Kaiko reports Alameda gap still exists

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A Nov. 6 report from Kaiko, a major source of cryptocurrency market data, showed that despite Bitcoin’s gains in October, the Alameda gap still exists one year after the FTX crash.

Data shows that market depth remains 55% below FTX’s previous levels.

low volatility environment

Although Bitcoin surged 20% in October 2023, the Alameda Gap, also defined as the sharp decline in order book liquidity following the collapse of FTX and its sister company Alameda Research, continues.

Kaiko reports Alameda gap remains - 1
Alameda gap remains Source: Beizi

Judging from last week’s data, the 2% market depth of BTC, ETH and altcoins on centralized exchanges hovered at $800 million, still well below FTX’s previous levels.

While Kaiko likens this segment to a low trading volume and low volatility environment that is keeping advanced traders and liquidity providers away from the cryptocurrency market, the data provider also highlighted that there are also structural reasons, including market makers in Exiting the market after suffering a loss or loss. FTX then completely abandoned the digital asset market.

After focusing on solvency

Last year, much of the cryptocurrency community was on edge following developments involving the collapse of one of the world’s largest cryptocurrency exchanges, FTX. A CoinDesk report highlighted potential leverage and solvency issues as the volatile cryptocurrency market took a multi-billion dollar hit, triggering a liquidity crisis on exchanges.

In late December, now-former CEO Sam Bankman-Fried was arrested in the Bahamas and extradited to the United States. He pleaded not guilty to all criminal charges in January, and a jury later found Sam Bankman-Fried is guilty of all criminal charges. TOLL.

As the market for cryptocurrencies like Bitcoin continues to heat up, the question remains: Is the world ready to move beyond the FTX era?


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