- The value of Bitcoin and Ethereum on the Binance US exchange being at a lower level compared to global market values has raised concerns within the community.
- These concerns are based on a worrying trend defined around market makers withdrawing from the US market.
- The market balance is now under threat as Jane Street and Jump Crypto are reportedly considering moving their operations outside of the US.
Early today, the prices of Bitcoin and Ethereum on Binance US exchange being below the market prices caused concerns.
Prices Decline on Binance US Exchange
The value of Bitcoin and Ethereum on the Binance US exchange being at a lower level compared to global market values has raised concerns within the community. While the Bitcoin price appeared at a level of $26,970, significantly below the global market value of $30,188, the Ethereum price appeared at $1,666 on Binance US, while trading at $1,861 in the global markets.
These concerns are based on a worrying trend defined around market makers withdrawing from the US market. These market makers play a vital role in the smooth buying and selling of coins and maintaining a healthy level of liquidity. The departure of these institutions may have implications, particularly for hedge funds that have made significant investments in specific alternative coins, and it could indicate a decrease in confidence in the US market.
Market makers fulfill an important role by constantly buying and selling cryptocurrencies, narrowing the gap between buy and sell orders. This continuous activity promotes market efficiency and enables investors to execute their transactions quickly.
However, the balance is now under threat as reports from Bloomberg suggest that two major US market makers, Jane Street and Jump Crypto, are considering moving their operations outside of the US. Both firms have historically provided liquidity for major cryptocurrency exchanges such as Coinbase, Kraken, and Binance US.
The proposed exit by Jane Street and Jump Crypto could be followed by increased regulatory scrutiny, particularly due to alleged connections with the FTX and Terra Luna Crisis. While both companies do not plan to completely exit the crypto industry, they are considering scaling back their operations in the US.
Uncertainty Looms over the Crypto Market
The US Securities and Exchange Commission (SEC) has played a significant role in shaping this evolving scenario. Companies like Coinbase, Ripple, and Binance, despite cooperating with the SEC, face allegations of selling unregistered securities. This inconsistent regulatory approach and the resulting uncertainty have created a chaotic and insecure environment.
The withdrawal or downsizing of market makers from the US market would have significant consequences. A notable decrease in market liquidity can lead to increased price fluctuations and reduced market efficiency.
