* . *
  • About
  • Advertise
  • Privacy & Policy
  • Contact
Sunday, June 15, 2025
Earth-News
  • Home
  • Business
  • Entertainment
    The Iconic Missouri Diner That Gives You A Taste Of Live Entertainment With Your Meal – Yahoo

    Savor Delicious Meals While Enjoying Live Entertainment at Missouri’s Iconic Diner

    Keke Palmer Revealed How She Came Up With Her Son Leodis’ Name – Yahoo

    Keke Palmer Shares the Heartwarming Story Behind Her Son Leodis’ Name

    The Media and Entertainment Deal Machine Is Revving Up – WSJ

    The Media and Entertainment Deal Machine Is Gearing Up for Action

    Op-Ed: Data Storage and Protection in Today’s Media & Entertainment Industry – Sports Video Group

    How Data Storage and Protection Are Transforming the Media & Entertainment Industry

    The Analyst Verdict: PENN Entertainment In The Eyes Of 7 Experts – Nasdaq

    7 Experts Reveal the Ultimate Verdict on PENN Entertainment

    3 Arts Entertainment Expands Into News With Acquisition of OManagement (Exclusive) – The Hollywood Reporter

    3 Arts Entertainment Expands Into News With Acquisition of OManagement (Exclusive) – The Hollywood Reporter

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Editor’s Pick: 9 Books on Technology – The Gospel Coalition

    9 Must-Read Books That Will Completely Transform How You Understand Technology

    New Semiconductor Technology Could Supercharge 6G Delivery – SciTechDaily

    Revolutionary Semiconductor Technology Set to Turbocharge 6G Connectivity

    UTC To Host Quantum Technology Workshop June 23-25 – Chattanoogan.com: Breaking News

    Join the Quantum Technology Workshop This June 23-25!

    Rimac Technology Powers the Bugatti Tourbillon with Cutting-Edge Battery and Powertrain Tech – Rimac Newsroom

    Rimac Technology Drives the Bugatti Tourbillon with Revolutionary Battery and Powertrain Innovation

    “Co-creation” boosts commercial technology for dual-use defense applications – Breaking Defense

    “Co-creation” boosts commercial technology for dual-use defense applications – Breaking Defense

    MSI Viking and Mahr Host Technology Day – WSPA 7NEWS

    Step Inside the Thrilling World of MSI Viking and Mahr Technology Day!

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
  • Home
  • Business
  • Entertainment
    The Iconic Missouri Diner That Gives You A Taste Of Live Entertainment With Your Meal – Yahoo

    Savor Delicious Meals While Enjoying Live Entertainment at Missouri’s Iconic Diner

    Keke Palmer Revealed How She Came Up With Her Son Leodis’ Name – Yahoo

    Keke Palmer Shares the Heartwarming Story Behind Her Son Leodis’ Name

    The Media and Entertainment Deal Machine Is Revving Up – WSJ

    The Media and Entertainment Deal Machine Is Gearing Up for Action

    Op-Ed: Data Storage and Protection in Today’s Media & Entertainment Industry – Sports Video Group

    How Data Storage and Protection Are Transforming the Media & Entertainment Industry

    The Analyst Verdict: PENN Entertainment In The Eyes Of 7 Experts – Nasdaq

    7 Experts Reveal the Ultimate Verdict on PENN Entertainment

    3 Arts Entertainment Expands Into News With Acquisition of OManagement (Exclusive) – The Hollywood Reporter

    3 Arts Entertainment Expands Into News With Acquisition of OManagement (Exclusive) – The Hollywood Reporter

  • General
  • Health
  • News

    Cracking the Code: Why China’s Economic Challenges Aren’t Shaking Markets, Unlike America’s” – Bloomberg

    Trump’s Narrow Window to Spread the Truth About Harris

    Trump’s Narrow Window to Spread the Truth About Harris

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    Israel-Gaza war live updates: Hamas leader Ismail Haniyeh assassinated in Iran, group says

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    PAP Boss to Niger Delta Youths, Stay Away from the Protest

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Court Restricts Protests In Lagos To Freedom, Peace Park

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Fans React to Jazz Jennings’ Inspiring Weight Loss Journey

    Trending Tags

    • Trump Inauguration
    • United Stated
    • White House
    • Market Stories
    • Election Results
  • Science
  • Sports
  • Technology
    Editor’s Pick: 9 Books on Technology – The Gospel Coalition

    9 Must-Read Books That Will Completely Transform How You Understand Technology

    New Semiconductor Technology Could Supercharge 6G Delivery – SciTechDaily

    Revolutionary Semiconductor Technology Set to Turbocharge 6G Connectivity

    UTC To Host Quantum Technology Workshop June 23-25 – Chattanoogan.com: Breaking News

    Join the Quantum Technology Workshop This June 23-25!

