Coinbase Says Bitcoin Liquidity on Exchange Unfazed After SEC's Lawsuit Against Cumberland
Coinbase reported stable trading conditions despite a decline in bitcoin (BTC) order book liquidity following the SEC's lawsuit against market maker Cumberland. A spokesperson stated there was no material change in BTC-USD depth throughout October. Kaiko's report indicated a 46% drop in 2% BTC depth on Coinbase on October 10, suggesting that smaller orders could significantly impact spot prices. The 2% market depth measures liquidity and the market's capacity to handle large trades with minimal price slippage. While ask-side depth decreased, bid depth increased, indicating market makers adjusted positions in anticipation of price declines. Other U.S. exchanges also experienced liquidity drops, remaining below pre-lawsuit levels. Cumberland denied any operational changes due to the SEC's actions, and Kaiko noted that liquidity has since recovered, attributing initial drops to shifts in market expectations.
