Cryptocurrency liquidity has risen another 5%-16% YTD 2019 compared to the entire 2018

1. Cryptocurrency Liquidity
Continues to Improve Into the
"Crypto Spring" of 2019
July 2019

2. Crypto Liquidity Update: Still Higher in 2019
• Crypto currency liquidity has risen another 5%-16% YTD 2019 compared to the entire 2018.
– Analysis reflects 92% of tokens by their market capitalization (240bn USD) as of June 12, 2019
– Unlike during pre-2018 time period, when liquidity was positively correlated with price level,
thus far in 2019 liquidity is no longer dependent on price for major established tokens (BTC,
ETH, XRP, EOS, etc.).
– Instead, rising on-chain transaction count drives liquidity higher, at least for Proof-of-Work
cryptocurrencies (BTC and similar), Ether and more established smart contract/dApps Proof-
of-Stake tokens.
• Some highlights
– Bitcoin, Ether and stablecoins continue to have the highest liquidity.
– Versus all of 2018, BTC liquidity is +8.7%, ETH +10.5%, XRP +13.1%, EOS + 12.5%, Tether
+11.4%.
– Largest liquidity increases: BNB + 144.8%, DAI + 49.8%, LINK + 45.1%, XTZ + 44.2%, BAT
+34.5%, DOGE + 28.5%, ZEC + 21.1%, XLM + 20.5%.
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3. Crypto Liquidity Update by Token Type
• Stablecoins aside, PoW cryptocurrencies continue to lead the market in terms of
liquidity, followed by smart contract/dApps-oriented protocols and
payment/settlement coins.
• The lowest liquidity for now remains in the token group “Other coins”.
• Liquidity increases YTD 2019 vs entire 2018 by token group:
– BTC-similar (excluding BTC): +15.1%
– Smart contracts/dApps coins: +16.2%
– Payment/settlement coins: +12.7%
– Privacy coins: +20.7%
– Stablecoins: +11.3%
– Enterprise-oriented blockchain coins: +6.2%
– Other coins: +4.9%
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4. Technical Note on Liquidity Measure
• Liquidity measure used is a simple transform of the Amihud illiquidity measure
– Amihud price impact (illiquidity) ratio measures trading volume needed to change price
by 1%.
– We use negative of log of the Amihud illiquidity ratio to measure liquidity [1].
– This transform is unitless and we use it to measure liquidity changes over time or to
make cross-token comparisons.
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[1] For details on this liquidity measure, see Sabrina T. Howell, Marina Niessner, and David Yermack, Initial Coin Offerings: Financing Growth with
Cryptocurrency Token Sales, Working Paper, June 21, 2018.

5. Summary of Digital Token Liquidity Trends
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Coin Category
Current Liquidity
(as of
6/12/2019)
Change vs.
One Year Ago
YTD 2019
Liquidity
2018
Liquidity
2017
Liquidity
Change: YTD
2019 Versus
2018
Bitcoin and Similar
BTC 13.51 1.69 13.32 12.25 9.97 1.07
Volume-Weighted AVG (excl. BTC) 11.34 2.51 10.17 8.84 6.57 1.33
Smart Contracts/DApps Blockchains
ETH 12.20 1.46 12.06 10.91 7.89 1.15
Volume-Weighted AVG (excl. ETH) 10.36 1.10 10.01 8.63 NA 1.40
Payment/Settlement Coins
Volume-Weighted AVG 10.40 1.87 10.24 9.09 5.13 1.15
Privacy Coins
Volume-Weighted AVG 8.83 1.90 8.69 7.20 5.24 1.49
Stable Coins
Volume-Weighted AVG 14.84 1.69 15.03 13.58 9.75 1.53
Exchange Coins
Volume-Weighted AVG 9.15 1.69 7.77 3.29 NA 4.76
Enterprise-Oriented Blockchains
Volume-Weighted AVG 9.17 2.27 6.79 6.00 2.79 0.37
Other Coins
Volume-Weighted AVG 6.92 0.24 5.92 5.65 2.25 0.28
Source: CoinMarketCap.com; author's calculations.
Note[1]: Liquidity is computed as negative log of the Amihud Illiquidity Ratio. For details, see Sabrina T. Howell, Marina Niessner, and David Yermack, Initial Coin
Offerings: Financing Growth with Cryptocurrency Token Sales, Working Paper, June 21, 2018. For the original illiquidity ratio, see Amihud, Yakov, “Illiquidity and
stock returns: Cross-section and time-series effects,” Journal of Financial Markets, 2002, 5 (1), 31–56; Amihud Yakov, Haim Mendelson, and Lasse Heje Pedersen,
“Liquidity and asset prices,” Foundations and Trends in Finance, 2006, 1 (4), 269–364.
Cryptocurrency Liquidity Continues to Improve Into the "Crypto Spring" of 2019

