How does Market Making work in the Crypto industry?
Market making is about deploying algorithmic trading strategies and providing liquidity on a cryptocurrency by placing both bid and ask limit orders for the currency on the crypto exchange.
Risk Management, proprietary trading algorithms, fast and reliable technology are essential for market making.
Market Making Program for Crypto Token Projects
Crypto token companies have raised a significant amount of capital in the last few years. However, most of these companies face the following challenges.
Lack of Liquidity - Company founders and investors are not able to monetize their investment due to liquidity challenges corresponding to their token.
Low Trading Volume - High transactions costs prohibit the investors and traders to trade the tokens
Difficulty in liquidating positions - After a launch of a crypto token project, the investors are less likely to invest in the token due to difficulty in liquidating their positions.
Listing difficulty - In the absence of market makers and liquidity in a token, it becomes difficult to list tokens on the major crypto exchanges.
SpotSpreads Market Making program provides liquidity to the crypto tokens on pre-agreed terms. Tokens get the following benefits out of this program.
Higher Trading Volume
Ease of liquidating positions
Easier listing on major crypto exchanges
Market Making Program for Crypto Exchanges
SpotSpreads supports established and new crypto exchanges to help them reap the following benefits through our Market Making program.
Higher Trading Volume - Investors and traders are more likely to trade a cryptocurrency if it is liquid because of lower transaction costs via reduced slippages.
High interest in crypto exchange - Because the cryptocurrencies are liquid, it attracts more interest from traders as preferred trading channel and thereby leading to increased revenues for crypto exchanges.
Market Making Program Implementation for Crypto Token Projects and Exchanges
Below are the steps that we undergo in order to come to an agreement for the Market Making Program with a Crypto Token project and Crypto Exchanges.
Initial Discussion and Review: We have initial discussion with clients to understand their objectives and requirements from the liquidity provisioning program.
Program Definition and Agreement: We provide our clients with the details of the suitable Market Making program based on the trading volume, crypto exchange, etc and define the traded cryptocurrency pair, quoting parameters and commitment.
Connectivity with Crypto Exchange: We are already connected with multiple crypto exchanges, and for newer exchanges, usually exchanges provide APIs for connectivity and SpotSpreads can establishe connectivity with the exchange in less than a week. .
Program Execution: SpotSpreads starts trading and providing liquidity to the token/exchange based on the agreed upon terms and provides clients with regular analytical reports.
If you are looking to work with us for the Market Making program for your token or crypto exchange, Contact Us.