Auros Executive Highlights Liquidity Concerns Ahead of Consensus Event
Jason Atkins, the chief commercial officer at crypto market maker Auros, has identified market liquidity as the primary challenge facing the cryptocurrency markets, rather than a volatility crisis. Atkins shared this perspective shortly before the Consensus event in Hong Kong.
Analysts have observed that despite a continued increase in institutional interest in crypto throughout 2025, insufficient market liquidity remains a significant barrier. This lack of liquidity prevents large Wall Street players from entering the market without triggering substantial price disruptions.
This situation led Atkins to issue a statement emphasizing that markets cannot claim institutional investors are eager to participate if the necessary conditions for their involvement are not met. He questioned whether these markets are sufficiently robust to accommodate significant institutional demand.
“It’s one thing to say, ‘we’ve convinced them to come now,’” Atkins remarked. “It’s another to ask, ‘Do you have enough room for everyone?’”
Auros's Atkins Expresses Concerns About Crypto Market Liquidity Status
As this discussion gained traction, Atkins reiterated his stance that liquidity has become a key issue in the crypto markets, primarily due to a decline in market interest. He explained that significant sell-offs, such as the October 10 crash, which outpaced the ability of traders and leverage to return to the market, are contributing factors to this trend.
Industry executives pointed out that liquidity providers have shifted their focus from generating demand to fulfilling existing demand. This adjustment means that a reduction in trade activity prompts market makers to decrease their risk exposure. Consequently, this can lead to increased volatility, which in turn results in tighter risk protocols and diminished market liquidity.
Atkins argued that this predicament cannot be resolved when institutions are expected to act as stabilizers in inherently weak markets. He suggested that the current market structure lacks a natural safety net during challenging periods.
This creates a cyclical pattern where volatility, caution, and illiquidity reinforce each other, ultimately suppressing market performance even when long-term yields appear strong.
Atkins clarified that volatility itself does not deter major investors. The problem arises when volatility intersects with weak market conditions. He acknowledged the difficulty of managing volatility in thin markets, where safeguarding investments becomes challenging, and exiting positions is even more problematic.
Institutions Encounter Significant Challenges in the Crypto Industry
Atkins' assessment highlighted that the current conditions in the crypto markets pose substantially greater challenges for institutions compared to individual traders. Moreover, it is important to note that major investors adhere to stringent capital preservation rules, which limits their capacity to absorb liquidity risk.
“At that level of wealth, or if you are a huge institution,” he stated, “it’s not just about getting the highest returns. It’s about getting the best returns while keeping your capital safe.”
Atkins also voiced disagreement with the notion that capital is flowing from crypto to artificial intelligence (AI), arguing that these two sectors are at vastly different stages of development.
Supporting his argument, reports have indicated that while AI has been in existence for a considerable time, the recent surge in interest in AI is unprecedented and is not causing funds to exit the crypto ecosystem.