Market makers in the crypto industry: party planners or bartenders?

In essence, crypto market makers are the ultimate party planners, but instead of balloons, cake and a banging Spotify playlist, they use leverage algorithms and order books. Head of Commercial Strategy at a large crypto market maker, Stef Wynendaele, suggested that “It's a great definition, but it implies too much power to what a market maker does.”

Wynendaele suggested that market makers are the foundations of a thriving crypto economy and that they’re not in fact “the bartender who controls who drinks or not.”For Patrick Heusser, Chief Commercial Officer at Crypto Finance, the bartender analogy works well. However, “Someone has to do the logistics,” he explained. “Someone has to make sure there is enough beer in the back and stuff for the drinks–and market infrastructure is super important for market makers.

So if the crypto economy was a party, the market makers could be the dance floor, the music, and the logistics. For traditional finance, Chaumont explained, it’s mostly “proprietary trading firms operating off their balance sheet, trying to generate profit and loss”. Whereas in crypto, there is a more technological approach because the assets are infinitely harder to price.

This is a very good question.

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