Top 5 Crypto Market-Making Firms | Rating of Companies
Since the inception of Bitcoin in 2008, cryptocurrency trading has been gaining popularity. Every year, more individual and institutional traders get involved in the crypto industry, mostly investing and trading digital assets via trading exchange APIs. The concept of trading assets like stocks or crypto might appear simple: buy low and sell high. However, the maintenance of an active trading market is complex. The main characteristics are liquidity and a tight spread, and they determine the performance of any given asset, stock, or trading platform. These characteristics are guided by the market makers, that’s why it’s essential to be informed about the list of all cryptocurrency market makers.
Market makers play a key role in ensuring that this procedure goes smoothly behind the scenes. Understanding the function of market makers and liquidity in the cryptocurrency ecosystem is crucial for anyone involved in the crypto industry. The leading market-making firms discussed in this article are at the forefront of this development, given that trading wouldn’t be possible without the liquidity they provide.
Crypto market maker companies and their role
Simply put, a “market maker” is an individual investor or organization who trades in high volumes and has the ability to support the market by providing liquidity. It’s done by submitting both bid and ask limit orders at the same time. The service provider can quote for buy and sell prices of a crypto asset at the same time, as it helps to bridge the gap of prices and ensure liquidity.
It can be said that the market maker is the extra buyer and seller that makes sure orders get fulfilled. They make sure that an asset is operating properly and that other investors can buy or sell at any time and in large volumes without crushing or skyrocketing the price. They offer the liquidity any cryptocurrency exchange needs to function while earning money off the difference between the ask and bid prices.
Healthy liquidity that market makers maintain benefits all stakeholders. The asset is less volatile, and the price is fair. Without market makers, the spread — the difference between the asset’s current market price and the price at which it can be bought or sold — would widen. This typically indicates the asset has low volume and won’t be as appealing to investors. To avoid that, market makers actively facilitate liquidity and maintain tight spreads.
Who are the biggest crypto market makers
There are currently a select few market-making companies with robust features and positive feedback from clients. Let’s compare the leaders of the crypto market-making industry and what they offer.
Gotbit is a hedge fund that began offering market making services in 2017. Currently, the company is developed and operated by a team of 140+ experienced specialists, including investors and consultants. This includes former traders from the American multinational investment bank Goldman Sachs as well as managers from Deloitte, McKinsey, and KPMG. The algorithms of the Gotbit platform have been shown to execute more quickly and produce higher returns than those of other market-making service providers, thanks to the invaluable experience of the experts who built it.
Gotbit provides their clients with access to a dashboard that displays market making activity in real time, bringing the funds management transparency to the highest level. Gotbit’s market making approach provides projects with a full ecosystem in the market. Thanks to artificial intelligence and maths algorithms, end clients are provided with solid risk management, as well as uninterrupted and well-coordinated work in all of the selected markets under a supervision of a professional trading desk.
Every Gotbit’s client has a team of market making professionals assigned to them that creates and revises unique trading strategies. The execution of these strategies is managed by experienced traders around the clock. Gotbit also provides consultation and development services to various startups. They have a huge network of connections between different projects and developers in the crypto industry.
Their solid investment reputation is supported by 50+ successful IDOs, SFOs, VCs, angels, foundations, and private rounds. Client feedback confirms that GotBit provides high service quality and fast execution.
Established in 2018, Kairon Labs provides market-making services as well as exchange listings, advisory, sponsorships, and IP licensing. In the crypto ecosystem, the company is currently working with utility tokens and digital assets, which are traded on hundreds of CEXs and DEXs.
The company has recently collaborated on some notable crypto projects, including the Elastos ecosystem, the blockchain gaming launchpad Seedify (SFUND), and the yield farming protocol Harvest Finance.
The team at Kairon Labs consists of experts in algorithmic trading and highly skilled analysts, and they are working together to ensure that digital projects always have a suitable solution for their liquidity requirements. Kairon Labs also has a vast network of partners, including VCs, launchpads, and exchanges, who offer additional support for the projects they work on.
Wintermute offers an algorithmic approach to market-making in addition to its own OTC trading desk, NODE, and both spot and derivative markets. The NODE was created specifically for professional investors, and it has no execution fees and is accessible via both browser and API.
Overall, Winermute concentrates on early equity rounds and aids curated projects in entering the cryptocurrency market. It offers both DEX and CEX solutions for clients and has vast experience in the DeFi sphere.
Over 200 digital assets are available in spot markets through Wintermute at competitive, customized prices. Funds, brokers, family offices, blockchain projects, OTC desks, and other organizations and qualified individuals are among their partners and clients.
Keyrock is a Belgian crypto startup that was launched in 2017 and now operates internationally. It is a company that actively utilizes its own market-making technologies across important CEX and DEX platforms, which are maintained to be market-neutral and highly scalable.
Keyrock offers liquidity services to tokens, barters, and brokerages within the cryptocurrency ecosystem through a combination of in-house algorithmic trading instruments, high-frequency trading architecture, and industry expertise.
The key advantage of Keyrock is its agile, adaptable business model and inventory sourcing. This reduces the inventory risk and enables them to serve all markets, regardless of starting volume.
Since its inception in 2013, GSR has been a mainstay of contemporary financial markets. It is a multinational company with over 300 employees, many of whom are former executives from Goldman Sachs, Citadel, J.P. Morgan, Two Sigma, and other traditional financial institutions.
GSR uses a methodology based on pre-established bid-ask spreads and order book KPIs, which enables the company to guarantee performance metrics to its clients. Additionally, it uses a variety of risk management techniques to give its clients more hedging options.
GSR also provides specialized services for mining operations in the cryptocurrency space, giving its clients increased yield opportunities. Sixty trading venues, including the top DEXs in the world, are connected to its trading technology.
The importance of market making for crypto projects
Any type of trading in digital assets relies heavily on market makers. They create and develop markets for digital assets while allowing new trading venues to not only survive but also thrive. Market makers’ primary responsibility is to provide the liquidity necessary to maintain the stability of asset prices, which calls for the utilization of cutting-edge technology as well as industry expertise.
Crypto projects, platforms, and assets can benefit from the following advantages by working with a recognized and reliable market maker:
- Higher liquidity. Investors and founders can purchase or sell their positions more easily if the asset has enough liquidity.
- Higher trading volume. Lower volatility leads to increased interest from investors because dramatic price swings are less likely.
- Lower probability of price manipulation. Higher liquidity makes it more challenging to manipulate the asset price because more money is required to affect the prices.
- Higher interest in the asset or project. Increased interest and discussions are generated around the project as a result of higher volumes. Some market makers also provide additional promotional services like exchange listings and strategic partnerships that can grow the project.
- Listing on major crypto exchanges. Knowing that a market maker is committed to providing liquidity round-the-clock, reputable and well-known cryptocurrency exchanges are more likely to list the asset on their platform.