The Role of Market Makers in Crypto Trading (08)

In Continuation with the discussion on the topic of market makers in crypto trading is about second last with this part. In previous discussions I hope you got some idea about market makers' role in crypto trading. It is hopefully clear that they are playing a role in the market in terms of trading and stabilizing the situation of the market significantly. So in today's discussion I am going to talk about the emergence of market makers in the field of crypto trading so far.

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Since the early days of Bitcoin, market making in crypto has grown up significantly. In the beginning, most market makers were individual traders or small firms who saw an opportunity to profit from the nascent market. With the time being, the market matured and more institutional investors entered this sector. With the entrance of institutional and big investors, the situation changed. They begin to dominate the market. So the market makers' role came into existence.

A significant development in recent years is the rise of decentralized exchanges (DEXs). They are completely different from the traditional exchanges. There is no Central authority, rather they totally rely on automated protocols like automated market makers (AMMs). The system has a formula that basically decides the up and down of the market price that automatically makes the market depending on the volume of trading automatically. There should be some other discussion on this topic of automated market makers in the case of decentralized exchanges. So let's talk about this topic in the last and next part of this series to wrap up the chapter.

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VEIGO (Community Mod)

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