According to data tracked by digital asset data company CCData, since the U.S. Ethereum spot exchange-traded fund (ETF) was listed on July 23 this year, the market depth of Ethereum (ETH) on exchanges has declined, which is similar to that of Bitcoin. (BTC) The situation is different after the spot ETF is listed.
Some analysts predicted last year that spot ETFs would have a net positive impact on market liquidity, making it easier to execute large buy and sell orders at stable prices, and this has been confirmed in the Bitcoin market. After the Bitcoin spot ETF was launched in January this year, Bitcoin’s market liquidity increased significantly.
However, data tracked by CCData shows that the average 5% market depth for Ethereum trading pairs on U.S. centralized exchanges fell by 20% to around $14 million. On offshore centralized exchanges it fell 19% to around $10 million. In other words, it is now actually easier to move spot prices 5% in either direction, a sign of reduced liquidity and increased sensitivity to large orders.
“Although market liquidity for ETH trading pairs on centralized exchanges is still higher than at the beginning of the year, liquidity has dropped by nearly 45% since the peak in June,” CCData research analyst Jacob Joseph told CoinDesk. "This is likely due to poor market conditions and the seasonal effects of the summer months, which are typically accompanied by lower trading activity," he said.
This metric refers to the volume of buy and sell orders for an asset within 5% of the mid-market price, with higher depth indicating greater liquidity and lower slippage costs. CCData considers 5% market depth of all ETH trading pairs across 30 centralized exchanges.
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