Introduction

The data sample

The comparison method

Total buy orders (price to -2%) per exchange lower than 10K USD

Order book depth is a fairly new metric to compare exchanges. It measures the volume of orders in exchanges’ order books and is intended to be a better comparison method of exchanges’ liquidity than a ranking by trading volume. I introduced order book depth in January 2019 and also analyzed in a follow-up article that there is no correlation between trading volume and order book depth. In this article, I want to apply this comparison method and present a ranking of exchanges based on a data snapshot I collected recently.Fortunately, with Coingecko and Coinpaprika, two exchange ranking sites have stepped up this year and implemented order book depth as an additional measurement for liquidity. This empowers users to compare liquidity across exchanges in a much simpler way than to open the exchange and compare order books manually. Since Coingecko integrated the order book depth feature for 50 more exchanges than Coinpaprika, I chose to use Coingecko’s data for this analysis.I made a snapshot of all exchanges’ order book depth as displayed on Coingecko on August 25, 2019. Of a total of 354 exchanges listed on Coingecko, 183 exchanges’ order books were integrated into Coingecko. Of these 183 exchanges, I excluded 4 exchanges because they are (partly or entirely) using the same order book than a larger exchange: Upbit has Bittrex’ order book integrated into their exchange and Bequant is using HitBTC’s order book. The order books of Huobi Korea, Huobi US and Huobi Global also looked similar. Therefore, I decided to exclude Upbit, Bequant, Huobi US and Huobi Korea from this analysis and only display the order book depth of Bittrex, HitBTC and Huobi Global. Furthermore, I decided to manually adjust HitBTC’s order book depth, since their reported liquidity was way higher than their balance in hot and cold wallets suggested. This leaves us with a dataset of 179 exchanges.Coingecko offers data on order book depth of the buy side and sell side within a 2% range of the current price. So, “-2% depth” is the sum of all buy orders in USD not further away than 2% of the current price, while “+2% depth” is the sum of sell orders in USD not further away than 2% of the current price. Just to give you an example: With a market sell of BTC worth 4.3 million USD on Bitstamp at the time of the snapshot you would have hit all buy orders, that were not lower than 98% of the current price.While Coingecko offers both buy orders and sell orders on integrated exchanges, I decided to only use buy orders for this analysis, since it seemed like most coins and tokens, especially the ones with smaller market caps, had way more orders on the sell side than on the buy side. To compare exchanges, I therefore used the sum of all buy orders on an exchange within a range of 2% of the current price in each trading pair.Let’s start with the lowest liquidity exchanges. 22 exchanges of the considered 179 exchanges had less than a total of 10k USD in buy orders within 2% of the current price across all trading pairs. Most of them offered hardly any liquidity at all, while others only had decent liquidity in trading pairs with their own exchange token. See all 22 exchanges in the following graphic: