Coinbase has stated that Bitcoin (BTC) liquidity remains stable despite the ongoing lawsuit from the U.S. Securities and Exchange Commission (SEC) against Cumberland. This declaration aims to address concerns stemming from a recent report by Kaiko, which highlighted a significant drop in liquidity. In a communication to CoinDesk, Coinbase firmly stated that it observed no substantial decline in BTC-USD depth throughout October, countering claims of market instability.
What Did Kaiko Report About Liquidity?
Kaiko’s analysis revealed a striking 46% decrease in Bitcoin liquidity on Coinbase, recorded on October 10. This liquidity drop was measured using a 2% market depth metric, which relies on the volume of buy and sell orders that are clustered around the average price. The implications of this decline suggest that even minor trades could significantly influence Bitcoin’s price.
How Is Cumberland Responding?
In response to Kaiko’s findings, Cumberland has rejected the notion that their operations have been affected by the SEC lawsuit. They stated clearly that they are not making any operational or liquidity changes. Despite Kaiko’s observations, Cumberland insists that liquidity has rebounded, indicating that the initial fluctuations may have been due to shifting market perceptions.
Key takeaways from this situation include:
- Coinbase reports stable Bitcoin liquidity levels.
- Kaiko noted a significant liquidity drop, suggesting market volatility.
- Cumberland maintains that its operations remain unchanged despite the allegations.
- The liquidity landscape across U.S. exchanges is still not back to pre-lawsuit conditions.
As traders keep a close watch on market depth and liquidity trends, understanding these dynamics will be crucial for navigating potential market shifts amidst regulatory scrutiny.