ETH Market Liquidity Drops 20% Despite Ether ETFs

The bitcoin (BTC) market saw a significant increase in liquidity following the launch of spot ETFs on Jan. 11, but that has not been the case with ether (ETH) ETFs. Ether’s order book liquidity has fallen since the launch of nine ETFs on July 23, according to data tracked by London-based CCData.

Market depth for ETH pairs listed on centralized exchanges in the U.S. has decreased by 20 percent, from an average of 5 percent to around $14 million. In other words, it has now become easier to move the spot price by 5 percent in either direction.

“While market liquidity for ETH pairs on centralized exchanges is higher than at the beginning of the year, liquidity has fallen by approximately 45% since its peak in June. This is likely due to poor market conditions and seasonality effects, which are typically accompanied by lower trading activity during the summer months,” said Jacob Joseph, research analyst at CCData.

Order book liquidity refers to the market’s ability to absorb large buy and sell orders without affecting the spot price. Greater depth indicates stronger liquidity and lower slippage costs.

According to data tracked by Farside Investors, ether ETFs have witnessed a cumulative outflow of over $500 million since July 23. According to CoinDesk data, the price of ether has fallen by over 25 percent to $2,380.