BitGo says crypto market fragmentation raises execution risks
BTGO•BitGo says fragmented crypto trading venues can widen price discrepancies during market stress and make displayed liquidity unavailable for execution. It recommends assessing effective spreads, implementation shortfall and realized slippage at expected order sizes.
1. Assessing crypto liquidity
BitGo’s analysis says actual execution costs are more reliable measures of liquidity than quoted spreads or reported trading volume. It identifies rising order rejections, slower cancellations and widening cross-venue price gaps as possible signs of deteriorating liquidity before visible depth changes.
2. Venue-specific risks
The analysis says centralized exchanges carry counterparty risks, while decentralized venues face smart-contract, oracle and transaction-ordering risks that can impair execution.
