Often dubbed as invisible hands of the market, crypto market makers allow for fast, flawless and favorable trading of digital assets. Amid a cut-throat competition in the crypto space, where dozens of new projects are emerging daily, exchanges and token developers should consider teaming up with market makers to make their offerings more appealing to both investors and end users.
Your platform or asset might grow if you succeed in managing liquidity, improving price discovery, supporting trading volume, and creating stability even in volatile times. A reputable crypto market maker will help you with all of that, while also ensuring safe and transparent collaboration.
This article features a list of battle-tested firms who proved themselves as the most outstanding and reliable market making service providers. But before we embark on the review, let’s see how exactly crypto market makers reinforce exchanges and tokens and what factors you should take into account when choosing the right partner.
How Can Crypto Projects Benefit From Market Makers?
Working with a well-known and trustworthy market maker has a certain number of advantages, namely:
- Increased liquidity. If an asset is liquid enough, traders and investors can buy or sell their shares with less difficulty and at fair prices;
- Lower risk of hidden price manipulation. Greater liquidity means that malefactors need more money to affect the asset prices;
- Increased trade activity. User interest rises when volatility declines because jarring price fluctuations are less frequent;
- Overall excitement. As soon as the project reaches high trading volumes, it inevitably catches more attention from crypto market participants. There are also market makers who offer some extra promotion services to generate hype around your exchange or token;
- Facilitated listing. If there’s a recognized market maker supplying liquidity for your project, crypto exchanges will be more willing to add it for trading on their platforms.
Criteria For Choosing Your Perfect Crypto Market Maker
Before entering the realm of cryptocurrency trading, it’s crucial to give great thought to the aspects that go into choosing the best crypto market maker. Keep in mind the most important factors to make sure you will feel comfortable with a given firm.
Reputation
To avoid trade failures or delays, you should turn to market makers with a solid track record of order execution. Opt for the firms who fulfill trades timely, regularly and efficiently, with few system breakdowns or other technical glitches. Following the 2022 crypto winter, it’s also essential to check how the certain market maker has survived the latest crypto market turmoil.
Sufficient Liquidity
A strong market maker is expected to offer enough liquidity in the crypto markets, especially during times of severe volatility. This means they need to manage substantial trading volumes without materially affecting the market price. If there is sufficient liquidity, traders can complete deals promptly and at advantageous pricing.
Pricing Structure
Another key factor is the pricing structure of a crypto market maker. Choose the one that provides tight bid-ask spreads, which are the price differences between buying and selling an asset. Narrow spreads are extremely attractive to users, since they reduce the cost of trading and boost possible investment rewards, making trading strategies more lucrative.
Security
The cryptocurrency sector is vulnerable to hacking and online dangers, therefore it’s crucial to select a market maker that places a high priority on enhanced security measures such as cold storage for assets, 2FA, encryption, and recurring audits. Additionally, look into their history of security problems and how they handled any earlier incidents.
Transparency
A big plus would be if a market maker provides a special dashboard with access to all the balances, data about their financial operations, and tools for tracking efficiency. This may help you better evaluate your project’s current performance and make more informed decisions within the framework of cooperation.
Regulatory Compliance
The crypto business puts a big emphasis on regulatory compliance. Select a market maker that abides by the laws and standards that are applicable in the areas in which they conduct business. This includes follow-through on data protection and privacy rules, know-your-customer (KYC) processes, and steps to prevent money laundering.
Customer Support
A responsive market maker should provide such support channels like live chat, email, and phone assistance among other customer care options to promptly answer your questions and fix emerging problems round the clock. It is also crucial that you have help available on weekends and holidays.
4 Best Crypto Market Makers of 2023
The good news is that you don’t have to spend time on exploring the variety of market makers operating in the crypto domain. Adhering to the abovementioned criteria, we ended up with a detailed compilation of the leading market making firms that will definitely amplify your crypto project.
Gotbit Hedge Fund
Gotbit is the first-ever company to offer a hedge fund-style approach to market making in Web3, considering the “your market – your profit” tenet as its top priority. At the core of its service lies the “two and twenty” model, meaning that the firm earns a steady income from the 2% management fee, while market making teams are incentivized to benefit the clients with additional 20% performance fees. As such, the majority of revenue goes directly to the project.
