Crypto Liquidity: How to Find a Reliable Provider?

FinanceFeeds Editorial Team

Meanwhile, the crypto market undergoes an explosive splash, and the number of holders exceeds 300 million globally. The industry is a perfect chance for newer business owners who want to follow the trend. Liquidity is still of much concern, as the market is relatively young and trading volumes are much lower when compared to the FX market.

While speaking of liquidity for brokerage businesses, the FX industry is the first association that comes to mind. FX brokers dealing without liquidity providers frequently offer worse conditions for traders.

CFD Vs Spot liquidity: what is the difference?

Speaking of crypto liquidity, we need to distinguish two instruments: CFDs and spot digital assets. Liquidity is exceptionally important in both cases, but it works in different ways.

Such instruments mean that a trader doesn’t buy underlying assets. Furthermore, this financial opportunity unlocks leverage and a set of trading tools and analytical options – crypto CFDs are traded on the same platforms as Forex CFDs. Top-rated brokerage companies enable their clients to trade numerous in-demand pairs with BTC, ETH, XRP, and other digital assets, while the role of an LP lies in connecting order books to deep liquidity pools.

What is a liquidity pool for crypto CFDs? That is a network of crypto trading platforms, brokerage firms, OTC orders, hedge funds, and other players that buy and sell large volumes of digital currencies. When an order is placed by a trader, LPs deliver it to market makers that execute requests. The process takes place instantly, and traders avoid price gaps and high spreads specific to brokers with low liquidity.

As for the spot liquidity of digital assets, the notion acts in a completely different way. For instance, a cryptocurrency has its own liquidity within a trading platform, depending on the demand among traders and holders. Furthermore, the overall trading volumes of an exchange show how liquid a platform is. Traders join crypto exchanges with high trading volumes; this is why newer platforms prefer to apply to LPs that connect exchanges to liquidity pools – pools mainly contain some other exchanges.

What are the steps to finding a reliable provider?

Business owners understand what is a liquidity provider in cryptocurrency, but the core steps still lie ahead. You need to find a provider that matches your business goals.

Top-rated providers always unlock access for both crypto spot and crypto CFD liquidity. Which aspects to take into account?

  1. The number of available instruments. Such an aspect refers to CFDs foremost, as contracts for digital assets are considered as rather young instruments. Most LPs provide liquidity for some 10-20 trading pairs, and that is not enough for professional traders. Business owners need to find some market leaders. B2Broker provides liquidity for more than 100 in-demand pairs.
  2. Margin conditions. According to traders, leverage is the core advantage of crypto CFDs; this is why margin requirements do matter. Top-rated LPs provide up to 1:5 leverage; meanwhile, B2Broker enhances opportunities for its clients, offering leverage up to 1:10 for some pairs.
  3. Spreads. Traders know well that lower spreads are better; this is why brokerage companies need to compare spreads. B2Broker offers BTC spreads starting from just $0.1.

While talking about the other important conditions, top-rated LPs guarantee minimal execution time and high-quality 24/7 technical support.

B2Broker is acknowledged as the market-leading liquidity provider for crypto, and more than 50% of brokerage firms having CFDs for digital currencies prefer to deal with this company, as a primary or secondary provider.

Read this next


US and South Korea seek extradition of Luna founder Do Kwon

Both US and South Korean officials are seeking to extradite Terraform Labs CEO Do Kwon, just hours after he was arrested in Montenegro.

Retail FX

Pepperstone UK doubles profit, client assets in 2022

The London-based entity of Australian FX broker Pepperstone has reported its financials for the fiscal year ending June 30, 2022. The group had outperformed the last year’s flat performance, having doubled revenues and boosted the broker’s bottom line and shareholders’ fortunes.

Institutional FX

CLS FX volume rises to just shy of $2 trillion in February

Foreign exchange settlement provider, CLS Group saw strong volumes in February 2023 as the banking crisis continues to weigh on a world economy that’s yet to fully recover from the Russia-Ukraine war’s shocks.

Digital Assets

Binance restores trading after 2-hour outage

Binance suffered a breakdown on its trading engine that lasted for about two hours, but the premier cryptocurrency exchange finally managed to restore normal operations at around 14:00 UTC.

Digital Assets

Tether earns $700 million in Q1, taking excess reserves to $1.6 billion

Tether chief technology officer Paolo Ardoino said the world’s largest stablecoin issuer expects to earn more than $700 million in the January-Mach quarter, which will be added to the reserve backing its stablecoin (USDT).

Digital Assets

Narwhal Finance Secures $1M in Seed Funding Led by Animoca Ventures

Narwhal Finance received strong support from Animoca Ventures and angel investors in a $1 million seed funding round, reinforcing the company’s vision of providing an accessible platform to all.


SteelEye tries ChatGPT for market surveillance

This capability can be used as a starting point for initiating a surveillance investigation and to standardize workflow processes to boost the throughput and consistency of cases. It is also useful when analyzing communications in foreign languages, as the system returns the above insights in English regardless of the languages being used.

Industry News

SEC charges ex-Morgan Stanley advisor of NBA players after $13m fraud

Darryl Matthew Cohen was arrested this week and is facing three different federal counts of fraud, which could amount to 20 years in prison if convicted, besides the SEC complaint. 

Industry News

AWS FinTech Africa Accelerator launched, applications until April 27, 2023

Founders will be offered tech resources, expert guidance, and a global network of industry leaders, technologists, entrepreneurs, investors, associations, and partners, in order to build their fintech products.