The banking crisis has caused the BTCUSD to hit a 10 month low, even lower than the aftermath of FTX, according to a new report.
Kaiko highlighted the importance of market depth, spreads, slippage and volumes in measuring liquidity in the criptocurrency markets. Market depth, which represents the number of orders waiting to be filled within a certain price range, was particularly relevant in this regard.
The data showed that the market for Bitcoins had dropped significantly.
The closure of Silvergate Capital Corp.'s SI SEN network and Signature's Signet payment network, two critical pieces of infrastructure for market makers in the space, impacted the liquidity on the U.S. exchanges.
Volumes have picked up, but lack of liquidity has resulted in reduced depth, spreads, and slippage, creating a less attractive asset class for the next wave of investors.
The report concluded that USD pairs were being phased out by investors in favor of stable coins, making the lack of USD payment rails an institutional problem that would have knock-on effects on everyone in the space.
The report said that it was optimistic that a payment network similar to SEN or Signet would emerge in the U.S., resulting in a boost to liquidity, less volatility and a more attractive asset class for investors.
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