How do trading makers work and why are they critical to the crypto market

Cryptocurrency markets resemble a huge marketplace without stores — they need people who are always ready to buy or sell. That’s exactly what trading makers (market makers) do, creating the necessary foundation for a healthy trading ecosystem. Without them, trading would turn into a nightmare: huge spreads between buy and sell prices, unpredictable price jumps, and the impossibility of executing large trades without causing a market crash.

How it works: what do trading makers do?

A trading maker is not just a trader who buys low and sells high. It is a specialized firm, algorithm, or institution that constantly places simultaneous buy and sell orders for the same asset. They operate like an automatic exchange: there’s always someone ready to buy your Bitcoin (BTC) or sell it to you.

The main difference between trading makers (market makers) and regular traders lies in the source of profit. While a regular trader profits from the difference between low and high prices, a trading maker earns on the spread — the small difference between the price they are willing to buy at and the price they are willing to sell at. For example, BTC is traded at $88,770 for buying and $88,780 for selling. The spread is only $10, but across thousands of trades, it adds up to significant income.

How it works in practice

Imagine a trading maker places a buy order for Bitcoin at $88,770 and simultaneously a sell order at $88,780. When someone clicks “sell,” one side of the trade is executed. When another trader clicks “buy,” the other side is executed. The trading maker earns their spread and immediately updates the orders, preparing for the next transaction.

All this happens at the scale of thousands of trades per second, thanks to high-frequency trading algorithms (HFT). Computers analyze order book depth, price volatility, order flow speed — and dynamically adjust the spread. During calm markets, the spread is narrow; during volatility, it widens (because the risk is higher).

Why are they so important for crypto markets?

Unlike stock markets, cryptocurrency markets operate 24/7 without breaks. Trading makers provide liquidity on a schedule that no human can follow. They act as a buffer absorbing the rush of sellers and buyers.

Imagine a scenario without trading makers: you want to buy 100 BTC. You have to wait until a seller exactly offers 100 BTC. That could take hours. With trading makers? You click, and the trade is executed in milliseconds.

Moreover, trading makers are critical when launching new tokens. Young projects hire firms like Wintermute, GSR, or DWF Labs to create initial liquidity. Without this, a new token appears risky, and investors stay away.

Key players in the industry (2025)

Wintermute — the scale king. As of February 2025, this firm manages approximately $237 millions in over 300 crypto assets across 30+ blockchains. Total trading volume for November 2024 reached nearly $6 trillions. Operates on 50+ exchanges simultaneously. Cons: fierce competition and limited focus on microcaps and niche tokens.

GSR — industry veteran with over 10 years of experience. Invested in 100+ protocols and companies. Provides liquidity on 60+ exchanges. Specializes in derivatives trading and OTC deals. Cons: expensive services for small projects, main focus on Tier 1 players.

Amber Group manages trading capital of $1.5 billion for 2000+ institutional clients. Total trading volume exceeds $1 trillion. Known for AI-based approaches. Cons: high entry requirements, geared toward large clients.

Keyrock conducted 550,000 daily trades across 1,300+ markets and 85 exchanges (as of February 2025). Founded in 2017, offers tailored solutions for different jurisdictions. Cons: fewer resources than giants, higher fees.

DWF Labs — a young investor and maker managing a portfolio of 700+ projects. Supports 20% of the Top-100 and 35% of the Top-1000 projects on CoinMarketCap. Operates on 60+ leading exchanges. Cons: works only with Tier 1 projects, strict selection procedures.

Benefits for exchanges and the ecosystem

Trading makers are a health generator for exchanges. First, liquidity. Constant orders mean you can trade large volumes without panic. Instead of the price soaring 20% when trying to buy 10 BTC, it moves by 0.1%. That’s comfortable.

Second, price stability. Trading makers prevent prices from jumping wildly. During panics, they support buying demand; during hype, they actively offer assets. It’s similar to how a central bank stabilizes a currency.

Third, market efficiency. Prices reflect real demand and supply, not random jumps on weak liquidity. Narrow spreads mean traders pay lower fees.

Fourth, attracting traders. A liquid market draws people in. More traders — more trades — more fees for the exchange. It’s a self-reinforcing growth cycle.

Risks and challenges

Not everything is smooth. Market volatility is the number one enemy. If BTC drops 15% in a minute and a trading maker holds a large position, losses can be huge. They may not have time to adjust orders.

Inventory risk — firms hold large crypto reserves. If something goes wrong (hack, technical failure, asset crash), losses can be substantial.

Technological risks are inevitable. System errors, cyberattacks, latency issues can lead to orders being executed at undesired prices. One bug — and a firm can lose millions in seconds.

Regulatory uncertainty — a headache. Each country sets its own rules. In some jurisdictions, market making can be classified as market manipulation. The compliance cost is high.

Market makers versus market takers: symbiosis

By the way, trading makers are not enemies of market takers. It’s a symbiosis. Market takers are those who press “buy” or “sell” at the current price. They generate trading activity, filling makers’ orders. Without taker activity, makers cannot earn. This duality is the foundation of a liquid market.

Summary

Trading makers are the hidden heroes of the crypto market. They don’t shine or make loud announcements, but without them, the entire system would break down. They ensure liquidity, stability, efficiency, and 24/7 accessibility of trading. Large firms like Wintermute, GSR, and DWF Labs invest billions in algorithms and technology to profit from spreads.

However, their path is not easy — volatility, technological failures, regulatory hurdles, and inventory risks constantly threaten them. But they survive and evolve because their role is critical. As the crypto market grows, the importance of trading makers will only increase, shaping a more mature, efficient, and accessible digital asset ecosystem.