Market makers are essential participants in the cryptocurrency markets. They facilitate trading crypto assets by adding liquidity. To work in the crypto market, market makers either partner with large crypto exchanges to participate in their programs (for example, WhiteBIT crypto exchange market making) or become liquidity providers in decentralized finance ecosystems, using computer algorithms and automated market-making software.
Market Making Strategies
The primary strategy for a crypto market maker is to provide liquidity by placing bids (buying prices) and asking (selling prices) for crypto assets in an order book on a crypto trading platform. In such a way, they create a two-way market, allowing other participants to trade assets at their established prices (bid and ask). Market makers should make these prices close to each other, with a minimal spread. The shorter the spread, the more attractive the market is to other traders, and thus, the more orders are fulfilled.
Market makers often handle large trading volumes, earning from collecting spreads from every deal closed. With their activity and large volumes of execution, market makers stand as crucial players in the market that maintain liquidity and price stability.
Market makers must be experienced traders who can adjust to changing cryptocurrency market trends and reduce risks. For that purpose, they use the following strategies:
- Grid trading
- Market making without a hedge
- Delta neutral
- Cross-exchange liquidity mirroring.
Platforms for Market Making
Here are some of the common market-making platforms in the crypto market:
Table: Crypto market-making platforms.
| Platform | The Type of Services | Features |
| Coinrule | The platform for automated trading strategies on top crypto exchanges | Works with a range of crypto platforms Free account option Various subscription tiers User-friendly $29.99 per month subscription No mobile app |
| Coinbase | Crypto exchange with U.S. license | User-friendly Secure Wide range of assets supported (30+) High fees ($0.99–$2.99, 0.50% spread, and 3.99% for debit card deposits) |
| WhiteBIT | One of the largest cryptocurrency trading exchanges in Europe with licenses in multiple European countries | Rebates discounts based on maker volume Low fees: Spot fees -0.010% Futures fees -0.010% 39 futures pairs 357 spot pairs Flexible API Sub-Accounts Colocation Personal 24/7 support via messenger Charts and advanced trading tools |
| Freedom24 | Regulated broker with access to 15 exchanges | Stocks, ETFs, options, futures Interest-earning savings accounts High withdrawal fees Complicated fee structure Lack of customizable charts |
When comparing the features of market-making services provided by different platforms (exchanges and brokers), WhiteBIT seems to be the most compelling proposition due to its low fees, 24/7 customer support, flexible API, and advanced