What is Crypto Market Making?

Every day a new token gets listed on a crypto exchange. However, most of them fail or don’t get noticed. One of the reasons for this, which is often overlooked, is the lack of liquidity.

Crypto/blockchain startups put a lot of effort and money into the technology, product, white paper, team, advisors, etc. But, somehow they forgot about the liquidity of the token. And, guess what, liquidity is equally important as the above mentioned.

In this blog post, we’ll explain what crypto market making is, and why liquidity matters.

Let’s dive in.

What’s crypto market making?

Market making has been present in the financial trading world for a long time. To be precise, ever since people started to trade with forex, stocks, and other financial assets. With the rise of cryptocurrencies, market making finds it’s place in crypto trading.

So, what’s crypto market making?

Crypto market making means providing liquidity to the crypto market, and helps with the token economy. Plus, market making provides a stable financial ecosystem, which is especially important in the volatile crypto world.

People who work in this sphere are called, you’ve guessed it, market makers. These professionals use software to analyze and keep a vigilant eye on the market. But, just like any industry, market makers can be good, bad, and ugly, so be careful when adding one to your team.

You shouldn’t confuse market making with fake trading volume. Contrary to market making, fake trading volume uses techniques such as ‘wash trading’ which is illegal.

Why do you need crypto market making?

There are many reasons why you should include market making into your strategy. Let’s take a look at some of them:

Crypto exchanges love it

Crypto exchanges don’t want to waste time on listing coins that won’t get value. In fact, the whole listing process can be daunting, hard, and complicated. That’s why crypto exchanges love to see tokens with organic trading volume and liquidity.

So, when trying to get listed on an exchange, it’s a plus to have a market maker on your team. This tells the crypto exchange that you’re taking liquidity seriously and you won’t waste their time. Plus, this can enable you to get quicker and cheaper listings on the exchange.

Tokens with excellent liquidity attract investors

If you plan to conduct an ICO, then you should be aware that the lack of crypto market liquidity can limit the adoption of an ICO. However, the good liquidity you can more easily attract sophisticated investors that understand its value. And more investors and buyers mean higher trading volume.

Crypto market making can have a positive effect on a token

As stated above, both crypto exchanges and investors prefer tokens with good liquidity. Why? Because good liquidity means more organic trading volume. More trading volume means a higher and more stable token price.

With that, you’ll have better chances to avoid the volatility of the price and to survive the bear market. It’s a win-win situation for your token, the investors, and the crypto exchange.


Crypto liquidity doesn’t come by itself. Moreover, it can be quite hard to achieve, since the crypto market is still young and mostly unregulated. But, no one can deny the fact that it’s an important part of your overall strategy. Preventing the illiquidity of the token should be a priority for your team.

Crypto market makers can make this task easier for you. So, if you need help with that, feel free to contact morten@airdropalert.com. We have a few partners in this space.

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