According to recent reports by Kaiko, some of the world’s largest cryptocurrency exchanges have seen a significant drop in market depth due to disruptions in USD payment channels and crypto bank failures.

Specifically, Gemini’s market depth fell by 74% in March, Coinbase by 50%, and BinanceUS by 29%. However, Binance Global only saw a drop of 13%. This lack of liquidity could lead to more price volatility and unpredictable swings in both directions.

The crypto market liquidity in March was already down 52% before the news hit that depositors in SVB would be made whole. This only added to the volatility of prices in the immediate aftermath. However, the market depth increased by over $125m overnight, or 30%, as price effects played a role in restoring USD liquidity to exchanges.

Interestingly, a closer look at liquidity at the pair-level shows that a large portion of the increase actually came from renewed liquidity for USDC in particular. As Circle gained access to the $3.3bn they had in SVB as soon as Monday morning, USDC moved closer to its peg and market makers began offering liquidity for USDC pairs again.

Using USDC as the base asset, there was a huge spike of over $100m in extra liquidity offered overnight, with over $60m belonging to the relisted USDC-USDT pair on Binance, while the USDC-USD pair on Kraken saw an injection of $20m in liquidity as well.

The lack of liquidity and the recent disruptions in USD payment channels and crypto bank failures have highlighted the need for greater stability and security in the cryptocurrency market.

In conclusion, the drop in market depth on some of the major cryptocurrency exchanges is a cause for concern, as it can lead to increased price volatility and longer transaction times. It is crucial for exchanges to take steps to address these issues and ensure that they have sufficient liquidity to meet the needs of their customers.

Read more: https://azcoinnews.com/gemini-coinbase-and-binance-us-experience-major-decrease-in-market-depth-in-march-2023.html

#Gemini #Coinbase #Binance #azcoinnews

Digital Currency Group (DCG) Shutting Down TradeBlock Subsidiary Amidst Challenging Regulatory Environment and Economic Conditions

Digital Currency Group (DCG) has announced the closure of its prime brokerage subsidiary, TradeBlock, starting May 31. The decision is based on the challenging economic conditions and uncertain regulatory environment for #cryptocurrencies  in the United States. TradeBlock, led by Breanne Madigan, will initiate the winding down process on the specified date.

DCG's spokesperson stated that the closure of TradeBlock's institutional trading platform is a result of the difficult regulatory landscape for digital assets in the US, along with the prolonged period of low cryptocurrency market activity. This move follows DCG's previous closure of its wealth-management division headquarters in January 2023.

DCG and its portfolio companies have faced significant setbacks during the crypto market downturn. As a result, DCG had to lay off more than 500 employees, influenced by the collapse of #FTX  and the broader decline in the cryptocurrency industry.

In addition, DCG reported losses exceeding $1 billion in 2022, primarily due to the impact of Three Arrows Capital's downfall, a cryptocurrency hedge fund.

Digital Currency Group (DCG) Misses $630 Million Debt Payment to Gemini as Troubles Mount

DCG's troubles continue as they recently failed to make a $630 million debt payment owed to Gemini, a struggling cryptocurrency exchange. #Gemini  is now considering granting forbearance to DCG, which would allow a temporary reduction or halt in payments, with the expectation of resuming them later. Gemini's decision will depend on DCG's willingness to engage in constructive negotiations to reach a mutually agreeable solution.

To summarize, TradeBlock is winding down its operations as DCG cites the difficult economic conditions and regulatory uncertainties surrounding cryptocurrencies in the US. DCG has faced significant challenges, including layoffs and financial losses, and has also encountered difficulties in meeting debt obligations to Gemini.