market depth across 33 centralized exchanges, or the combined value of buy and sell orders within 2% of the market price, rose to $539 million. That's the highest since October and a roughly 30% increase since the spot ETFs hit the market on Jan. 11, according to data tracked by Paris-based Kaiko.

BTC: Aggregated 2% market depth (Kaiko)
BTC: Aggregated 2% market depth (Kaiko) (Kaiko)

The greater the market depth or liquidity, the easier it is to buy and sell large quantities without affecting prices, and the lesser the slippage, the difference between the prices at which trades are quoted and executed.

U.S.-based exchanges have led the rise in the global bitcoin market depth, according to Kaiko.

The share of the U.S.-based exchanges in the global 2% market depth has increased to 48% from 14.3% since spot ETF expectations gripped the market in October.

While the market depth has improved, it remains well below the levels in excess of $800 million observed before the collapse of Sam Bankman-Fried's crypto exchange FTX and its sister concern, Alameda Research, in November 2022.

The share of U.S. exchanges has improved sharply since October. (Kaiko)
The share of U.S. exchanges has improved sharply since October. (Kaiko) (Kaiko)

Edited by Sheldon Reback.


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Omkar Godbole

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

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