Closure of Silvergate’s SEN and Signature’s Signet network exposes market to low liquidity risks, causing concerns for traders and investors
As Bitcoin’s price recovers from its March lows, nearing $28,900, concerns surrounding the liquidity crisis that caused the initial dip persist.
The closure of Silvergate’s SEN and Signature’s Signet network in early March has left the crypto market exposed to low liquidity risks.
Liquidity, considered king in trading circles, refers to a market’s ability to facilitate the conversion between an asset and fiat currency. Poor liquidity can lead to market inefficiencies, causing traders to lose money due to thin order books, slippage, and larger spreads. This may also result in serious volatility, deterring investors from trading.
Read the article about theliquidity crisis in crypto.