Bitcoin

Bitcoin (<a href="https://cryptoslate.com/coins/bitcoin/">BTC</a>) premium trades on Binance.US is a symptom of an illiquid market and not evidence of market makers exiting the platform, according to blockchain analytical firm Kaiko.
In its May 9 report, the data aggregator explained why the flagship digital asset traded at a 2.5% premium on Binance.US compared to other U.S.-based exchanges.
<figure id="attachment_323987" aria-describedby="caption-attachment-323987" style="width: 1200px" class="wp-caption aligncenter"><img class="size-full wp-image-323987" src="https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAYIql3.jpg" alt="Bitcoin premium" width="1200" height="653" srcset="https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAYIql3.jpg 1200w, https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAYIql3-300x163.jpg 300w, https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAYIql3-1024x557.jpg 1024w, https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAYIql3-768x418.jpg 768w" sizes="(max-width: 1200px) 100vw, 1200px" /><figcaption id="caption-attachment-323987" class="wp-caption-text">Source: Kaiko</figcaption></figure>
According to the firm, speculations that market makers might be exiting the platform were mere rumors as there are no changes in its market depth.
Since April, several crypto community members have <a href="https://twitter.com/fewseethis/status/1655699176271781888?s=20">highlighted</a> the increasing premium BTC trade on the platform — with many inferring that market makers and insiders might be leaving because of possible legal action.
However, Kaiko <a href="https://research.kaiko.com/insights/binance-halts-withdrawals-as-btc-fees-surge">rejected</a> such assertions noting that the exchange&#8217;s struggle for a banking partner could play a role in the trades.
Kaiko said:
<blockquote>&#8220;The premium on Binance.US is more likely related to the exchange’s struggles to find a banking partner since the closure of Signature and Silvergate. With a surging demand for BTC generally, investors on Binance.US are likely looking at quicker withdrawal times for BTC compared to USD, and are rushing to trade into BTC at the same time, resulting in a premium on the exchange.&#8221;</blockquote>
<figure id="attachment_323986" aria-describedby="caption-attachment-323986" style="width: 1200px" class="wp-caption aligncenter"><img class="size-full wp-image-323986" src="https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAAsH2K.jpg" alt="Bitcoin market depth" width="1200" height="651" srcset="https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAAsH2K.jpg 1200w, https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAAsH2K-300x163.jpg 300w, https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAAsH2K-1024x556.jpg 1024w, https://cryptoslate.com/wp-content/uploads/2023/05/FvrlM7xWIAAsH2K-768x417.jpg 768w" sizes="(max-width: 1200px) 100vw, 1200px" /><figcaption id="caption-attachment-323986" class="wp-caption-text">Source: Kaiko</figcaption></figure>
Compared to the global Binance exchange, whose BTC&#8217;s 1% market depth has alternated between several highs and lows, Binance.US&#8217;s depth has remained stable. Kaiko data noted that this would not be so if a major market maker had left the platform.
Following the U.S. banking <a href="https://cryptoslate.com/insights/signature-bank-plummets-in-share-price-pre-market-after-news-of-silvergate-halting-operations/">crisis</a> that claimed three major crypto-friendly banks in March, the crypto industry has been exposed to low liquidity risks. At the time, CryptoSlate Insight <a href="https://cryptoslate.com/insights/bitcoin-liquidity-situation-worsening-volatility-expected-to-be-enhanced/">reported</a> that BTC&#8217;s order book reached a 10-month low.
Another <a href="https://cryptoslate.com/silvergate-troubles-affecting-cryptos-usd-market-depth/">report</a> noted that U.S.-based exchanges and market makers became less liquid as they seem most affected by Silvergate&#8217;s implosion.
The post <a rel="nofollow" href="https://cryptoslate.com/bitcoin-premium-on-binance-us-is-symptom-of-illiquid-market-kaiko/">Bitcoin premium on Binance.US is symptom of illiquid market: Kaiko</a> appeared first on <a rel="nofollow" href="https://cryptoslate.com">CryptoSlate</a>.

Bitcoin premium on Binance.US is symptom of illiquid market: Kaiko

CryptoSlate

Other articles published on May 10, 2023

Chiliz Unleashes Web3 Potential in Sports with Public Launch of Layer-1 Blockchain

Helio Protocol Strengthens Partnership with Wombat Exchange and Expands DeFi Stablecoin Offerings

Push to Launch American CBDC Will Drive Feverish Interest In Bitcoin, Says MicroStrategy’s Michae...

Bitcoin Miners Capitalizing on Ordinals Hype: Daily Revenue Hit 5-Year High at $17M

What Is the Cheapest and Easiest Way to DCA During Bear Market?

The VIP Lobby: Earn More with MagicCraft's Overhauled Web3 Lobby System

Join our free newsletter for daily crypto updates!