In his most recent research newsletter, crypto research agency Kaiko hinted at an ‘Alameda Gap’, which has been having a huge impact on the Bitcoin and crypto market for some time now. However, that seems to be a thing of the past, as Kaiko stated that the rift no longer exists.
What the Alameda Gorge is all about
According to the reportThe ‘Alameda Gap’ is the liquidity gap that existed after the collapse of the economy defunct crypto exchange FTX and its sister company Alameda investigation. Alameda was one of the most prominent market makers at the time, bringing enormous liquidity to the market.
After the collapse of Alameda, this liquidity shortage is said to have persisted as market makers “waited on the sidelines for sentiment and trading activity to recover.” Now the market seems to have moved past this as Kaiko revealed that the market depth has almost fully recovered since last week and is back to previous levels. pre-FTX average.
The research firm added that the Bitcoin market depth of 2% has risen 40% this year, briefly surpassing the pre-FTX average of $470 million. This increase is believed to be primarily due to the rise in the price of Bitcoin, which has risen faster than market liquidity since the SEC approved the Spot Bitcoin ETFs in January.
Bitcoin is up about 50% this year and has already reached new highs since the start of the year, including one new all-time record (ATH) of $73,750. Meanwhile, the improvement in liquidity is also reflected in the fact that trading costs have fallen on the three major US crypto exchanges: Coinbase, Kraken and Bitstamp.
How Bitcoin Outperforms Gold
Kaiko also highlighted in its report that the Bitcoin-to-gold ratio, which measures the relative performance of both assets, is moving closer to the ATH, which it last reached in November 2021. Interestingly, this increase means that BTC outperforms goldeven both assets have recorded ATHs the past weeks.
Furthermore, funds linked to these assets show how Bitcoin has outperformed gold. Kaiko noted that Bitcoin ETFs have attracted $11 billion since launching in early January. Meanwhile the largest physically backed gold ETFs (SPDR Gold Shares (GLD) and iShares Gold Trust (IAU). registered outflow during the same period.
Kaiko suggested that this could mean that investors were moving towards Bitcoin as the ‘new global store of value’. Interestingly, while giving reasons why Bitcoin will reach $1 million, Jan3 CEO and Bitcoiner Samson Mow also named that at some point people will demonetize gold and replace it with BTC.
BTC price falls to $62,700 | Source: BTCUSD on Tradingview.com
Featured image from Forkast News, chart from Tradingview.com
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