What Does a Market Maker Do For Crypto?
Market makers create liquidity in financial markets. These firms act as middlemen between buyers and sellers of financial assets, submitting a high bid and a low ask in order to attract traders. These firms can be hedge funds, private firms with the necessary expertise, or brokerage houses with a sufficient volume of orders to provide liquidity.
Liquidity is essential for crypto projects and new tokens to succeed. Without it, the project will have a hard time getting listed on a crypto exchange and gaining traction among investors. In the crypto world, liquidity crunches occur constantly, and entrepreneurs who don’t have a market maker on their side are at a distinct disadvantage.
A market maker crypto role is to ensure that a token can be traded quickly and for the best price possible. These firms can also help newly-listed tokens gain a foothold in the market and increase trading volumes organically.
The most popular market making crypto firms include GSR (hiring across the US, London and Singapore), Kraken or Kairon Labs. They have years of experience in the space and have built a strong reputation.
They have a specialized knowledge of the cryptocurrency market and can help projects with their liquidity needs, such as offering a pre-ICO token sale that ensures an ample supply of a token’s demand. They can also work with individual projects to ensure a token has enough liquidity for its launch on an exchange.
Founders of crypto projects should always consider market making requirements when planning their budgets for an ICO. They should include a crypto market making service in their plans to help their project achieve liquidity, and they should make sure that the firm they choose is well-established and reputable.
Most cryptocurrencies need a dedicated market making service to enable their tokens to be traded. In addition, some market makers offer partnership-based models that help early-stage crypto projects to establish liquidity and accelerate ecosystem growth.
These firms have partnerships with exchanges that allow them to make a profit by providing liquidity for their clients’ orders. In return, they offer a certain percentage of their profits to the exchange’s token holders.
There are several ways to become a crypto market maker, including applying to market making programs at various exchanges, or opting-in for a market making program offered by your chosen platform. In either case, the process can be daunting, but is rewarding in the long run.
A crypto market maker provides liquidity for a digital asset in a crypto exchange by submitting a high bid and low ask for the asset, creating a difference in the asset’s price between the highest ask and lowest bid. This difference, or spread, is what makes a market maker a profitable crypto trader.
They are also able to provide liquidity for an ICO, helping to get its tokens listed on a crypto exchange and attracting investor interest. Moreover, they can also act as a back-up solution for tokens with limited liquidity.
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