In its early days, the crypto market offered many opportunities for pioneers exploring the industry.
However, even after several market cycles, the number of tokens in 2022 has doubled compared to 2021 and currently stands at more than 12,000!
So what triggered such massive growth?
In fact, the answer is quite simple and correlates strongly with the lack of high barriers and strict regulation coupled with increased interest from new users. Rapid growth, in turn, gave way to the emergence of a highly competitive environment in such a short period of time, where projects had to demonstrate operational efficiency and real-world token utility.
To meet the challenge, tokenized projects partner 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 roots in the traditional marketplace. A crypto market maker is an essential part of the trading infrastructure that allows 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 attractive for all participants, both on CEX and DEX.
Who Needs to Work With a Crypto Market Maker?
As previously mentioned, a fluid environment is essential for any project to get off the ground. 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 thrive.
Market making for crypto exchanges
No crypto exchange has the potential to maintain a fair trading environment for long without a weighty market maker. Liquidity is the center of attraction and a performance indicator for any exchange, serving as the green light for investors and projects to list.
- MM for CEX. Let’s look at an example that perfectly illustrates why centralized crypto exchanges need to create a market. A trader places an order on an illiquid CEX -> the order takes a long time to be executed because there is no trading activity -> then the order is executed but with a high slippage -> the trader has no choice but to another crypto to switch exchange. In this case, a market maker’s mission includes minimizing bid-ask spreads, maintaining trading activity, increasing order book depth and preventing sudden market manipulations.
The more liquid the exchange is, the more new token listings it will receive. A sustainable trading ecosystem is exactly what token issuers are looking for. You have to take stock market liquidity 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.
Liquidity on a DEX is maintained by an automated market maker, therefore all market making relates to the management and creation of liquidity pools. Crypto trading firms create liquidity on decentralized exchanges to prevent opportunities for manipulation, thereby encouraging users to make their own deposits into the pools.
Market making for tokens
Regardless of whether the token is listed or about to be listed on an exchange, partnering with a crypto market maker is essential for effective operation on any cryptocurrency exchange.
A liquidity provider will solve the following problems:
- Price and trading volume support
- order book management
- Additional profits from arbitrage trading
- Built-in algorithms for liquidity risk management
- Engaging more active investors in your project
- Support before and after launch
The crypto marketing ecosystem is diverse, with multiple operators in different markets. So how do you select the one that has in-depth experience and a clear understanding of the market?
Say hello to Bitquant!
BitQuant Capital is a value-oriented market maker and one of the leading crypto trading companies focused on providing liquidity for digital token projects and exchanges, including CEXs and DEXs.
Since 2019, we have been seriously pursuing our mission – to be a fair and reliable actor, helping various token and exchange projects of any size to get the necessary liquidity and support on the way to their goals.
Our key competitive advantage stems from our strong quantitative approach, team expertise and significant investments in breakthrough technologies.
What makes Bitquant such a great story?
Bitquant is more than a market maker – it’s your rock-solid partner in the ecosystem.
- Realistic goals and expectations from both sides – We are clear in our communication and operationally transparent. Our goal is to fully understand our customers’ requirements in order to meet their needs in the fastest possible and most financially efficient manner.
- Competitive pricing – We help your business to grow and advance at the most competitive cost in the market. It is in our best interests to ensure that our efforts achieve the best outcome for your investment.
- Personal note – Tell us what your needs are and we will develop the most suitable strategy. Thanks to our agile algorithms, we can actively adapt your trading strategy based on market conditions, business goals and the growth phase of your company.
- expertise – We have been in business since 2019 and have experienced both successes and failures and learned valuable lessons from them. So far we have performed 12 successful token launches.
- Reliable partners – We have developed an extensive trading ecosystem that provides liquidity for a wide range of trading pairs on leading centralized and decentralized exchanges such as Binance, Bitfinex, KuCoin, etc.
Conclusion
One of the most consistent challenges for projects in the crypto industry, besides development, is finding the right and trustworthy partnership with the market maker and liquidity provider.
Market makers are a crucial component of the digital asset ecosystem, forcing all highly liquid exchanges and token projects to use their services.
The best way to get your market making strategy off the ground is to consult with an expert first. Fill out a short form to get a free consultation from one of Bitquant’s experts. Or take a look at our website for comprehensive information about our services and solutions.
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