market maker (mm)

A Market Maker, also known as MM, is an entity that participates in maintaining liquidity in the market by continuously offering competitive buying and selling prices for financial assets. Acting as an intermediary between buyers and sellers, the Market Maker’s role is to ensure constant availability of transactions and minimize the difference between buying and selling prices.

Role and Functions of a Market Maker

One of the main functions of a Market Maker is to provide market liquidity by being constantly ready to execute transactions at competitive prices. This allows investors to buy or sell financial assets at any time, contributing to limiting potential price fluctuations and facilitating trading on a given platform.

Benefits for the Cryptocurrency Market

In the cryptocurrency market, the presence of Market Makers can help increase investors’ trust by ensuring transaction stability and liquidity. Moreover, Market Makers’ activities can lead to a decrease in spreads – the difference between buying and selling prices, which in turn can reduce transaction costs for investors.

It is worth emphasizing that Market Makers play a significant role in the development of financial markets, and their presence can be crucial for the functioning of a healthy and efficient cryptocurrency exchange.

In the case of the cryptocurrency market, characterized by frequent and dynamic price changes, the presence of Market Makers can contribute to reducing price volatility and increasing market stability.