Investors in cryptocurrency may be accustomed to volatility, but even the most ardent crypto devotees had their trust challenged in 2022 as exchanges and funds all around the domain went bankrupt. Values plummeted, businesses collapsed, and thousands of people lost their jobs.

The starting point for everything was the demise of the Luna token followed by the alarming liquidity problems faced by crypto hedge fund Three Arrows Capital (3AC), which led to a dramatic decline in the entire market’s value dubbed as the“crypto winter.” Even greater brands were lost in the ensuing upheaval, most notably FTX, a crypto trading platform with origins in Asia. Sam Bankman-Fried, the company’s founder, went from being a theoretical millionaire to being accused of fraud in the United States after his business failed in November.

Market Making Firms Hit By the Crypto Chaos

Crypto winter also affected market makers as the major providers of crypto liquidity. One of the biggest players in the field, Wintermute, lost $55 million due to their involvement with Bankman-Fried’s unsuccessful exchange, which happened after the firm had encountered a $160 million hack a couple of months earlier.

The latest trouble that Wintermute is currently dealing with also hails from the 2022 downturn – in a proposed class-action lawsuit, the market maker is accused of helping the CEO of Celcius Digital, a now-bankrupt crypto lending firm, in his endeavor to bolster CEL following the crash of Terra and Luna tokens.

Another liquidity providing firm, a Singapore-based Amber Group, was also among the companies suffering from crypto market doldrums. Although it successfully completed its record $300 million Series C round amid volatility, Amber ended up with annulled incentives for employees, reduced wages, and severe job cuts.

Which Crypto Market Makers Proved To Be Resilient

Market makers are an essential component of the cryptocurrency ecosystem. They facilitate the launch of new and creative projects by supplying liquidity, help token issuers to raise their market capitalization, and promote high organic trading volumes.

Due to a liquidity crisis, which is one of the causes of the recent crypto winter, market making firms are even more crucial than ever before. Their assistance will be necessary for the industry to survive and thrive further. Today, for founders and exchanges seeking deep liquidity, it would be a smart move to choose the right market maker from those firms who successfully lived through such a worldwide crypto crunch.

Especially for you, we collected 5 best options in this thorough review.

Gotbit Hedge Fund

gotbit hedge fund ‘s 2022 annual report says that the market maker still thrived and exceeded the expected performance indicators even during the bear market. It also shows that the firm’s market-making strategies have accrued $170 million in profits across both CEXs and DEXs. Throughout the year, Gotbit worked with the renowned Web3 players, including Syscoin, PowerPool, and AGI. The company acts as a performance-focused market maker with a handpicked team of traders, managers and analysts from the world’s leading institutions like Goldman Sachs, Deloitte, and McKinsey. This expertise allows Gotbit Hedge Fund to offer market-making services on any venue of the client’s choice.

GSR Markets

gsr has performed remarkably well in all markets, even the most volatile ones, during the liquidity shortage of the crypto winter. It’s arguably one of the most sought-after crypto market makers which boasts extensive experience in the industry and highly skilled financial analysts and developers who have been sourced from reputable companies like Two Sigma, Goldman Sachs, and Tower Research Capital. GSR has been operating for over three-quarters of the crypto market’s lifespan. Such longevity is a testament to the firm’s competence and expertise. GSR serves diverse market players from exchanges and token issuers to miners and institutions.

Jane Street

jane street experienced a significant expansion of their crypto trading business during the recent meltdown in prices of digital coins. Currently, it has dozens of employees creating efficient markets for crypto assets and performing other related activities such as tax and accounting. The firm also reported that the downturn had not affected institutional interests, and they saw the number of queries from big market players grow steadily. Jane Street utilizes the most sophisticated tools for complex issues to achieve precise results. It also conducts extensive research on trading risks and gains a comprehensive understanding of the market to assist their clients in making informed decisions.

Jump Trading

In the wake of the recent turmoil, jump trading was still growing and looking for investment opportunities, according to its president Kanav Kariya. The firm doesn’t break out its financials, so the exact amount of profits is unclear. However, it’s likely to have benefited from being in the crypto game during different times. Jump Trading is a research-driven crypto market maker that helps prepare global financial markets for the future, providing liquidity to both spot and derivative markets and crypto platforms. Through its Jump Crypto subsidiary, the firm carries out high-frequency trading operations and executes advanced trading strategies.

DWF Labs

While the cryptocurrency domain was suffering from the crypto winter, dwf labs put their efforts in helping those projects who faced financial difficulties as a result of market uncertainties. It was among the first entities to join The Industry Recovery Initiative (IRI) by Binance, encouraging other market makers like Jump Trading and GSR to follow suit. In early 2023, DWF Labs issued four grants, ensuring financial backing to MXC and Symbiosis. DWF Labs is dedicated to investing and supporting visionary founders who are looking to shape the future of Web3. Apart from market making, its services include strategic consulting, liquidity provision, treasury management, and many others.

Bottomline: Watch Out For a Reliable Crypto Market Maker

Liquidity issues are the common case for the crypto market. Entrepreneurs and exchanges that don’t get ready for the periodic challenges by having a market maker backing their business will find it more difficult to succeed compared to those who do.

This is the reason why it is important to work with market makers. They are the only type of companies that can offer regular liquidity, which is crucial for projects to not only stay afloat but also to excel.

Based on our research of the ecosystem, these 5 crypto market making firms have proved to demonstrate the most outstanding performance even in times of frenzied volatility:

• Gotbit Hedge Fund
• GSR Markets
• Jane Street
• Jump Trading
• DWF Labs

We recommend that you conduct your own assessment as well and select the firm based on your project’s maturity and business needs.