In its early days the crypto market provided a lot of opportunities for pioneers exploring the industry.
Yet, even after several market cycles, the number of tokens doubled throughout 2022, compared to 2021, and currently they stand at more than 12,000!
So, what spiralled such a massive growth?
In fact, the answer is quite simple and has a strong correlation with a lack of high barriers and strict regulation, coupled with elevated interest from new users. In its turn, the rapid growth gave way to emergence of a highly competitive environment in such a short time, requiring projects to show operational efficiency and real-world token utility.
To answer the challenge tokenized projects are partnering with crypto market makers, institutional players that provide liquidity and create an efficient environment for market participants.
Who is a Crypto Market Maker?
The “market maker” concept has its origins in the traditional marketplace. A crypto market maker is an essential part of trading infrastructure, enabling investors and traders to buy and sell any asset at roughly the same price at any given time.
By bringing liquidity to the market they make it more viable and appealing to all participants, both on CEX and DEX.
Who Needs to Partner With a Crypto Market Maker?
As mentioned earlier, a liquid environment is essential for any project to get off the ground properly. A strong market is naturally more attractive to traders and investors, so cryptocurrency tokens and exchanges with high levels of collateral and liquidity are bound to be successful.
Market Making for Crypto Exchanges
No crypto exchange has the potential to keep a fair trading environment for a long time without a weighty market maker. Liquidity is the point of attraction and an indicator of performance for any exchange, serving as a green light to investors and projects which are going to be listed.
- MM for CEX. Let’s look at an example that perfectly demonstrates why centralised crypto exchanges need to create a market. A trader places an order on an illiquid CEX -> the order takes a long time to execute because there is no trading activity -> then the order is executed but with a high slippage -> the trader has no choice but to move to another crypto exchange. In this case, the mission of a market maker includes minimizing bid-ask spreads, maintaining trading activity, increasing order book depth and preventing sudden market manipulation.
The more liquid the exchange, the more new token listings it attains. A sustainable trading ecosystem is exactly what token emitters are seeking for. You must take the liquidity of the exchange seriously if you want it to thrive and grow. - MM for DEX. Although market making is usually associated with centralized markets, there is some work on decentralized platforms that can only be done by such a dedicated trading firm.
The liquidity on a DEX is maintained by an automated market maker, hence all the market making is related to the management and creation of liquidity pools. Crypto-trading firms create liquidity on decentralized exchanges to prevent the possibility of manipulation, thereby encouraging users to make their own deposits into the pools.
Market Making for Tokens
No matter whether the token is listed on an exchange or just about to be, partnering with a crypto market maker is crucial for effective operation on any cryptocurrency exchange.
Having a liquidity provider will solve the following issues:
- Price and trading volume support
- Orderbook management
- Extra profits from arbitrage trading
- Built-in algorithms for liquidity risk management
- Involving more active investors to your project
- Pre-launch and after-launch assistance
The crypto-marketing ecosystem is diverse, with multiple operators in different markets. So how do you choose the one with profound experience and clear understanding of the market?
Say “Hello” to Bitquant!
BitQuant Capital is a value-driven market maker and one of the top-ranked crypto trading firms, focusing on providing liquidity for digital token projects and exchanges, including CEXs and DEXs.
Since 2019 we have been genuinely pursuing our mission – to be a fair and reliable player helping different token & exchange projects of all sizes to get the necessary liquidity and support on the way to their goals.
Our key competitive advantage derives from our strong quantitative approach, team expertise, and significant investment in groundbreaking technologies.
What makes Bitquant such a great story?
Bitquant is more than a market maker – it is your ecosystem rock-solid partner.
- Realistic goals and expectations from both sides – We are clear in our communication and operationally transparent . We aim to fully understand our clients’ requirements in order to fulfil their needs in the fastest and most financially efficient way possible.
- Competitive pricing – We help your business to grow and move forward at the most competitive cost on the market. It is in our best interests to ensure our efforts will get the best result for your investment.
- Personal touch – Tell us what your needs are and we will come up with the best fitting strategy. Thanks to our agile algorithms, we can actively adapt your trading strategy based on the market conditions, business objectives and growth stage of your venture.
- Expertise – In business since 2019, we’ve experienced both successes and failures, deriving valuable lessons from the latter. So far, we’ve managed 12 successful token launches.
- Reliable partners – We have developed an extensive trading ecosystem which provides liquidity for a wide range of trading pairs across top centralized and decentralized exchanges, such as Binance, Bitfinex, KuCoin, etc.
Conclusion
One of the most enduring challenges for projects in the crypto industry, along with development, is finding the right and trustworthy partnership with the market maker and liquidity provider.
Market makers are a critical component of the digital asset ecosystem, compelling all highly liquid exchanges and token projects to use their services.
The best way to kickstart your market making strategy is to consult with an expert first. Fill out a short form to receive a free consultation from one of Bitquant’s professionals. Or take a look at our website to fully explore our services and solutions.