Crypto market liquidity dries up following Alameda and FTX collapse
The crypto market has experienced a liquidity dry up in the wake of the collapse of crypto exchange FTX and its sister trading firm Alameda Research, according to data provider Kaiko. The firms, both founded by disgraced former billionaire Sam Bankman-Fried, were key market participants until they filed for bankruptcy protection.
Crypto liquidity is dominated by just a handful of trading firms, including Wintermute, Amber Group, B2C2, Genesis, Cumberland and [the now defunct] Alameda," the firm said. "With the loss of one of the largest market makers, we can expect a significant drop in liquidity, which we will call the 'Alameda gap. Kaiko said that bitcoin's market depth — which refers to the market's ability to absorb large orders over a specific period of time.
Source
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