Binance, BitMEX, and Coinbase are just a small sample of the major players in the Bitcoin market all fighting for a piece of the pie. BitMEX has long enjoyed dominance over the rest of the market, but new data shows that Binance is striking distance from overtaking BitMEX and becoming the top liquidity provider for massive market orders.
Why Whales Require Liquidity To Fill Their Massive Market Orders
Few things are important to financial markets as trading volume and liquidity. Without those two aspects, orders would sit waiting to get filled, and when they did, it would wipe the order book clean and cause massive price fluctuations.
This is exactly why many small-cap altcoins pump so hard or violently crash when money flows in and out of the crypto asset. The more widely adopted and traded an asset, the more volume and liquidity there is for traders to tap into.
There’s less spread between the bid and ask prices, and less slippage when orders execute.
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Which Bitcoin exchange or platform you choose is just as important, as only the most popular and reliable platforms have the deepest liquidity and most trading volume.
All across the Bitcoin market, there’s massive competition. In the derivatives space, there’s BitMEX, PrimeXBT, FTX, and more. Spot exchanges are represented by Coinbase and Gemini, while Binance is a bit of both.
Whether its the positive reputation, or Binance offering several options above and beyond what BitMEX does, the cryptocurrency exchange is closing in at overtaking BitMEX.
BitMEX Versus Binance $10mln B/O Spread (%, Daily Avg) | Source: skew
Binance Edges Out BitMEX In Daily Average Bid/Offer Spread For $10 Million Orders
Data from skew blockchain and crypto market analytics shows that Binance is “now competing very closely with BitMEX in terms of liquidity for large market orders.”
According to a tweet, the “theoretical Bid/Ask on a $10mln market order is ~31-32bps on both” platforms, suggesting they are now neck and neck.
Devastation stemming from the notorious Black Thursday cascade effect of BitMEX traders being liquidated has left a dark cloud over the Bitcoin margin trading platform. The platform’s negative reputation may also be catching up with them as a result.
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Meanwhile, Binance continues to grow its business. It recently purchased CoinMarketCap, launched a Twitter emoji for its Binance Coin token to celebrate its anniversary, and several IEO tokens are soaring.
Binance being a split between derivatives, spot, and its catalog of exotic altcoins makes the platform especially attractive for crypto whales. Now that liquidity can handle their large-sized market orders, BitMEX’s days could be numbered. Especially with a growing sea of competition in the crypto space.