- Memes defy the general rule that higher liquidity results in a tighter bid-ask spread.
- Record liquidity indicates consistent prices and ease of order execution when evaluated by 1% market depth.
- However, bid-ask spreads are still high, indicating that investors still view the tokens as somewhat hazardous.
According to data maintained by Paris-based Kaiko, trading popular meme coins has never been simpler as liquidity, as shown by 1% market depth, has climbed to all-time highs.
According to the data, the total amount for DOGE, SHIB, PEPE, WIF, BONK, GROK, BABYDOGE, FLOKI, MEME, HarryPotterObamaSonic10Inu, and HarryPotterObamaSonic has increased to $128 million. The entire value of buy and sell orders within a 1% range of the current market price is shown in the figure. It is simpler to execute big orders at steady prices the deeper the liquidity, or the higher the figure.
The bid-ask spread—the difference between the greatest price a buyer is ready to pay and the lowest a seller is willing to accept—generally narrows when there is more liquidity. Better trading pricing is ensured and trade execution costs are decreased with tighter spreads. But according to Kaiko, meme currencies aren’t reacting, and on the majority of controlled exchanges, the bid-ask spreads are still more than two basis points.
According to Kaiko, this shows that even though more market makers are attempting to provide liquidity for these coins, their high volatility means that they are still regarded as hazardous.
According to Kaiko in a weekly newsletter, numerous small-cap meme tokens as Dogwifhat (WIF), Memecoin (MEME), or Book of Meme (BOME) have seen considerable rise in liquidity in native units, ranging from 200% to 4000%. However, some of this gain is connected to price appreciations.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
