The S&P report highlighted that crypto trading platforms are becoming more efficient but remain fragmented with varied liquidity profiles.
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Liquidity in crypto markets continues to lag behind traditional finance due to fragmentation, technical design differences, and exposure to external shocks, according to a new report from S&P Global.
The study analyzed key liquidity metrics, volume, bid-ask spreads, market depth, and slippage, across centralized and decentralized trading venues for Bitcoin (BTC), Ethereum (ETH), and major stablecoins.
The report showed that crypto trading platforms are becoming more efficient but remain fractured across hundreds of markets, with liquidity profiles varying by exchange, asset pair, and trade size.
Spot trading volumes on exchanges like Binance still fall well short of traditional venues like the NYSE, and fiat-based trading pairs consistently exhibit shallower order books compared to crypto-native pairs.
Centralized exchanges (CEXs) mirror traditional stock markets in their reliance on order books and custodial accounts. They offer high speed and low spreads on popular stablecoin pairs, especially large-cap coins like Bitcoin.
In contrast, decentralized exchanges (DEXs) allow users to maintain custody through automated market makers (AMMs) but introduce price slippage and impermanent loss, especially during volatile periods or large trades.
Despite these challenges, some digital assets, particularly BTC, ETH, and USDT, show comparable or even narrower bid-ask spreads than mid-cap equities like Broadcom.
Overall, CEXs continue to dominate volume in the market and provide higher liquidity compared to their decentralized counterparts, which provide deeper access.
The report also noted that the launch of Bitcoin and Ether ETFs in the US has increased trading activity and deepened liquidity on crypto exchanges, though ETF trading volumes remain smaller than their underlying assets.
S&P also highlighted how political instability and exchange hacks can significantly impact localized liquidity, a prevalent issue in the crypto industry.
A political crisis in South Korea triggered a 30% drop in BTC-KRW pricing on Upbit in December 2024, while a February breach at Bybit led to a sustained decline in ETH trading volume. These disruptions underline the fragility of fragmented order books.
The report also highlighted that stablecoin liquidity remains higher in crypto-to-crypto trades than in fiat pairs, due to banking hurdles and compliance friction. However, their growth combined with easing regulations could enforce their role in finance.
Meanwhile, slippage analysis on Uniswap shows that low-volatility stablecoin pairs maintain near-zero slippage, while ETH pairs can show high variation, especially during sharp price moves.
According to the report, while crypto market liquidity is maturing with the entry of institutional investors and regulated products, fragmentation, design limitations, and inconsistent depth continue to hinder full-scale efficiency.
AJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
CryptoSlate is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI.
Your daily dose of must-have crypto news and deep dives. Direct to your inbox.
CryptoSlate’s latest market report dives deep into Chainalysis’ plan for banks to adopt crypto through a phased five-level maturity model that stretches from education to DeFi services.
Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.
Mission-driven operators bridge the gap between blockchain technology and community empowerment.
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Binance is a global leader in the blockchain ecosystem and cryptocurrency infrastructure, offering a comprehensive suite of services, including the world’s largest digital asset exchange by trading volume.
Upbit is currently one of the largest crypto-asset exchanges in South Korea.
Bybit is a cryptocurrency derivative trading platform established in March 2018 and registered in the BVI.
Designed with simplicity in mind, the Uniswap protocol provides an interface for seamless exchange of ERC20 tokens on Ethereum.
Disclaimer: By using this website, you agree to our Terms and Conditions and Privacy Policy. CryptoSlate has no affiliation or relationship with any coin, business, project or event unless explicitly stated otherwise. CryptoSlate is only an informational website that provides news about coins, blockchain companies, blockchain products and blockchain events. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence before making any investment decisions. CryptoSlate is not accountable, directly or indirectly, for any damage or loss incurred, alleged or otherwise, in connection to the use or reliance of any content you read on the site.
© 2025 CryptoSlate. All rights reserved. Disclaimers | Terms | Privacy
Please add “[email protected]“ to your email whitelist.
Stay connected via
