Liquidity in cryptom markets lags behind traditional financing due to fragmentation, technical design differences and exposure to external shocks, according to a New report From S&P Global.
The study analyzed important liquidity statistics, volume, bid-axle spreads, market depth and slip, about centralized and decentralized trading locations for Bitcoin (BTC), Ethereum (ETH) and large stabilecoins.
The report showed that crypto -trading platforms become more efficient, but remain broken over hundreds of markets, with liquidity profiles ranging from exchange, assetman and commercial size.
Spothandelsvolumes on exchanges such as Binance are still inadequate traditional locations such as the NYSE, and Fiat-based trading couples consistently show shallower order books compared to crypto-later couples.
CEX vs. Dex
Centralized fairs (CEXS) reflect traditional stock markets in their dependence on order books and storage accounts. They offer high speed and low spreads on popular stablecoin pairs, especially coins with large caps such as Bitcoin.
Decentralized exchanges (DEXs), on the other hand, enable users to maintain custody through automated market makers (AMMs), but introduce price decrease and perishable loss, especially during volatile periods or large transactions.
Despite these challenges, some digital assets, in particular BTC, ETH and USDT, show similar or even narrower bid-axle spreads than mid-cap shares such as Broadcom.
In general, CEXs continue to dominate the volume in the market and offer higher liquidity compared to their decentralized counterparts, who offer deeper access.
The report also noted that the launch of Bitcoin and Ether ETFs in the US has increased trading activity and has deepened the liquidity on crypto exchanges, although ETF -Handelsvolumes remain smaller than their underlying assets.
Infrastructure restrictions
S&P also emphasized how political instability and exchange shacks can significantly influence localized liquidity, a common problem in the crypto industry.
A political crisis in South Korea led to a reduction of 30% in BTC-KRW prices on Upbit in December 2024, while an infringement at Bybit led to a persistent decrease in the ETH trade volume in February. These disturbances underline the vulnerability of fragmented order books.
The report also emphasized that the liquidity of the Stablecoin remains higher in crypto-to-crypto transactions than in Fiat pairs, due to bank hinderry and compliance friction. However, their growth in combination with relaxation can enforce their role in finance.
In the meantime, slippage analysis on UNISWAP shows that stablecoin pairs with low volatility retain almost zero slips, while ETH pairs can show a high variation, especially during competitive price movements.
According to the report, the liquidity of the crypto market will continue to ripen with the accession of institutional investors and regulated products, fragmentation, design restrictions and inconsistent depth hinder the full efficiency of the entire scale.