Binance Leads CEXs
In Leverage Ratio As Crypto
Bull Run Approaches:
Report
Binance Leads CEXs In Leverage Ratio As Crypto Bull Run Approaches: Report
by Semilore Faleti
3 minutes ago
in Crypto News
0
In the latest insight report by blockchain• Информационные технологии » Информационно-коммуникационные технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн
• Высокие технологии » Информационные технологии и телекоммуникации » Базы данных » Публичная база транзакций » Блокчейн analytics firm CryptoQuant, Binance
presently holds the best leverage ratio as the crypto bull run prepares to
take off.
Despite a major general price crash in the past week, investors and market
analysts remain expectant of massive gains by several digital assets over the
next year in line with historical data. T he leverage ratio of centralized
exchanges presents a crucial factor ahead of this potentially highly bullish
period that promises high market activity.
Related Reading: Crypto And Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin Go Mainstream In 2024: Here Are 5 Major
Trends
Binance, OKX Present Low Leverage Ratio As Other CEXs Show Potential Liquidity
Risks
In the crypto market• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта, the leverage ratio represents how much an exchange’s
open interest compares to its reserve asset. A high leverage ratio means there
is more trading activity relative to reserves increasing the risk of liquidity
issues in volatile market conditions.
Assessing the leverage ratio of centralized exchanges has grown more critical
following the FTX exchange collapse in 2022. A high leverage ratio was a key
contributor to the exchange’s demise as there were insufficient reserve assets
(zero) to back trading activity.
Therefore, monitoring leverage ratios is crucial for assessing the financial
health of exchanges. During a bull market, increased trading activity can
amplify leverage risks, especially if exchanges do not adequately back their
positions with reserves.
With the crypto bull run on the horizon, CryptoQuant reports Binance emerged
among other exchanges with strong reserves in Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin, Ethereum• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Ethereum, and USDT
relative to trading activity.
The Malta-based exchange boasts of a low leverage ratio that has increased
slightly from 12.8 in December 2023 to December 2024, despite a 2.6x increase
in Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin open interest (from $4.45 billion to $11.64 billion). Alongside
Binance , OKX which is a relatively smaller exchange also holds a low leverage
ratio indicating a conservative risk management system.
However, other exchanges namely Gate.io, ByBit, and Derbit present
significantly higher leverage ratios to the tune of 106, 86, and 32,
respectively. This report indicates that Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin and Ethereum• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Ethereum’s Open Interest
on these exchanges are far higher than reserves and may be liable to liquidity
issues in the long run. Source: CryptoQuant
Related Reading: ASIC Targets Binance Australia Over Groundbreaking Case in
Crypto Regulation
Crypto Market• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта Overview
At press time, the total crypto market• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта is now valued at $3.26 trillion
reflecting a 3.34% gain in the past day. Bitcoin• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта » Bitcoin remains the market leader
with dominance levels of 57.1%. The premier cryptocurrency• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта trades at $97,258
following a mild recovery from the mid-week price crash after the US Federal
Reserve announced a possible reduction of its initial four planned interest
rate cuts in 2025 to two citing expected elevated inflation. Total crypto
market• Экономика » Финансы » Платежные средства » Платежные системы интернета » Криптовалюта cap valued at $3.26 trillion on the daily chart | Source: TOTAL chart
on Tradingview.com
Featured image from Webopedia, chart from Tradingview