A Comparative Analysis of Market Depth for Futures & Spot on Top Centralised Exchanges By Simplicity Group
This research explores over 16,000 data points to analyse the market depth of 35 leading cryptocurrencies across several prominent centralised exchanges (CEXs): Binance, ByBit, OKX, KuCoin, Coinbase, MEXC, and Bitget. Using raw data obtained via each exchange’s APIs, this research aims to assess whether there is a correlation between an exchange’s brand and the depth of its order books.
The study examines both the average depth of spot and futures markets for each cryptocurrency across exchanges over a four-day period, as well as aggregated depth data for a holistic view of each exchange’s overall liquidity. This approach provides insights into which CEXs may provide the most favourable conditions for trading and token launches based on available order book data.
The analysis reveals several key findings.
1. Exchanges have much deeper order books for certain cryptocurrencies than others, showcasing possible preference. This could stem from a wide array of factors such as differences in chosen market makers or distinct relationships between exchanges and projects.
2. The order book depth for futures versus spot trading on the same exchanges for the same tokens can vary significantly, for example Binance experiencing huge depth for BNB on spot but minimal amounts on futures. This indicates a difference in users between exchanges, whereby some attract more futures traders and others spot.
3. Futures order books in general have greater uncertainties than their spot counterparts, with some exchanges presenting data particularly far from the median. For example, Bitget’s futures order books are heavily bid-dominated, or MEXC’s futures order books are significantly larger than those of other exchanges.
4. Whilst the raw data on market depth may be accurate and accessible, the question of whether those orders are actually executable is one that we cannot assess without risking a substantial amount of capital.
Overall, the exchanges exhibit significant differences in order book depth both across tokens and trading types. Whilst we’re aware of the report’s limitation of purely relying on raw data directly from exchange APIs, we believe these findings provide actionable insights. We hope this research acts as a stepping stone for deeper research into market making strategies and activities of exchanges behind the scenes.
To read the full report click here.