Bitfinex Integrates Blockstream's Liquid Network for More Efficient Trading

Digital asset exchange Bitfinex has integrated Blockstream’s Liquid Network on its crypto trading platform. The Liquid Network is a cryptoasset settlement network which connects crypto exchanges and major institutions throughout the world, in order to facilitate quick and private bitcoin (BTC) transactions.

Liquid Network Facilitates “Rapid, Confidential, Secure” Transactions

As explained in a blog post, published on May 9, 2019, by Bitfinex’s management, the Liquid Network has been developed to meet the demands and requirements of cryptoasset traders. The settlement network aims to provide “rapid, confidential and secure” payment channels, which may be used to conduct Bitcoin transactions among different parties.

According to Bitfinex’s post, crypto traders will be able to “rapidly circulate Bitcoin and USDT” between different exchanges, in order to profit off of arbitrage and price fluctuations. This may potentially “inter-exchange spreads across major trading pairs,” Bitfinex’s blog explains.

In addition to creating tighter spreads, the integration of Blockstream’s Liquid Network will allow traders to “react to trading opportunities” a lot faster “due to significantly lowered settlement times,” Bitfinex noted. Moreover, Liquid Network integration will hide the “amounts and types” of cryptoassets being exchanged - which will “improve confidentiality” and reduce the chances of “front-running.”

Commenting on the benefits of adding the Liquid Network to Bitfinex’s trading platform, Paolo Ardoino, the Chief Technical Officer at Bitfinex, remarked:

Issuing Bitcoin, stablecoins, and various other digital assets under one blockchain platform makes a lot of sense. It reduces the integration burden for an exchange like ourselves, and traders can manage all their assets from a single wallet application. We’re excited to be active on the Liquid Network, and we’re looking forward to watching it develop.

Liquid Network May Be Used To “Tokenize Fiat Currencies”

As noted on Blockstream’s official website, the Liquid Network serves as a blockchain for cryptoaset “exchanges, brokers, and market makers.” As a settlement network, it includes a “Liquid’s Issued Assets feature,” which allows network participants to “tokenize fiat currencies, securities,” and digital assets.

According to Blockstream’s developers, digital assets on the Liquid Network are “traded within the same blockchain environment,” which is similar to the widely-used Bitcoin Core codebase. This helps to reduce the time required to perform integrations and it’s arguably a better option than using “multiple blockchains, clients, and APIs,” Blockstream’s development team states

Institutional Derivatives Volumes Went Cold After Crypto Market Crash: CryptoCompare

  • Institutional derivatives trading plummeted following March's crypto market crash according to latest CryptoComapre report. 
  • Mar. 13 generated the highest daily volumes in cryptocurrency history, generating $75.9bn in trades. 

Volume trading on institutional derivatives plummeted following the crypto market crash in March. 

According to the  CryptoCompare March 2020 Exchange Review, institutional derivatives volumes tanked following the market crash on Mar. 12, which saw the price of bitcoin drop as low as $3,800. Trading volume across institutional exchanges, including CME, declined more than 43% in March compared to the month before. 

According to the report, 

Institutional appetite for derivatives products appeared to decline rapidly following the BTC crash, with CME losing 44% of volume compared to February. Trading volumes totalled $7.36bn in March compared to $13.1bn in February.

cryptocompare march 2020 guideVolume trading across crypto exchanges in March 2020 | Source: CryptoCompare

The report found that CME options trading, which launched in January of this year, have not seen significant improvements in volume and are far from generating the activity seen on rival crypto exchange Deribit. 

Despite the market crash, Mar 13. brought about the highest daily volumes in cryptocurrency history, generating $75.9bn in trades. Lower Tier exchanges accounted for the majority of the volume at $54.3bn, while Top Tier volumes also set a record at $21.6bn in daily trades. 

According to the report, spot volumes surged in Q1 2020, with Top Tier exchanges increasing month-on-month since December 2019. Even with the economic uncertainty of the coronavirus, spot volumes for Top Tier exchanges increased 35% on average vs February.

While crypto experienced its single largest day of volume trading, March’s overall volume failed to reach the same levels of Dec. 2017’s crypto bull run.

The report reads, 

Despite the March price crash, volume levels for these exchanges still haven’t reached those seen in the Dec-2017 bull run. Overall, volumes across all Top Tier exchanges increased 8.0% to $288Bn in March.

Binance was the largest Top Tier exchange by volume in March, trading $63.6bn, an increase of 19.2% over the month before. OKEx generated the second-largest volume of $47.7 bn, down 8.2% from February. Coinbase experienced the largest percent increase in volume trading during March, generating $13.3bn, up 41.9%.

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