Coinbase recently stated that there has been no significant change in Bitcoin (BTC) 
$77,710 liquidity following the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Cumberland. The company aimed to mitigate the concerns raised by Paris-based Kaiko, which reported a decline in liquidity. In an email to CoinDesk, Coinbase asserted, “We did not observe a 2% change or decline in BTC-USD depth throughout October,” emphasizing that liquidity remained stable. According to Kaiko’s report, liquidity sharply decreased on October 10 after the SEC’s allegations against Cumberland.
Kaiko: Liquidity Drop and Market Depth
Kaiko noted a 46% decline in Bitcoin liquidity on the Coinbase exchange at 11:00 AM UTC on October 10. This liquidity, measured with a 2% market depth, indicates that both buy and sell orders cluster around an average price within 2%. Such a decrease suggests that even smaller orders could move the price by up to 2%.
Kaiko observed a drop in liquidity on the sell side, while an increase was noted on the buy side. This situation implies that market makers are adjusting their positions, anticipating a price decline. The firm also reported reduced liquidity across other exchanges, indicating that overall liquidity in U.S.-based platforms has not yet returned to pre-lawsuit levels.
Cumberland: No Change in Operations
Cumberland contested Kaiko’s analysis in a statement to CoinDesk, asserting that their operations had not been altered following the SEC lawsuit. The company emphasized, “We are not making any adjustments to our operations or liquidity assets due to this lawsuit.”
In a recent statement, Kaiko reiterated that liquidity has since recovered and suggested that the initial drop could be linked to changes in market expectations. Monitoring how market depth shifts and how liquidity fluctuations influence market sentiments will remain a critical focus for traders.
