Market Makers in Crypto: Who Are They and Why Are They Needed in the Market?

Imagine a cryptocurrency exchange without market makers — traders face huge spreads, wait hours for order execution, or can’t find a counterparty for their trade at all. Market makers are precisely those participants who solve this problem by constantly providing liquidity for buying and selling. Their work resembles an invisible engine that ensures market health.

How does a market maker fulfill the role of a liquidity provider?

A market maker in the crypto ecosystem is a professional market participant, a company, or an algorithmic trader that simultaneously places buy and sell orders for the same asset at different price levels. Instead of speculating on the direction of the price, like a regular trader, a market maker profits from the difference between the buy and sell prices — this is called the spread.

The mechanism is simple: the market maker places a buy order for Bitcoin (BTC) at $100,000 and simultaneously a sell order at $100,010. When a trader comes to the market and wants to buy BTC immediately, they take the market maker’s offer at $100,010. When another trader wants to sell, the market maker buys at $100,000. This $10 spread — the margin accumulated over thousands of trades — generates steady income.

Large market makers use high-frequency algorithms and trading bots that automatically adjust these spreads based on current market conditions — volatility, order book depth, demand changes. Thanks to this, orders remain competitive and attract counterparties.

Market maker vs. market taker: roles in one system

On any exchange, two types of participants operate:

Market makers add liquidity by placing limit orders that stay in the order book and wait to be filled. Their goal is to enable trading.

Market takers immediately execute market orders, accepting the prices already set. They remove liquidity but create trading activity.

The symbiosis of these two types creates a healthy market: makers constantly offer opposite orders, takers actively take them, creating demand and updating price data. The result — narrow spreads, quick execution, minimal slippage for all participants.

Who actually works as a market maker in 2025?

The market for market making is concentrated in the hands of a few large firms. Here are the key players:

Wintermute

Wintermute is one of the most active market makers in the industry. As of February 2025, the company managed approximately $237 million in assets, distributed across more than 300 cryptocurrencies on 30 blockchains. The company provides liquidity on over 50 exchanges with a total trading volume of about $6 trillions (data as of November 2024).

Wintermute is known for advanced algorithmic strategies and a versatile approach to market making, but focuses on large and mid-tier projects, paying less attention to niche or very early tokens.

GSR

GSR has been operating in crypto for over ten years and offers a full range of services: market making, OTC trading (OTC), derivatives trading. As of February 2025, the company has invested in more than 100 leading Web3 projects and protocols.

GSR operates on 60+ exchanges but mainly focuses on large projects and institutional clients. For smaller projects, GSR’s services may be economically unjustified.

Amber Group

Amber Group managed trading capital of about $1.5 billion for 2000+ institutional clients (data as of February 2025). The company provides liquidity on numerous exchanges with a combined volume exceeding $1 trillion. Amber Group is known for AI-driven solutions and advanced risk management but requires a high level of client preparation.

Keyrock

Founded in 2017, Keyrock manages over 550,000 trades daily across 1,300+ markets and 85 exchanges. The company offers customized solutions for market making, OTC trading, options services, and liquidity management. Keyrock applies a data-driven approach but lags behind the largest competitors in resources.

DWF Labs

DWF Labs manages a portfolio of 700+ projects, supporting more than 20% of the top-100 and 35% of the top-1000 projects on CoinMarketCap. The company is active on 60+ leading exchanges and works with both spot and derivatives markets. DWF Labs is especially attractive for early projects but has strict requirements when selecting partners.

Why do exchanges need market makers?

A market maker is not just a trader; they are the architect of the market. Here’s what they do for an exchange:

Liquidity at the required level. Without constant orders from a market maker, a trader trying to buy 10 BTC will sharply increase the price or not find a counterparty. With a market maker, such volume passes smoothly and without jumps.

Price stability. Market makers actively adjust spreads during market fluctuations. During panic, they offer buying (stabilize the bottom); during euphoria — offer selling (moderate the rise). This prevents extreme flash crashes on small altcoins.

Attracting traders. Retail and institutional traders prefer exchanges with deep order books and narrow spreads. Market makers create exactly this environment. More traders = higher commission revenue for the exchange.

Launching new tokens. When a project is listed on an exchange for the first time, a market maker provides initial liquidity. This is critical for attracting the first traders and preventing a price crash.

Challenges and risks for market makers

The profession of a market maker involves serious risks:

Market volatility. Crypto moves fast. If a market maker holds a large position in an altcoin and the market turns against them, the algorithm may not be able to adjust orders in time, and the position will start losing money.

Inventory risk. Market makers hold huge volumes of cryptocurrencies to constantly place orders. In a low-liquidity market, the price can fall so quickly that even hedging on other exchanges won’t prevent losses.

Technological failures. Market makers rely on high-frequency algorithms and complex systems. A bug or network delay can cause orders to execute at catastrophic prices.

Regulatory uncertainty. Different countries perceive market making differently. In some jurisdictions, its practices may be classified as market manipulation. Compliance costs increase when a company operates globally.

The future of market making in crypto

Market making is an integral part of the architecture of the cryptocurrency market. As trading volumes grow and products become more complex (options, futures, synthetic assets), the role of market makers only strengthens.

Crypto markets operate 24/7, unlike traditional finance. Market makers provide liquidity on weekends and holidays, maintaining activity levels on exchanges. This is especially important for new tokens and emerging markets.

However, challenges remain: volatility will not disappear, regulation will tighten, and technologies must become more reliable. Successful market makers are those who learn to balance profit and risk, between aggressive algorithms and conservative position management.

Exchanges that can attract and retain reliable market makers gain a competitive advantage. Traders choose exchanges not by logo but by spreads and execution speed — that is, by the presence of active market makers.