Coinbase has reassured investors that the liquidity of Bitcoin (BTC) has not been significantly affected by the recent lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Cumberland. In light of concerns raised by the analytics firm Kaiko regarding a perceived decline in market liquidity, Coinbase emphasized that there has been no notable drop in BTC-USD trading depth during October.
How Did Kaiko Measure Liquidity Changes?
Kaiko reported a striking 46% decrease in Bitcoin liquidity on Coinbase on October 10, right after the SEC’s allegations surfaced. This metric, defined by a 2% market depth, reflects how closely buy and sell orders are grouped around a central price, indicating that even minor trades could influence price fluctuations significantly.
What Impact Did Cumberland Experience?
Despite Kaiko’s findings, Cumberland countered that its operations remain unchanged post-lawsuit. They maintained that no modifications have been made in response to the SEC’s actions, reiterating stability in their operational framework.
Key observations from the situation include:
- Coinbase confirms stable liquidity levels despite the SEC lawsuit.
- Kaiko’s report indicates a substantial liquidity drop on October 10, linked to market reactions.
- Cumberland asserts that their operational integrity remains intact.
- Traders are urged to keep an eye on liquidity trends and market sentiments moving forward.
As market dynamics evolve, the ongoing assessment of liquidity and its effects on trading behaviors holds significant importance for participants in the cryptocurrency space.