    Rimac Technology Powers the Bugatti Tourbillon with Cutting-Edge Battery and Powertrain Tech – Rimac Newsroom

    Rimac Technology Drives the Bugatti Tourbillon with Revolutionary Battery and Powertrain Innovation

    “Co-creation” boosts commercial technology for dual-use defense applications – Breaking Defense

    “Co-creation” boosts commercial technology for dual-use defense applications – Breaking Defense

    MSI Viking and Mahr Host Technology Day – WSPA 7NEWS

    Step Inside the Thrilling World of MSI Viking and Mahr Technology Day!

    Trending Tags

    • Nintendo Switch
    • CES 2017
    • Playstation 4 Pro
    • Mark Zuckerberg
No Result
View All Result
Earth-News
No Result
View All Result
Home General

Why liquidity is an important metric in crypto markets

April 23, 2024
in General
Why liquidity is an important metric in crypto markets
Share on FacebookShare on Twitter

Trading volume has long been the default metric cited by analysts, media pundits and aggregators to rank cryptocurrency exchanges. While volume provides a high-level overview of marketplace activity, it can be faked to create the impression there’s more legitimate trading activity on a marketplace than there really is. 

The exchange can simply print non-existent trades or they can incentivize clients to engage in wash trading (the placement of buy and sell orders in the same size at the same price that instantly cancel each other out, creating additional exchange trade volume that adds no actual liquidity). Volume can be abused as a vanity metric that doesn’t offer a meaningful indicator of a legitimate trader’s expected experience.

Liquidity: The lifeblood of any thriving marketplace

Think of liquidity as the speed and ease with which orders are filled without impacting an asset’s spot price. As a metric, it tells participants how easy it is to execute trades either at or close to the current market price.  

Across the various market health metrics that Kraken monitors, we use six to track exchange liquidity:

Spread

The price difference between the highest bid (price a buyer is willing to pay) and lowest ask (price a seller is willing to take). Tighter spreads make for better trading because they mean a lower cost of trading (beyond just fees) and represent a better consensus on an asset’s current market value.

Depth

The relative size and number of open bids and asks at any one time. Marketplace depth means new orders can be more readily filled, reducing impact to the trading price.

Order book stability

The degree marketplace depth varies across a given time period, but particularly during distressed market conditions. High order book stability means orders have a consistent level of market impact. This is particularly important when volatility is high.

Bid/ask imbalance

The comparative size of bids and asks at a given depth. Imbalances (e.g., much larger sized bids than asks) create unstable directional liquidity, leaving an asset price susceptible to high volatility in one direction.

Latent liquidity

The market order cost measured by taker fees. Setting taker fees at the right level ensures market orders can be placed at the optimum opportunity cost. 

Price dispersion

The speed at which exchanges update market prices relative to other exchanges. Minimal price dispersion means traders can act promptly on new price information.

The real-world trading impact of liquidity

High liquidity saves time and money. Like an actual physical marketplace, transactions occur swiftly and seamlessly if there are plenty of buyers and sellers. On the flipside, illiquid marketplaces incur an opportunity cost: transactions take longer to fill and get executed at less favorable prices.

Because of this, liquidity also encourages trading activity… which leads to more order flow… which creates still more liquidity: a virtuous cycle. Low liquidity can create a higher execution risk that discourages clients from trading on the platform, further lowering liquidity.

Liquidity communicates important information that volume does not

As a metric, liquidity speaks to the quality of the trading experience: It’s self-evident to the client whether a marketplace is liquid or not. If exchanges were ranked by liquidity, there’d be no benefit to venues printing fake trades or inducing clients to wash trade.

There would be no point to artificially inflating nominal volume numbers. The focus would be on aligning incentives between the exchange and the end user.

