Cryptocurrency Market Faces Liquidity Challenges Amid Growth

According to Odaily, Arthur Azizov, founder of B2 Ventures, has highlighted significant liquidity issues within the cryptocurrency market, despite its total market capitalization reaching $2.49 trillion and projections of $5.73 trillion by 2033. Centralized exchanges experience rapid order book shrinkage during market volatility, particularly affecting tokens outside the top 20 by market cap. These tokens suffer from liquidity dispersion across various exchanges and lack a unified pricing mechanism. During the market crash in 2022, even major tokens faced notable slippage on leading exchanges. The recent flash crash of Mantra's OM token further underscores the potential for market depth to vanish under pressure. Experts suggest that solutions should originate at the protocol level, utilizing native cross-chain bridging and unified liquidity routing technologies, which some Layer 1 networks have already adopted, to address the fragmentation. Currently, 70%-90% of stablecoin trading volume is conducted through automated trading, with technological barriers gradually being overcome.