The year 2022 has seen downsides in the crypto market and has been the most eventful year in the history of cryptoverse. While technologists are struggling hard for the mass adoption of cryptocurrencies, the market fluctuations and multiple crashes caused due cyber attacks, fraudulent activities, and loopholes in risk management have shaken the big market players badly. On this verge, Crypto Market Maker Companies are trying to bring stability and gain the trust of investors once again.
As we know, Bitcoin saw an 80% reduction in value from its peak value in 2021. Probably, there were some social, political, and economic reasons, such as the UKraine-Russia war, volatility in energy markets, and high global inflation. Despite it, Market Making Services were trying to beat the crypto winter with its full potential. Those using Crypto Market Making Software were not hit by the changing scenarios in the crypto world. It helped the investors to move forward fearlessly, rather than stepping back. Market Making Software crypto users remained firmly entrenched in securing long-term perspectives amidst the adversities.
After seeing the worst condition of crypto markets in 2022, the investors are faithful about the market rebound to 2019. According to a crypto exchange, Bitbank, during the second half of 2023, the price of Bitcoin is expected to reach somewhere between $20,000 to $50,000. It will become possible easily if the hike in interest rates is stopped or lowered by Federal Reserve in 2023.
Before moving ahead with deeper discussions about the role of Crypto Market Maker Companies in bringing back the confidence of traders and investors, it’s necessary to understand the basics of market making.
In simple words, market making is a process in which two-sided quotes are provided, namely, bid and asks. The quote size is also mentioned for an asset in exchange. This act helps to increase the liquidity of the exchange and helps the buyers and sellers, who might feel a bit worried about the decreased pricing and shorter market depth. In general, Market Making Software Crypto users are benefitted from the bid-ask spread. For instance, a crypto holder buys an asset for $10 and sells it for $11. While doing so, he accepts the risk of the price drop in a highly volatile crypto market, but it also helps in making a bid-ask spread.
Crypto Market Making Software helps investors to expose two-sided quotes to the market, based on the ups and downs of the pricing structure. However, the way Market Making Services function may vary, based on the technology it uses, adherence to KPIs, experience, liquidity provisioning, exchange integrations, as well value-added services that include OTC trading, strategic investments, and treasury services.
Here are some of the significant benefits of relying on the Market Making Services:
Let’s first understand the meaning of ‘Spread’. It’s the difference between the price offered by the market maker for buying a crypto asset and the price offered to sell it further. Generally, Market Making Services or software will offer a buying price lower than the current market price and offer a selling price that matches the current market trends. For instance, if the spread on a crypto asset is $0.05, the Market Making Software Crypto user can offer $9.98 for buying a crypto asset that is already worth $10, and then sell it for $10.03. This is how the Crypto Market Making Software user can make money via the spread.
Even if the spread is trivial, the crypto market makers will keep themselves engaged in handling multiple trades on the daily basis, and earn a handsome profit effortlessly. On a spread of $0.05, the trader will earn $5000 for trading assets worth $5 million. As it seems to be a complex task, many crypto traders either use software products or services for market making solutions.
Interestingly, the role of market makers is to offer liquidity to the exchange, and they do it simply by buying and selling the assets. They don’t store the crypto assets for future use, rather they spend them immediately before the volatility affects the market, as it might result in a big loss. Furthermore, the more buying/selling activity happens, the greater the liquidity of the exchange, and this is what Crypto Market Making Software is expected to do.
It is often believed that market makers manipulate the prices of digital assets, which isn’t true. They just play a role in maintaining the liquidity of the assets. In fact, the high liquidity makes it difficult for anyone to manipulate the prices of assets. On the other hand, low liquidity provides greater chances of manipulation of prices.
The crypto market has never seen as much upheaval as experienced in 2022, and this is the reason why choosing the right Market Making Services has become a necessity in the current scenario. Some even like using Crypto Market Making Software for ensuring the liquidity of assets as well as exchanges.
Want to try market making strategies for ensured sustainability in the crypto market? Connect with Antier, one of the leading Crypto Market Maker Companies on the global platform. It will end your liquidity challenges and start a trading platform more confidently.
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