As Bitcoin (BTC) sinks below the $8,000 mark today amongst a sea of red in the crypto exchanges, the volatility seen within the digital asset world over much of this year shows no signs of abating.
As well as the extreme volatility evident in digital currencies, the lack of reliability in exchanges is not helping make trading crypto reach the mass take-up of trading seen in the forex and CFD markets.
Although crypto trading has been around for a few years already, there is still much to improve in the crypto infrastructure as a whole. Market fragmentation has been widespread in the financial sector for a while now and now finds itself widespread in the digital assets field too.
Solving the Issue of Liquidity
Crypto exchange hacks are not the only thing that a crypto investor has to worry about. Liquidity is one of the biggest problems facing new exchanges and smaller decentralized exchanges. Newer and smaller exchanges, as well as startups, often experience liquidity issues for a simple reason like inadequate levels of an asset are only available to them.
Small order books and big bid/ask spreads can slow trading down or bring trading to an immediate halt, This in turn further drives away customers and the liquidity they bring.
There have been improvements in solving the issue of liquidity. Networks of exchanges with shared liquidity have been created. Others have decoupled from Bitcoin (BTC) and Ethereum (ETH) to offer a more extensive range of fiat and stablecoin pairings.
