The future of digital asset liquidity: Centralized or decentralized?

Last month, Bitcoin (BTC) reached above $60,000, highlighting the current frenzy around digital currencies. Following BTC, altcoins also saw substantial increases in value. All of this is music to the ears of long-term and short-term bull investors seeking increased gains, even with the current pullback and support of Bitcoin hovering around $40,000. 

However, despite all the hype around the current bull run, a lack of digital asset liquidity continues to be a significant challenge for exchanges, traders, token issuers and market makers. The reality of today’s market is that professional crypto traders cannot efficiently access global liquidity or find the best global prices to increase profits.

For token issuers, the current climate has forced them to list their coins on numerous exchanges to reach their target client base. It drives up business development costs and forces issuers into niche markets. In order for the digital currency market to continue moving forward, these categories must be understood.

One of the main causes of illiquidity is rooted in market fragmentation. The idea behind crypto is much more than a sexy stock investment. Crypto is meant to be an entirely new way of handling money. But with all of the different coins — even the successful ones — and the lack of businesses accepting crypto payment, users aren’t utilizing crypto in the way it was initially intended.

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