Coinbase Maintains Steady Bitcoin Liquidity Despite SEC Lawsuit Concerns

Coinbase has countered allegations of a significant decline in Bitcoin (BTC) liquidity on its platform following the SEC's lawsuit against Cumberland, a leading market maker.

The company emphasized that trading conditions for BTC have remained stable throughout October. A Coinbase spokesperson clarified that the BTC-USD market depth at 2%, a vital liquidity measure, was unaffected.

This statement follows claims from Kaiko, which reported a 46% drop in the 2% market depth after the SEC’s accusations against Cumberland for operating as an unregistered broker.

Kaiko’s analysis showed BTC depth plummeting from 494 BTC to 267 BTC shortly after the lawsuit announcement, suggesting even minor transactions could impact prices on Coinbase.

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The 2% market depth metric indicates the overall buy and sell orders close to the mid-market price, reflecting the market’s capability to accommodate substantial trades with minimal slippage.

The report also noted a trend of rising buy orders amid declining sell-side depth, hinting that market makers may be positioning themselves in anticipation of price movements. Overall, liquidity across U.S. exchanges has dipped since the lawsuit, remaining below pre-lawsuit levels.

Alexander Zdravkov