As a market maker, Gotbit uses state-of-the-art AI tools and never halting trading algorithms, introducing the clients to hassle-free work in their selected markets and round-the-clock risk management. The firm’s technical innovation is coupled with a strong expertise of its in-house trading desk who craft individual strategies wrapped around each project’s specs and based on price performance. Since its inception in 2017, Gotbit has supported 70+ CEXs and 50+ DEXs across 21 blockchains and boasts an impressive track record of 370+ successful collaborations.
| Advantages | Concerns |
|---|---|
| Highly skilled team that comprises former traders and managers from Goldman Sachs, Deloitte, McKinsey, and KPMG | KYB for possible clients |
| Clear tokenomics-based work | Up to $50k Funding request |
| AI-powered order execution with high speed and returns you won’t find anywhere else | |
| Exceptionally transparent dashboard for both traders and founders | |
| Weekly optimization of strategies in accordance with the project’s marketing events, updates, and new partnerships | |
| No ownership of market making accounts | |
| Personal approach that implies assigning a separate market making team to each project | |
| 24/7 client support and agile accounting system | |
| Best terms from exchanges and launchpads |
GSR Markets
GSR has been a major part of financial markets since it started in 2013. This market maker has three major areas of expertise which are liquidity providing, risk management, and programmatic execution. GSR’s customized solutions are developed with a thorough grasp of digital assets liquidity provided by an experienced team of specialists, including ex-executives from Goldman Sachs, Citadel, and J.P. Morgan. At its core, the market maker utilizes a system that looks at bid-ask spreads and order book KPIs to make sure it meets its clients’ performance goals. Also, GSR employs different strategies to help founders, miners and exchanges reduce risks and ensure their investments are well protected from volatility. To date, 60+ trading platforms have integrated GSR’s technology to streamline their price discovery processes.
| Advantages | Concerns |
|---|---|
| Works with both startups and established crypto projects | Zero control of the market during the contract period |
| Creates tailor-made strategies for providing deep liquidity across multiple CEXs and DEXs | No profit-sharing (100% of profits made on the token’s market GSR keep) |
| Tracks performance at the most precise level, providing increased transparency and flexibility | Dump risk for middle cap projects during TGE |
| Every trading partner has access to daily market reports, insights, and analytics | |
| Goal-driven approach to market making | |
| Offers specialized mining services with great profit potential |
Amber Group
Amber Group has made investors $500 million in profits since it started operating as a crypto market maker, and it now handles more than $1 trillion in trading activity. In addition to assisting with liquidity providing, Amber Group also participates in over 70 crypto exchanges, applications and networks as miners and validators. For exchanges, it takes on dual roles as a principal and designated market maker, while also providing guidance on initial token offerings and overseeing the post-issue life cycle for token creators. Next to that, Amber Group has launched a platform for personal usage of digital assets called WhaleFin. This solution employs patented execution algorithms and aims to help investors accumulate wealth by providing them with exposure to tight spreads and low fees.
| Advantages | Concerns |
|---|---|
| Operates 24/7 across 150+ countries | Doesn’t support DEXs |
| Works with clients of all sizes | Doesn’t provide an online dashboard |
| Stable, transparent and predictable markets for both cash and derivatives | |
| Hedging systems and risk management in a variety of token models and structures, ranging from “vanilla” to quite sophisticated | |
| Real-time analysis of incoming market data | |
| Robust security: multi-layered cold, warm, and hot wallet infrastructure, certified security levels, fraud detection, and risk monitoring |
Wintermute
Wintermute is an algorithmic trading firm that specializes in digital assets and creates efficient markets for crypto trading platforms. As a liquidity provider, it works with more than 50 CEX, DEX and MM pools, including Binance, Coinbase, Uniswap, and Bybit. On top of that, Wintermute offers analytics and insights into trading activity, as well as off-exchange block coverage. In addition to providing liquidity, the market maker tests and uses its clients’ products, providing them with co-building and advice, while also helping with OTC and treasury. Wintermute is backed by some of the biggest tech and blockchain VC firms out there, including Pantera, Lightspeed, and Avon Ventures. In March 2023, the company recorded a total trading volume of over $3000 billion.
| Advantages | Concerns |
|---|---|
| AI algorithms for spotting the best market opportunities | Wintermute experienced different challenges in 2022, which questioned its resilience to the crypto market upheavals |
| No integration, monthly, or other fees | Doesn’t work with privacy coins |
| Tight spreads in dynamic markets | Were Hacked 3 times during 2022 |
| Support for more than 250 assets | |
| No minimum or maximum order value | |
| Officially registered by the FCA | |
| NODE platform for professional investors |
Crypto Market Makers Will Make Your Project Thrive
In today’s crypto sector, nascent tokens and exchanges can increase their chances for success if they join forces with market makers. They will expose you to all the necessary knowledge and expertise when it comes to providing liquidity or keeping spreads tight.
Prior to selecting the right market maker, carefully analyze a handful of essential variables like reputation, liquidity cushion, pricing, regulatory compliance, security, and transparency. Additionally, assess the firm’s usefulness in light of your own business requirements and preferences.
All in all, market making service providers like Gotbit Hedge Fund, GSR Markets, Amber Group and Wintermute are widely renowned for their proficiency in market creation and liquidity providing.
