By Gracy Chen, CEO at Bitget

If we look at headlines alone, the global investment picture still appears healthy. Reports indicate that EMEA remains the world’s largest magnet for cross-border capital on a 12-month rolling basis, with the UK reliably holding the top spot for inflows. At the same time, the International Monetary Fund IMF notes that the overall sentiment about economic prospects remains positive despite global tensions.

But beneath the surface, the picture looks less reassuring. Liquidity is becoming uneven, order books are splitting across venues, and the instruments traders rely on are getting more complex just as the market’s ability to absorb shocks appears to be weakening.

Between these factors, liquidity fragmentation is becoming a very real structural risk that will likely define the next cycle as the global markets move into 2026.

Liquidity Looks Abundant — Until You Try to Use It

We entered 2025 with strong global flows, but most of them were extremely selective. UK large-cap equities still attract global institutions, yet liquidity in small and mid-caps remains shallow.

A report by UK Finance from earlier this year shows that public equity issuance and market capitalization have been declining over recent years, reflecting a shrinking pool of publicly traded, truly liquid companies. As part of that shift, many firms now raise capital via private markets and fewer choose to list, or remain, on public exchanges.

On the surface, nothing is ‘broken’, but in practice, the distribution of liquidity has become increasingly uneven. The depth is concentrated in a narrow set of large names, while smaller companies become harder to trade without causing noticeable price changes. Weak macrodrivers and tighter credit only amplify this imbalance further: it means that speculative flows are not rotating broadly through the markets like they used to.

And this is not just a problem of the UK or Europe — it is visible across borders, and it is growing worse. Markets appear stable yet they’re becoming more brittle.

Tokenisation is Accelerating, But Secondary Liquidity is Not

One of the most misunderstood trends in modern finance, to my mind, is the rise of tokenised real-world assets (RWA). In theory, tokenising property, credit, commodities, or equities should broaden access and improve liquidity. In practice, ownership is becoming easier, but exiting positions is often harder than ever.

Most RWA projects today suffer from thin secondary trading, fragmented standards, and structural bottlenecks. You can tokenise an asset in minutes, but that doesn’t mean that the liquidity for it will just appear out of thin air.

Most tokenised assets end up sitting still on isolated platforms with small user bases, which means there isn’t enough secondary-market activity for any meaningful trades to happen. The number of active buyers and sellers is simply too limited to create real depth.

At the same time, many RWAs come with regulatory or operational constraints (lock-up periods, licensing requirements, settlement frictions, etc.) that have a way of limiting who can hold the asset. And all these rules still hold true even when the asset in question is placed on-chain, which discourages short-term trading even further.

The complexity that comes with tokenisation is that we’re scaling access to instruments faster than we can scale liquidity.

Execution risk is quietly becoming the new systemic risk

If it feels like not so long ago, execution risk used to be a back-office concern. And yet today, it is a core market-structure challenge. Across both traditional and digital markets, the same patterns are emerging:

1. Fragmented order books, especially in Europe, where MiFID-driven venue proliferation has created “hidden liquidity” traders can barely identify.
2. Cross-chain liquidity gaps in digital assets, where order books on Layer 1, Layer 2, and sidechains rarely align.
3. Increasing instrument complexity that distorts price discovery and raises volatility even in otherwise calm markets.

For exchanges, brokers, and institutional desks, this means liquidity might be visible, but not reachable. And in times of stress, unreachable liquidity is the same as no liquidity at all.

What Exchanges Must Do Next

Liquidity depth will not be repaired by waiting for macro tailwinds. The markets have changed too much for that. If we want to fix the underlying issues, then we need an infrastructure designed for the fragmented world that we operate in today. One where liquidity is scattered across venues, chains, and instrument types.

The first step on that path is to create unified liquidity pools capable of aggregating depth instead of forcing it to live in mostly isolated pockets. On top of that, it is crucial to invest in cross-chain routing so that traders can access liquidity wherever it resides.

Most of all, we need to improve trust. Any exchange or trading venue aiming to operate in a fragmented market must provide full transparency — from verifiable asset backing to ongoing execution-quality testing. This way, institutional and VIP traders know they can rely on the system even when conditions become volatile.

The ultimate goal here is to reduce friction and make markets feel whole again, even when the underlying structure is not. Rebuilding liquidity depth in today’s conditions is an engineering problem that requires exchanges to rethink the foundation, instead of just patching the symptoms.

The 2026 Challenge

The greatest risk we’ll face in 2026 is a market structure that looks liquid but starts behaving illiquid the moment pressure rises. If we want global markets to be healthier, we need to rebuild liquidity infrastructure for the system we actually have, not the one we remember.