Thanks, Binance: Crypto Liquidity Shows Signs of Recovery

Over the past week, market depth has experienced a slight recovery, with the total quantity of bitcoin within 2% of the mid price

article-image

Blockworks Exclusive art by axel rangel

share

The so-called “Alameda Gap” in crypto liquidity on centralized exchanges shows early signs of letting up, thanks to Binance, according to new research from Kaiko. 

A steep drop in crypto market depth occurred earlier this month when Alameda Research, the hedge fund arm of Sam Bankman-Fried’s since-collapsed FTX, ceased trading operations. Other market makers followed suit, plunging liquidity to low levels not seen since early June, Kaiko noted in a report Monday. 

“Thankfully, over the past week depth has experienced a slight recovery, with the total quantity of BTC within 2% of the mid price increasing from 6.8k to 9.1k,” Kaiko analysts wrote. “In dollar terms, market depth has increased from $112 [million] to $150 [million], which suggests market makers are slowly redeploying capital across exchanges.”

Bid-ask spreads show that market makers on some exchanges are still wary of volatility; spreads for BTC-USD pairs “on most exchanges have not yet recovered,” analysts noted. 

The slight rebound in liquidity levels may not last long, analysts warn. Last week’s bankruptcy filings revealed FTX owes its 50 biggest creditors a combined $3 billion. Japanese crypto exchange Liquid, which FTX acquired in March, suspended all trading and withdrawals over the weekend, suggesting further contagion. 

Genesis suspended withdrawals last week, fueling rumors of a possible bankruptcy filing from parent company Digital Currency Group. The news has traders alarmed. 

“Trade volumes on top centralized exchanges more than halved from the week prior, falling to $100 [billion] as traders pulled out from the market,” researchers noted. “Huobi and Bitfinex registered the largest average weekly declines of 82% and 75%, respectively.” 

The weekly trading volumes on Binance remained firmly above $80 billion over the past few months, likely due to its aggressive fee reduction, analysts added.

Decentralized exchange tokens are down 16%, Kaiko researchers noted, performing slightly better than bitcoin. 

“Notably, the token of decentralized derivatives exchange dYdX surged by 18%, suggesting that competition on derivative markets for the gap left by FTX is heating up,” analysts wrote. “DeFi projects were also strongly impacted by the risk-off shift in sentiment and are down 25%.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Swiss regulator Gespa is assessing whether FIFA’s tokenized ticket sales for the 2026 World Cup violate gambling laws

by Blockworks /
article-image

The deal gives Ondo Finance SEC-registered broker-dealer, ATS, and transfer agent licenses to operate regulated tokenized securities markets

by Blockworks /
article-image

Ethereum and Solana funds mark industry first as Grayscale adds staking to spot crypto products

by Blockworks /
article-image

US bitcoin ETFs that seen more than $2.2 billion of net inflows over the last four trading days

by Blockworks /
article-image

More than 75 million U.S. Galaxy owners gain integrated Coinbase One access through Samsung Wallet, with global rollout planned

by Blockworks /
article-image

The central bank signed agreements with firms for fraud, payments, and app services ahead of a potential launch

by Blockworks /