6. Liquidity by Token: Details
5
Coin Category
Current Liquidity
(as of 6/12/2019)
Change vs.
One Year
Ago
YTD 2019
Liquidity
2018
Liquidity
2017
Liquidity
Change: YTD
2019 Versus
2018
Market Cap (as
of 6/12/2019
$MM)
Bitcoin and Similar
BTC 13.51 1.69 13.32 12.25 9.97 1.07 144,635
BCH 10.94 1.75 9.67 8.86 NA 0.81 7,069
LTC 11.74 2.65 10.62 9.27 7.19 1.36 8,437
DASH 9.23 1.63 9.12 7.94 5.63 1.18 1,384
ETC 10.27 2.26 9.17 8.52 5.52 0.65 951
Volume-Weighted AVG (excl. BTC) 11.34 2.51 10.17 8.84 6.57 1.33
Smart Contracts/DApps Blockchains
ETH 12.20 1.46 12.06 10.91 7.89 1.15 27,777
EOS 11.25 1.39 10.72 9.53 NA 1.19 5,913
TRX 9.59 1.32 9.25 8.17 NA 1.08 2,242
ADA 7.98 0.55 7.18 7.30 NA -0.12 2,503
NEO 9.60 2.17 8.89 7.83 0.28 1.06 912
XTZ 5.04 1.28 4.44 3.08 NA 1.36 837
QTUM 8.68 0.85 8.68 8.13 NA 0.55 308
STEEM 4.54 0.54 3.84 3.82 2.10 0.03 136
IOST 7.45 1.27 5.45 5.54 NA -0.10 138
HOT 6.35 2.86 5.23 NA NA NA 252
Volume-Weighted AVG (Excl. ETH) 10.36 1.10 10.01 8.63 NA 1.40
Payment/Settlement Coins
XRP 10.74 1.85 10.64 9.41 5.46 1.23 17,076
XLM 9.57 2.87 8.87 7.36 2.73 1.51 2,453
DOGE 8.48 3.54 7.27 5.65 3.18 1.61 368
Volume-Weighted AVG 10.40 1.87 10.24 9.09 5.13 1.15
Privacy Coins
XMR 8.63 2.03 7.41 6.66 5.68 0.75 1,536
ZEC 8.92 1.77 9.07 7.49 4.73 1.58 609
Volume-Weighted AVG 8.83 1.90 8.69 7.20 5.24 1.49
Snaphot of Liquidity Across Major Types of Cryptocurrencies

7. Liquidity by Token: Details, Cont.
6
Coin Category
Current Liquidity
(as of 6/12/2019)
Change vs.
One Year
Ago
YTD 2019
Liquidity
2018
Liquidity
2017
Liquidity
Change: YTD
2019 Versus
2018
Market Cap (as
of 6/12/2019
$MM)
Stable Coins
USDT 14.92 1.71 15.13 13.59 9.75 1.54 3,364
USDC 10.21 NA 9.18 NA NA NA 341
TUSD 11.10 2.82 10.19 NA NA NA 248
DAI 9.26 4.30 7.45 4.98 NA 2.48 83
Volume-Weighted AVG 14.84 1.69 15.03 13.58 9.75 1.53
Exchange Coins
HT 8.08 0.65 6.82 NA NA NA 170
BNB 9.36 1.87 8.05 3.29 NA 4.76 4,897
Volume-Weighted AVG 9.15 1.69 7.77 3.29 NA 4.76
Enterprise-Oriented Blockchains
XEM 6.70 0.73 6.37 6.00 2.79 0.37 775
VET 6.23 NA 5.81 NA NA NA 422
ONT 9.97 2.55 7.07 NA NA NA 704
Volume-Weighted AVG 9.17 2.27 6.79 6.00 2.79 0.37
Other Coins
IOTA 6.76 -0.27 6.20 6.38 NA -0.18 1,214
WAVES 7.24 1.31 6.51 5.51 1.51 1.00 244
BAT 7.20 3.67 6.11 4.54 NA 1.57 424
LSK 5.24 -0.28 5.09 5.36 2.57 -0.27 247
ATOM 7.42 NA NA NA NA NA 1,169
LINK 6.14 3.66 5.25 3.62 NA 1.63 400
REP 6.10 2.34 4.97 4.17 2.83 0.80 205
Volume-Weighted AVG 6.92 0.24 5.92 5.65 2.25 0.28
Source: CoinMarketCap.com; author's calculations.
Note[1]: Liquidity is computed as negative log of the Amihud Illiquidity Ratio. For details, see Sabrina T. Howell, Marina Niessner, and David Yermack, Initial Coin
Offerings: Financing Growth with Cryptocurrency Token Sales, Working Paper, June 21, 2018. For the original illiquidity ratio, see Amihud, Yakov, “Illiquidity and
stock returns: Cross-section and time-series effects,” Journal of Financial Markets, 2002, 5 (1), 31–56; Amihud Yakov, Haim Mendelson, and Lasse Heje Pedersen,
“Liquidity and asset prices,” Foundations and Trends in Finance, 2006, 1 (4), 269–364.
Snaphot of Liquidity Across Major Types of Cryptocurrencies

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