Alameda Gap Persists as Stunted Liquidity Holds Back Crypto Market

cryptonews.com:

February is ending, but the 'Alameda Gap' is not.

As the second month of this year is wrapping up, the prices in the crypto market have somewhat recovered from last year's crash. Still, the so-called 'Alameda Gap' resists filling, as the liquidity remains far from the levels seen before the infamous FTX collapse. 

Researcher Kaiko tweeted that this month as well, the Gap persists, with bitcoin (BTC) "market depth still well below November levels." It stated that,

"The quantity of BTC-USD(T) bids and asks within 2% of the mid-price aggregated on 16 exchanges hovered around 8k BTC in February -- 40% less than in October."

As a reminder, the FTX exchange, along with its parent company Alameda Research and a number of subsidiaries, filed for bankruptcy back in November last year - and these companies, along with the founder Sam Bankman-Fried, have been dealing with the regulatory and legal falout ever since (at the expense of the users). 

Kaiko noted the existence of the 'Alameda Gap' that very same month, arguing that, typically, liquidity plunges occur during periods of volatility as market makers rush to manage risks.

"Crypto liquidity is dominated by just a handful of trading firms, including Wintermute, Amber Group, B2C2, Genesis, Cumberland and (the now defunct) Alameda. With the loss of one of the largest market makers, we can expect a significant drop in liquidity, which we will call the “Alameda Gap”," it said at the time. 

Riyad Carey, research analyst at the company, was quoted by Bloomberg on Friday as saying that, 

"It’s not just Alameda, although they were one of the biggest. Other market-makers took a hit and are being more cautious. [...] It really depends on the token, but I’d say there’s still a 20-40% gap from