Crypto Market Makers: Who They Are and How They Profit from Spreads

When you open an exchange and see instant order execution for any volume — behind this lies the work of market makers. These specialized traders and algo trading firms create liquidity arteries in cryptocurrency trading, ensuring market stability 24/7. Without their constant presence on the order book, traders would face the impossibility of quickly opening positions, wide spreads between buy and sell prices, and the market would be prone to extreme volatility.

How Market Making Works in Practice

The mechanism seems simple at first glance: a market maker simultaneously places a buy order (bid) and a sell order (ask) for one asset. For example, they place a buy order for Bitcoin (BTC) at $87,000 and a sell at $87,100. The difference in $100 — is their profit margin.

The main principle is continuity. Every time an order is executed, the market maker immediately places new quotes at slightly adjusted levels, adapting to real market conditions. Over the course of a trading day, one market maker can execute thousands of such micro-trades, and the spreads accumulate into a stable and predictable income stream.

The key feature is automation. Most professional market makers use:

• High-Frequency Trading (HFT) — executing hundreds or even thousands of trades per second, instantly reacting to changes in demand and supply
• Trading bots — analyzing liquidity depth, volatility, and order flow to dynamically adjust spreads
• Inventory management — hedging positions across multiple exchanges simultaneously, minimizing risk from sharp price swings

Market Makers vs. Market Takers: Who Is Who

If market makers are liquidity providers, then market takers are consumers.

Market Makers:

• Place limit orders (waiting for execution at their price)
• Earn on spreads, not on price movement
• Want the price to remain stable
• Bear the risk of holding assets

Market Takers:

• Immediately execute orders at the current price
• Pay commissions but open positions quickly
• Want the price to move in their favor
• Risk from volatility

Practical example: a market maker places a sell order for BTC at $87,100. A market taker immediately clicks “buy” at that price, and the trade occurs within milliseconds. The market maker earns their spread, the taker receives the assets.

Healthy interaction between them creates an efficient market: makers provide constant quote availability, takers generate trading volume and demand, which guarantees the execution of these quotes.

Who Dominates Cryptocurrency Market Making in 2025

The market for market making is controlled by several major players using advanced technologies and deep market knowledge:

Wintermute — scale and global coverage

As of February 2025, Wintermute manages approximately $237 million in over 300 on-chain assets across 30+ blockchains. The company provides liquidity on 50+ crypto exchanges with a total monthly trading volume of around $6 trillions (November 2024).

Strengths: advanced algorithmic strategies, broad international presence on CEX and DEX, reliable reputation.

Limitations: may overlook small or niche tokens, less suitable for early-stage projects.

GSR — investments and long-term growth

GSR is a company with over a decade of experience, having invested over $100 million in leading crypto projects and protocols. Besides market making, it offers OTC trading and derivatives services.

Operates on 60+ crypto exchanges worldwide, serving token issuers, hedge funds, miners, and large trading venues.

Advantages: deep support across many exchanges, active investment activities, focus on liquidity management for new listings.

Disadvantages: mainly oriented toward large projects and institutional traders; services for small projects can be expensive.

Amber Group — scaled trading capital

As of February 2025, Amber Group manages around $1.5 billion in trading capital for 2000+ institutional clients. The total trading volume on its platforms exceeds $1 trillion.

Pros: AI-powered services, comprehensive financial services, strong risk management.

Cons: high entry requirements, focus on multiple areas (not only market making), not suitable for emerging projects.

Keyrock — algorithmic precision

Founded in 2017, Keyrock processes over 550,000 trades daily across 1,300+ markets and 85 exchanges. Offers market making, OTC, options desk, liquidity pool management, and ecosystem development.

Strengths: algorithmic optimization, data-driven approach, tailored solutions for different regulatory environments.

Weaknesses: fewer resources than industry giants, less market recognition, potentially higher fees for non-standard services.

DWF Labs — investing and market making in the Web3 ecosystem

DWF Labs manages a portfolio of 700+ projects, supporting 20% of the top-100 and 35% of the top-1000 projects on CoinMarketCap. Provides liquidity on 60+ leading exchanges, operating in spot and derivatives markets.

Pros: ensuring market liquidity, competitive OTC solutions, early-stage project investments.

Cons: works only with Tier 1 projects and exchanges, strict project evaluation criteria.

Why Market Makers Are Critical to the Health of Crypto Exchanges

Presence of quality market makers directly impacts trading quality on any platform:

Liquidity and depth. Market makers constantly replenish the order book with buy and sell orders. This allows traders to execute large positions smoothly, without sharp price jumps. Buying 10 BTC without market makers would require executing multiple orders at rising prices; with them, the transaction happens instantly.

Volatility stabilization. On small altcoin markets with low volumes, market makers smooth out extreme fluctuations. During panics, they support buy demand; during rallies, they limit excessive growth by constantly offering assets.

Price efficiency. Market makers help prices reflect real demand and supply, not speculation or technical glitches. The result is narrow bid-ask spreads, fast order execution, and low transaction costs for all participants.

Attracting traders and revenue. Liquid markets attract retail and institutional traders. More trades = more commissions for the exchange. Many platforms actively attract market makers to support new token listings.

Risks Market Makers Face

Despite steady income, market makers encounter serious challenges:

Market volatility. Crypto markets can move sharply. If the price drops faster than the market maker can adjust orders, they may incur losses. Holding large positions in a rapidly falling market is a source of financial loss.

Inventory risk. Market makers hold large volumes of assets. If prices fall, losses are real and significant. In low-liquidity markets, the risk is higher as prices are more volatile.

Technological failures. HFT systems and bots require perfect synchronization. A delay of 100 milliseconds can lead to executing orders at unfavorable prices. Cyberattacks or system errors can disrupt entire strategies.

Regulatory uncertainty. Market making is regulated differently across countries. In some jurisdictions, it may be classified as market manipulation. Compliance costs can be substantial, especially when operating globally.

Conclusion: Market Makers as the Foundation of Trading

Market makers are not just traders; they are the infrastructure of modern cryptocurrency trading. Their algorithms, capital, and 24/7 activity enable millions of traders to open positions instantly, at fair prices, without panic-induced gaps in supply.

Their role in crypto market making remains fundamental: balancing profit from spreads with volatility risk, creating a more mature and predictable market. As the industry evolves, their importance will only grow, especially in emerging markets and when listing new assets.

But remember: market makers are not philanthropists. They take real financial risks and require fair compensation. Platforms like Gate.io, which attract quality market makers, gain a competitive edge through narrow spreads, high liquidity, and trader trust. This creates a positive growth cycle for the entire ecosystem.