Bitcoin is a decentralized digital currency that is based on a peer-to-peer network. It was created in 2009 by an anonymous individual or group of individuals using the pseudonym “Satoshi Nakamoto”. Bitcoin is not controlled by any government or financial institution, and its value is determined by supply and demand in the market.
Bitcoin transactions are recorded on a public ledger called the blockchain, which is maintained by a network of computers around the world. Transactions are verified by the network through a process called mining, in which computers compete to solve complex mathematical problems and earn new bitcoins as a reward.
Bitcoin has become popular as a form of digital currency because it offers several advantages over traditional forms of payment. For example, it allows for fast and inexpensive peer-to-peer transactions without the need for intermediaries like banks. Additionally, it offers a high degree of privacy and security, as transactions are pseudonymous and difficult to trace.
However, Bitcoin has also faced criticism for its association with illegal activities, such as money laundering and the purchase of illegal goods on the dark web. It is also highly volatile, with its value fluctuating rapidly based on market demand. Despite these challenges, Bitcoin and other cryptocurrencies continue to gain popularity as a form of digital currency and investment.
Bitcoin Price and Chart
BTC Price Statistics
|24h Low / 24h High||$27,689.94 /$28,178.14|
|Volume / Market Cap||0.02726|
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Bitcoin News Updates
Date : 28.03.2023
Bitcoin Liquidity Drops to A 10-Month Low Despite Price Growth
Bitcoin continues to be the most popular cryptocurrency, providing an opportunity for numerous other digital assets that substantially contribute to the development of the cryptocurrency ecosystem. Even though Bitcoin is still the most widely used cryptocurrency, its existence also helps explain the popularity of numerous altcoins today. However, notwithstanding the cryptocurrency industry’s recent success, the past 12 months might have gone better. Following the announcement by regulators to ensure all depositors at Silicon Valley Bank and establish a fund to support other institutions nationwide, the price of bitcoin increased by around 18%. Despite Bitcoin price growth, Bitcoin liquidity drops due to the loss of access to dollar-payment systems by the companies that buy and sell cryptocurrency.
Early in March saw the collapse of Signature’s Signet network and Silvergate’s SEN, which exposed the cryptocurrency market to Bitcoin liquidity issues. It refers to a market’s capacity to facilitate the exchange of an asset for fiat money. Market inefficiencies brought on by narrow order books, slippage, and wide spreads prevent traders from losing traders to lose money when there is insufficient liquidity surrounding an asset. Also, it might lead to significant volatility and discourage experienced investors from making transactions.
According to experts, the liquidity problem originally appeared as a $200 million decline in 1% trade volume following Silvergate’s network closure. By adding the bids and offers for the top 10 cryptocurrencies that are within 1% of the mid-price, the 1% market depth is determined. Market volatility decreases with enough market depth and high order book activity around the market price. From current quarterly opening levels, the market liquidity for Bitcoin and Ethereum is still down 16.12% and 17.64%, respectively” as per the decrypt site source. More | https://www.analyticsinsight.net/bitcoin-liquidity-drops-to-a-10-month-low-despite-price-growth/
Bitcoin Liquidity Hits 10-Month Low Even With the Price Surging
- Market-makers losing access to USD payment rails, says Kaiko
- Can get more volatility due to concentrated ownership: Devitt
Report | https://www.bloomberg.com/news/articles/2023-03-26/bitcoin-liquidity-hits-10-month-low-even-with-the-price-surging#xj4y7vzkg
Cryptoverse: Buoyant bitcoin’s losing its liquidity
March 28 (Reuters) – Bullish bitcoin has been a surprise winner of the banking blowout. Yet investors aiming to amp up their bets face an ominous obstacle: a lack of liquidity that could trigger wild price swings.
The price of the No.1 cryptocurrency has jumped 40% to around $27,700 since March 10, when the failure of Silicon Valley Bank (SVB) careered into mainstream markets.
On the flip side, though, its liquidity is drying up.
Bitcoin’s market depth indicates the asset is at its lowest level of liquidity in 10 months, even lower than in the aftermath of the FTX collapse in November, according to data provider Kaiko. The market depth for the two leading trading pairs – bitcoin-dollar and bitcoin-tether – stands at 5,600 bitcoin, the equivalent of about $155 million, Kaiko said.
“As a market maker we try to provide liquidity where we can but we’re facing a difficult situation,” said Kevin de Patoul, CEO of Keyrock. “There is a big network effect here. In the short term at least, liquidity will remain a challenge.”
Slippage, a liquidity measure describing how much prices change between the placement and execution of a trade, has also increased. Slippage for buying bitcoin with U.S. dollars on the Coinbase exchange is 2.5 times higher than it was at the start of March, said Conor Ryder, research analyst at Kaiko.
The slippage for a simulated $100,000 sell order has doubled in the past month, meaning the average price you get for each bitcoin is worse than a month ago, Kaiko said.
The network effect de Patoul referred to was the collapses of Silvergate Capital and Signature Bank, whose networks had long been used by market makers – which expand liquidity by rapidly buying and selling tokens – to transact with exchanges.
Lower liquidity typically translates to more volatile markets, especially in crypto. Kaiko’s Ryder said this was possibly one factor behind bitcoin’s leap this month.
CryptoCompare’s Bitcoin Volatility Index spiked to 96 last week, way higher than the range of 52 to 65 it saw last month as the cryptocurrency held its footing despite broader market turmoil. The index is currently hovering around 68. report | https://www.reuters.com/technology/cryptoverse-buoyant-bitcoins-losing-its-liquidity-2023-03-28/