Consider liquidity as a byword for marketplace resilience. In an illiquid market, orders have a significant price impact, which discourages legitimate trading activity. Illiquidity also provides opportunities for bad actors to manipulate prices with high-volume orders around one depth or price point.

Regulators have previously expressed concern that crypto prices are too easily swayed by whales. In a liquid marketplace, large orders are more easily absorbed, preventing disruptive market impacts.

Emphasizing liquidity over trading volume would directly incentivize exchanges to offer a better practical trading experience to attract new clients. Wider awareness of these dynamics will yield a healthy, flourishing ecosystem and marketplaces that clients can confidently and efficiently navigate.

These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell, stake or hold any cryptoasset or to engage in any specific trading strategy. Kraken does not and will not work to increase or decrease the price of any particular cryptoasset it makes available. Some crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the cryptoasset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your cryptoassets and you should seek independent advice on your taxation position. Geographic restrictions may apply.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Kraken.com – https://blog.kraken.com/crypto-education/why-liquidity-is-an-important-metric-in-crypto-markets

Previous Post

SEC Lawyers Resign Following ‘Gross Abuse of Power’ in Crypto Case 

Next Post

AI is turning into something totally new | Mustafa Suleyman

World Bank warns the global economy is barreling toward its weakest decade in 50 years – Fortune

Global Economy Braces for Its Weakest Decade in Half a Century, Warns Experts

June 15, 2025
The Iconic Missouri Diner That Gives You A Taste Of Live Entertainment With Your Meal – Yahoo

Savor Delicious Meals While Enjoying Live Entertainment at Missouri’s Iconic Diner

June 15, 2025

Urgent Update: Fourth Emergency Committee Meeting on 2024 Mpox Surge and Temporary Recommendations

June 15, 2025
Democrat Mikie Sherrill and Republican Jack Ciattarelli win New Jersey governor primaries – CNN

Democrat Mikie Sherrill and Republican Jack Ciattarelli win New Jersey governor primaries – CNN

June 15, 2025
Editor’s Pick: 9 Books on Technology – The Gospel Coalition

9 Must-Read Books That Will Completely Transform How You Understand Technology

June 15, 2025
Research Progress and Development Trend of Restoration of Damaged Coastal Wetland Ecosystems in Greater Bay Areas | Newswise – Newswise

Advancements and Future Directions in Restoring Damaged Coastal Wetlands of the Greater Bay Area

June 14, 2025
National Science Foundation Grant Funds Launch of Innovative Engineering Research Program Supporting Neurodivergent Students – University of New Haven

Revolutionary Engineering Program Empowers Neurodivergent Students with Innovative Research Grant

June 14, 2025

Unlock the 4 Science-Backed Secrets to Effortless, Flowing Conversations

June 14, 2025
Permaculture Club: learning to create a self -sufficient lifestyle – Rockton-Roscoe News

Permaculture Club: learning to create a self -sufficient lifestyle – Rockton-Roscoe News

June 14, 2025
Why FIFA’s revamped Club World Cup is off to a bumpy debut in the U.S. – NPR

Why FIFA’s Revamped Club World Cup Is Facing a Rocky Start in the U.S

June 14, 2025

Categories

Archives

June 2025
MTWTFSS
 1
2345678
9101112131415
16171819202122
23242526272829
30 
« May    
Earth-News.info

The Earth News is an independent English-language daily published Website from all around the World News

Browse by Category

  • Business (20,132)
  • Ecology (686)
  • Economy (701)
  • Entertainment (21,604)
  • General (15,389)
  • Health (9,742)
  • Lifestyle (705)
  • News (22,149)
  • People (702)
  • Politics (708)
  • Science (15,918)
  • Sports (21,201)
  • Technology (15,688)
  • World (683)

Recent News

World Bank warns the global economy is barreling toward its weakest decade in 50 years – Fortune

Global Economy Braces for Its Weakest Decade in Half a Century, Warns Experts

June 15, 2025
The Iconic Missouri Diner That Gives You A Taste Of Live Entertainment With Your Meal – Yahoo

Savor Delicious Meals While Enjoying Live Entertainment at Missouri’s Iconic Diner

June 15, 2025
  • About
  • Advertise
  • Privacy & Policy
  • Contact

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

No Result
View All Result

© 2023 earth-news.info

Go to mobile version