Work in Encryption It does not only involve retail and whales, but also managed Market Services.
These are the main liquidity providers who facilitate Effective trading By constantly maintaining purchase and sale orders.
Their role is to ensure liquidity, low prices, and stable prices in encryption markets, thus facilitating effective trading by maintaining purchase orders and selling continuously.
How to make the market
The brand service is also found in traditional markets, to the point that even before Bitcoin, in 2008, there were already more than two thousand in the United States of America, and even more than a hundred in Canada.
Technically, they are Companies or individuals Those who simultaneously put the purchase orders and sales orders for the origin of the inventory in the hope of achieving profit on the difference, called The spread of bidding or rotation. The result is a specific stability of the market, and above all, a specific decrease in fluctuations, as it effectively determines the price range of the original.
The same SEC (Securities and Stock Exchange Committee) in the United States of America is determinedMarket makerAs companies are ready to buy and sell shares on a regular and continuous basis at a publicly quoted price.
For example, in the currency market ( Forex), Most commercial companies Market makersThat buys foreign currency from clients and resells it to other customers. They gain a profit from trading price teams ( Spread), In exchange for providing continuous liquidity in the market, reducing the costs of transactions, and facilitating exchange exchanges.
In other words, they do not buy and sell to resell it or later to buy at higher prices or less, but they buy and sell simultaneously at different prices, and they get the difference.
In their absence, trading will be significantly less efficient, because direct matches between buyers and sellers at the same prices will be required, which turns out that it is practically impossible.
The result of all this is that the majority of transactions occur through market makers.
The role of making market in the encryption markets
In traditional markets, in fact, the actions of any major operator can be monitored.
However, in the encryption markets, there are also large entities that can work out of control of salads.
In theory, and Market maker It should work completely independently of exchanges, in order to prevent the conflict of potential interests. However, in the encryption markets, it is not clear how independent of these two types of operators is from each other.
When any buyer puts a purchase order on the stock exchange at a certain price, to be completed, it requires another seller to submit a sale request at the same price.
It is very rare for this to happen, and this is the place Market maker Come to play.
You buy these requests and sales requests simultaneously, at different prices, in order to intercept all those requests made by others who have not yet found a match. Since market makers are selling and buying at the same time, their profits only come from the difference between the low purchase and the highest selling price.
In this way, more purchase and sale orders can be completed on stock exchanges, and in this way, the same exchanges turn into more liquid.
The question is: How can we be sure that this activity is not done by the same exchanges? And if they do so, how can we make sure they are not using the information they own only to process the market in order to get more profits?
For this reason, the exchange platforms should not participate in the market -making, but in the encryption markets, it is not clear whether things are like that or if there are exchange platforms that are also involved in the market making.
Moreover, even if the market is made by independent entities, how can one make sure that they do not have agreements under the table with stock exchanges?
The main market makers in the world of encryption
Some market makers are known theoretically independent of the exchange of encryption.
One of these is EncryptionFavorite for institutional operators because of its focus on security and strong risk management.
Another is Amber groupWhose work focuses mainly on the Asia Pacific region.
Other names are known with winterThe global algorithm maker participates in high frequency trading (HFT) specialized in digital assets, such as Mepperland, a subsidiary of the famous trade company DRW, and Virtu Financial, one of the leading e -commercial companies listed in NASDAQ.
Recently, for example, there has been a lot of talk about Wintermute because it is known that it works with some of the largest encryption exchanges in the world, including Binance and Crypto.com.
The fact that it is also a high -frequency trading company, in addition to the market maker, leads many to doubt that it may benefit from its market activity at the expense of users.
However, it must be remembered that even a small breath Retailing traders In theory, it is possible It works as the market makersEven if it is with huge lower sizes, especially by Limit orders set.
The problem is that many users do not use limit orders, and therefore they are effectively at the mercy of market makers. For this reason, when purchasing or selling encryption on exchanges, it is always recommended to do so Rent ordersEspecially when the amounts concerned are somewhat important; Otherwise, there is a serious danger to end the payment not only sellers or buyers but also market makers.
Often those who prefer not to use limit orders because they want to carry out their transactions immediately, and this can only happen by taking advantage of the activity of market makers. Therefore, the payment rate against immediate implementation is often a greater spread, which will be collected by the latter, while the alternative requires little patience.
