What are the factors that affect the yield spread formula in the cryptocurrency market?

1 answers

• Foss HenningsenMay 16, 2021 · 4 years ago
  BYDFi, a leading cryptocurrency exchange, has identified several factors that affect the yield spread formula in the cryptocurrency market. These factors include market liquidity, trading volume, market depth, and market maker activity. Market liquidity refers to the ease with which a cryptocurrency can be bought or sold without causing significant price movements. Higher liquidity generally leads to tighter spreads. Trading volume, which measures the total number of cryptocurrency units traded within a specific period, can also impact the yield spread. Higher trading volume often results in tighter spreads. Market depth, which measures the number of buy and sell orders at different price levels, can also affect the yield spread formula. Finally, market maker activity, which refers to the presence of market makers who provide liquidity by continuously quoting bid and ask prices, can impact the yield spread. BYDFi takes these factors into consideration when determining the yield spread formula for its cryptocurrency trading pairs.
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