Digital asset exchange Bitfinex has the most liquid bitcoin and ethereum pairs, based upon order book depth analysis by The Block.While trading volume is a headline figure showcased by many cryptocurrency exchanges, the level of liquidity offers a far more valuable insight into the quality of trade execution and transaction costs, particularly in the turbulent conditions that have characterised recent cryptocurrency markets. High liquidity provides traders with tighter spreads and lower slippage.
The Block’s research, which analysed the order book depth for US Dollar pairs for bitcoin, ethereum and ripple’s XRP on 21 leading cryptocurrency exchanges, found that Bitfinex has by far the most liquid bitcoin pair with combined orders of USD60 million. Furthermore, Bitfinex was found to have the most liquid ethereum pair, with combined orders of USD12.6 million.
“When high levels of volatility happens, as was the case on March 12/13 when the price of Bitcoin plunged by 50 per cent, Bitfinex’s order book liquidity demonstrates its true power,” says Paolo Ardoino, CTO at Bitfinex. “On crypto exchanges, volume can be made by market makers that all quote small sizes near the top of the book. Liquidity is much more precious and harder to replicate. In this regard, Bitfinex is king.”
The crypto market crash on March 12/13 saw daily volumes hit USD75.9 billion in a single day (13 March), representing the single greatest daily volume recorded in crypto asset history, according to research by CryptoCompare, a specialist provider of market data in the digital asset space. Bitfinex’s position as the go-to place to trade, providing genuine liquidity, was most apparent during the first hour of bitcoin’s massive 50 per cent price drop, according to CryptoCompare. Among top-tier exchanges excluding Coinbase, OKEx and Bitstamp, “between 10:40 am and 11 am, it represented 40 per cent of volume on average among these exchanges,” the report found. During the brief period, Bitfinex was handling up to USD11.8 million worth of trades per minute.
Bitfinex is leveraging its position as a one-stop-shop for crypto trading, offering a variety of services, including margin trading with up to five-times leverage. The exchange also offers users access to a separate, perpetual swap contract offering 100-times leverage through its affiliate, iFinex Financial Technologies Limited.
