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Why Is It Difficult to Maintain Sufficient Liquidity for a Single Exchange’s Price to Be Representative?

Liquidity is fragmented across multiple exchanges; a single price is only a partial view and ignores significant trading activity elsewhere.
Greeks.Live24.11.25

Why Is It Difficult to Maintain Sufficient Liquidity for a Single Exchange’s Price to Be Representative?

Liquidity naturally fragments across multiple trading venues in the crypto space. No single exchange typically captures the entire market's trading volume.

Therefore, a price from one venue, even a large one, is only a partial view of the total market. Using a single price for settlement would ignore significant trading activity elsewhere, making it unrepresentative.

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