Four Insights on Crypto Liquidity From Binance US and FTX

Fragmented markets are a salient feature of the crypto asset class.

Catherine Coley is CEO of Binance US, the US arm of one of the largest crypto spot exchanges by liquidity and volume.

Exchanges are the biggest, the deepest-pocketed and among the most influential crypto firms operating today.

Crypto exchanges rule the roost because of their fee structure: 1 percent trading fees are typical, something you'd never see on a stock brokerage.

Exchanges are able to charge those rates today, perhaps due to FOMO or the novelty of the crypto asset category.

To attract order book depth both Binance US and FTX have added a long tail of thinly traded crypto assets.

Binance US began operations in September with seven markets and at the time of our webinar listed some two dozen.

Options for trading in smaller-cap crypto assets are limited, he said.

Derivatives markets must build indexes with many component spot markets, because they are likely to be ingesting erroneous or manipulated price data from exchanges, and there is no way to filter the good from the bad. Prices move so unpredictably in bitcoin and other crypto asset markets that it is impossible to distinguish fake pricing data from real.

The truth is, bitcoin markets, and markets in any other crypto asset, are not ready to meet the expectations of institutional asset managers.