Kaiko Report: BCH Wins Q3 Liquidity Growth Crown, BTC and ETH Lag Behind

Cryptocurrency traders who anticipate market volatility and are looking for the best alternative cryptocurrencies (altcoins) may consider Bitcoin (BTC) fork token Bitcoin Cash (BCH).

That’s because, according to Paris-based crypto data provider Kaiko, bitcoin cash saw the biggest improvement in market liquidity in the third quarter.

Liquidity refers to the ability of a market to absorb a large number of buy and sell orders at a stable price. The greater the liquidity or market depth, the lower the slippage (the difference between the price a trader expects to pay and the price they actually pay), and the easier it is for large traders to execute large orders.

Kaiko's liquidity ranking is based on market depth indicators, bid-ask spreads, and trading volume on "tradable" exchanges. Overall, market liquidity has generally declined since the bankruptcy of Alameda Research in November last year.

BCH tops the list, with AVAX having the highest liquidity consumption. (Kaiko)

The chart shows that Bitcoin Cash’s market liquidity has improved by more than 10% since the second quarter, outperforming other notable altcoins and market leader Bitcoin.

Bitcoin cash prices fell 23% to $234 in the third quarter, a pullback from a 145% gain in the second quarter. BCH is the 17th largest cryptocurrency by market cap and can be traded on prominent centralized exchanges such as Binance, Coinbase, Bitstamp, and institutional-backed cryptocurrency exchange EDX Markets.

The liquidity of Stellar's XLM, TRON's TRX and Ethereum Classic (ETC) also improved. Bitcoin, Ethereum (ETH), XRP, Dogecoin (DOGE) did not change, while BNB Chain's BNB, OKX Exchange's OKB and Toncoin (TON) saw a decrease in liquidity.

“TON performed the worst relative to its market cap as the majority of its volume was on HTX, which was removed due to suspected artificial volume; the token was not considered liquid on any exchange,” Kaiko said in the quarterly report.

Overall, Bitcoin remains the most liquid cryptocurrency, validating its appeal as a safe haven in the cryptocurrency market.