Bitcoin (BTC) experienced a “flash pump” to $138,000 on Binance.US during the early trading hours of June 21, according to data from the crypto exchange.
The Bitcoin price spike lasted only seconds before returning to its normal level and was specific to the exchange’s BTC/USDT trading pair, while other assets continued to trade at their usual levels.
Low market depth
Since the U.S. Securities and Exchange Commission filed its lawsuit against Binance.US on June 5, market makers and traders have fled the exchange over concerns over potential asset lock-ups.
Blockchain analytics firm Kaiko reported that the exchange’s market depth dropped nearly 80% on June 12, with the market depth for 17 tokens dropping to $7 million from the $34 million recorded on June 4 — a day before the lawsuit from the SEC.
Kaiko said at the time:
“[Binance US] market makers are nervous and want to avoid volatility-induced losses and the non-negligible possibility of their assets being trapped in an FTX-style stock market collapse.
In addition, the exchange’s liquidity problem has been exacerbated by the bank partners’ decision to close their USD payment channels. In May, Bitcoin was trading at nearly a 3% discount on Binance US compared to other rival exchanges.
Binance.US market share plummets
The embattled crypto exchange market share compared to other US-based platforms has fallen up to 1%, according to Kaiko data.
Kaiko noted that this was significantly lower than the all-time high of 27% recorded a few months ago, adding that “the exchange’s reputation has been badly damaged” by the SEC’s lawsuit against it.
While the court rejected the SEC’s attempt to freeze its assets, the exchange has faced other issues, including the firing of about 50 staff from various departments.
Meanwhile, Binance US has maintained it would challenge the SEC’s allegations in court.
The post-Bitcoin price briefly pumps to $138,000 on Binance.US amid the exchange’s liquidity crisis first appeared on CryptoSlate.