An analyst at Kaiko said that the apparent reduction or exit of trading by Jane Street, and Jump Crypto, both influential cryptocurrency market-makers, could disrupt the fragile flow in liquidity throughout the industry.

Bloomberg reported on Tuesday that Jane Street and Jump have scaled back their crypto trading in the U.S. amid the regulatory crackdown that followed the collapse of FTX in November. Bloomberg reported that Jump’s crypto unit will continue to grow globally, while Jane Street plans to scale back its growth.

Riyad carey, Kaiko’s analyst, told CoinDesk that the news was not surprising. What’s worrying is that the liquidity still hasn’t recovered from Alameda, and any slowdown by two of the largest surviving market-makers could further weigh down liquidity. It’s surprising how slowly the industry has filled Alameda‚Äôs shoes.

After the collapse of FTX, market depth, a metric that measures liquidity by assessing the amount of capital required to move a particular market, has fallen by over 50%.

The exodus of Jane Street and Jump is not a concern for crypto-native firms, unlike traditional firms.

Zahreddine Touag is the Head of Trading for Woorton in Paris. She told CoinDesk that there has been no significant impact. “In the near term, there will be less liquidity on some exchanges but it will also be harder for US counterparties sourcing OTC liquidity.”

He added, “We could see this in the future as brokers, payment providers and others looking for liquidity begin to shift offshore or to Europe and Asia.”

The United States has been criticized by the likes Coinbase CEO Brian Armstrong for its gung-ho attitude towards crypto regulation. However, the long-term effects could be far greater than the short-term fears.

A lack of liquidity in the crypto industry, as a result of several market makers leaving, will cause an increase in volatility, as it requires less capital to move a particular asset. The high leverage of the crypto markets combined with this lack of liquidity could create a credit threat that spreads to other sectors of finance.

Stephen Alpher edited the book.