Market Makers Boost Crypto Liquidity and Price Stability
Market makers play a critical role in the cryptocurrency market by providing liquidity, ensuring smooth and efficient trading, and maintaining stable pricing. These liquidity providers operate independently from exchanges to avoid conflicts of interest and continuously post both buy and sell orders across various price levels, reducing the need for direct buyer-seller matching. Their presence allows traders to execute orders without significant delays or slippage, even at exact price points. For example, a market maker might place a buy order for Bitcoin (BTC) at $73,450 and a sell order at $73,550, creating a $100 bid-ask spread, which represents their primary source of revenue [1].
Unlike traditional real estate transactions, where…
