Crypto Market Makers: Who They Are and Why Trading Without Them Would Be a Nightmare

Imagine a cryptocurrency exchange where no one is ready to buy or sell an asset when you need it. This is exactly the problem that crypto market makers solve — specialists who constantly place buy and sell orders, filling the market with liquidity. Without them, traders would face huge price swings, inability to quickly enter and exit positions, and an overall nightmare trading environment.

Who is behind the stability of the crypto market?

Market makers are market participants (individuals, firms, or financial institutions) who continuously quote prices for crypto assets, simultaneously placing buy and sell orders. Their main goal is simple: to earn the spread between the bid price (bid) and the ask price (ask).

Major players in this field include specialized trading firms (Wintermute, GSR, DWF Labs), hedge funds, and large financial institutions. Retail traders can also participate in market making by placing limit orders on cryptocurrency exchanges.

On centralized exchanges (CEX) and decentralized platforms (DEX), market makers act as true liquidity engines.

How exactly do they do this?

The mechanism of market makers is based on a simple principle: they constantly offer prices, expecting traders to accept them.

A simple example:

• A market maker sees Bitcoin (BTC) trading around $88.36K
• Places a buy order for BTC at $88,350
• Simultaneously places a sell order at $88,370
• The spread is $20 — which is their potential profit

When a trader buys at the ask price or sells at the bid price of the market maker, the latter captures this margin. Multiply this by thousands of trades per day, and you get a steady income.

Automation is key to success: Modern market makers do not trade manually. They use algorithmic bots and high-frequency trading systems (HFT) that:

• Analyze order book depth in real-time
• Monitor volatility and price movements
• Instantly adjust spread sizes based on market conditions
• Execute tens of thousands of trades per second

Simultaneously, they manage their crypto reserves, hedging positions across different exchanges to minimize risks from sharp price movements.

Why do crypto markets need market makers?

Constant availability: Unlike traditional stock markets, crypto trades 24/7. Market makers operate without days off, providing liquidity at all times, even during low activity.

Price stability: Without a continuous flow of buy and sell orders, a single large trade can cause panic or speculation, distorting the price. Market makers smooth out these swings, maintaining a balance of supply and demand.

Support for new tokens: When a project launches a new token, it needs initial liquidity. Market makers provide this service, ensuring traders can trade with reasonable spreads from the start.

Market makers vs. market takers: who is who?

Market makers:

• Place limit orders that remain in the order book
• Add liquidity to the market
• Earn from spreads
• Have an advantage because their orders are executed first

Market takers:

• Immediately execute market orders at the current price
• Remove liquidity from the market
• Pay spreads to market makers
• Provide trading activity that creates demand for market makers’ orders

Both participant types are necessary: makers create trading conditions, takers generate actual trading activity. Together, they form a healthy market.

Top crypto market makers in 2025

Wintermute One of the most well-known algo traders in the crypto market. As of February 2025, manages around $237 million in over 300 assets across 30+ blockchains. Provides liquidity on 50+ exchanges with a total trading volume of about $6 trillions (November 2024).

Pros: broad coverage, reliable reputation, advanced algorithms Cons: focus mainly on large projects, may ignore niche tokens

GSR A veteran of the crypto market with over 10 years of experience. Invested in 100+ leading projects and protocols. Operates on 60+ exchanges, offering market making, OTC trading, and derivatives trading.

Pros: deep experience, focus on long-term support of projects, multi-profile approach Cons: expensive for small projects, primarily targets institutional clients

Amber Group A trading firm managing $1.5 billion in trading capital for 2000+ institutional clients (February 2025). Total trading volume exceeds $1 trillion. Specializes in compliance and risk management.

Pros: impressive scale, AI-based services, powerful risk management solutions Cons: high entry requirements, not suitable for young projects

Keyrock An algo trading company executing over 550,000 trades daily across 1,300+ markets and 85 exchanges. Operates from its platform, offering market making, OTC, options services, and liquidity pool management.

Pros: high trade volume, flexible custom solutions, data-driven focus Cons: less known than giants, higher fees for specialized services

DWF Labs An investment and market-making firm managing a portfolio of 700+ projects. Supports over 20% of the Top-100 and 35% of the Top-1000 projects on CoinMarketCap. Trades on 60+ leading exchanges in spot and derivatives markets.

Pros: extensive investment portfolio, early access to promising projects, competitive OTC solutions Cons: works only with Tier 1 projects, strict selection procedures

How do exchanges benefit from market makers?

Volume boost: Liquid markets attract traders. More traders = more trades = more fees for the exchange. Market makers create conditions that encourage trading.

Tighter spreads: Narrow spreads between buy and sell prices make trading more profitable for everyone. The exchange appears more competitive compared to other platforms.

Price stability: Without market makers, the market can experience sharp price swings. This scares traders. Market makers prevent such swings, making trading more predictable.

Fast execution: Traders value the ability to quickly enter or exit a position. Market makers ensure orders are filled almost instantly.

Easy listing of new assets: When a new token launches on an exchange, it needs immediate liquidity. Market makers take on this task, providing initial trading volume.

What risks do market makers carry?

Volatility and unexpected losses: Crypto markets move rapidly. If a market maker’s position moves against them too quickly, they may not be able to adjust their orders in time and could lose money on the price movement.

Crypto reserve risk: Market makers hold large amounts of assets to provide liquidity. If the asset’s price drops, the value of their reserves decreases. This risk is even higher in low-liquidity markets.

Technical failures: Bots and algorithmic systems are complex technology. Bugs, cyberattacks, latency issues, or server outages can lead to financial losses if orders are executed at incorrect prices.

Regulatory wave: Different countries have varying approaches to market making. In some jurisdictions, it may be considered market manipulation. Compliance costs for global operations can be astronomical.

Final thoughts

Market makers are the invisible heroes of the crypto market. Their constant activity ensures the comfort we experience when trading: narrow spreads, quick execution, stable prices. Without them, the market would be fragmented, expensive, and unpredictable.

However, their work is not without risks. They battle volatility, technical failures, and a constantly changing regulatory landscape. As crypto markets grow and mature, the role of market makers becomes increasingly critical for maintaining stability and accessibility of trading assets.

Understanding how market makers operate helps traders and investors better navigate the market and appreciate the infrastructure that makes their trading possible.