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What Market Structure Factors Influence the Bid-Ask Spread of a Cryptocurrency?

Number of market makers, trading volume, liquidity concentration, and market volatility are key influencers.
Greeks.Live14.11.25

What Market Structure Factors Influence the Bid-Ask Spread of a Cryptocurrency?

The bid-ask spread is influenced by factors like the number of active market makers, the total trading volume, the concentration of liquidity on specific exchanges, and the overall market volatility. A high number of competing market makers and deep trading volume generally lead to a tighter spread, while fragmentation across many exchanges can widen it.

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