The State of Liquidity Report, published quarterly, offers valuable insights on the past quarter’s market listings and liquidity landscape. It covers overall market trading trends, volumes and volatility, token listing and delisting activity, and insights on notable listings during this period.
This report may be useful for projects that are looking to launch their own token in the near future, projects that are already listed, as well as investors and other market participants.
All the data used in this report is collected from publicly available sources.
With the approval of the Bitcoin Spot ETF and whispers of the new bull market, trading volume (and general market sentiment) has picked up across the board. Overall liquidity and volumes in the market have improved significantly compared to numbers in the previous Q3 State of Liquidity Report, indicating the return of market participants and institutions.
We’ve seen the resurgence of activity in the Solana ecosystem as well, fueled by significant airdrops such as Jito and Pyth, while memecoins such as Bonk and dogwifhat have attracted retail back onchain to speculate.
Figure 1: Top 15 CEXs and Top 4 DEXs from CoinMarketCap Ranking.
Figure 2: This aggregated trading volume from Top 15 CEXs and Top 5 DEXs from CoinMarketCap, not total volume overall, and is meant to be context for Figure 1.
Figure 3: Frequent Listers (101 or more listings per quarter)*
Figure 4: Active Listers (11-100 listings per quarter)*
Figure 5: Exclusive Listers (0-10 listings per quarter)**CoinMarketCap Top 15 by trust score, with the exception of Bitflyer (and addition of MEXC, as this is a common exchange for new listings). Data on previous listings are pulled from various data feeds and cross checked against exchange announcement pages, their spot trading platforms, and X. Leveraged tokens, rebrands and migrations are excluded.
Compared to our last report in Q3 2023, listing activity picked up significantly across the board, with multiple exchanges jumping into new brackets due to improved listing numbers. The rise in listing volumes reflects the warming sentiment of the general crypto market.
As trading and listing volumes pick up, projects that have held out from TGE during the bear market are starting to launch their tokens and release airdrops to crypto market participants. This has, in turn, also helped to inject fresh liquidity and attention back into the market.
At a glance, MEXC is still leading significantly by a huge lead (several multiples of the competition even on a quarterly and yearly basis), while most exchanges with the exception of Bithumb, Coinbase, Gemini and Upbit saw improved numbers quarter-on-quarter.
Here’s a summary of the main movements:
To provide an overview of the overall state of market liquidity, we survey the top 1000 tokens as listed on CoinMarketCap and detail liquidity metrics across their respective top 3 exchange venues.
Figure 6: Top 1000 tokens ranked by volume of top performing exchange
Compared to our data in Q3, Daily Average Volume for the top 4 rank groups (1-400) nearly doubled in volume while the other ranks also increased substantially, indicating an uptrend of trading activity across the board. Additionally, increased depths and lowered spreads can be observed – attributed to the larger trading activity for the last quarter of 2023.
Similar to Q3, liquidity is heavily concentrated in the top 100 tokens in terms of (1) daily trading volumes, (2) market depth and (3) spread across the top 3 exchanges for the tokens.
Figure 7: Comparison stats for Notable Listings in Q4*Neutron and Ordinals were not included as they were already listed on other exchanges before this quarter
We chose the most notable tokens based both on peak FDV and the ones listed by top exchanges; as well as the amount of community engagement, general reception and interest. There is quite bit of variation in their engagement numbers depending on their protocol type, particularly if it was consumer facing, as well as how much money they had raised.
Figure 8: Daily Trading Volume of Q4 Notable Listings
Figure 9: Spread of Notable Listings in Comparison to BTC and ETH
Figure 10: Depth Charts for Notable Listings in Comparison to BTC and ETH. (Note the different magnitude of x-axis scale)
Figure 11: Price volatility of Q4 notable listings
Several developments in Q4 of 2023 (such as the Bitcoin spot ETF, regulatory clarity and liquidity injection via airdrops) contributed greatly to the warming sentiment and rising volumes across exchanges for listings and trading. We’ve seen both CEX and DEX volumes nearly double from their lows in Q3 2023 while market share continues to redistribute away from leaders as new narratives emerge.
New upcoming ecosystems will be interesting to watch, as the resurgence of the Solana ecosystem draws attention towards new blockchain competitors and renewed onchain activity – such as on Move (Aptos, Sui) and Cosmos (Celestia, Injective, etc) ecosystems. Recent airdrops like Jito have also been highly lucrative. We expect to see more of such airdrops in 2024, as projects building through the bear market capitalise on the returning attention to the crypto market and launch on mainnet.
This post is for general information purposes only. It does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice or investment recommendations. This post reflects the current opinions of the authors and is not made on behalf of AlphaLab Capital Group or its affiliates and does not necessarily reflect the opinions of AlphaLab Capital Group, its affiliates or individuals associated with AlphaLab Capital Group. The opinions reflected herein are subject to change without being updated.
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