Crypto Market Makers vs Market Takers — What They Are and How They Influence

Crypto market makers provide liquidity by placing buy and sell orders, while market takers seek immediate execution of their orders. Here’s how they interact with each other.

Key Takeaways:

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Crypto Market Makers vs Market Takers — What They Are and How They Influence

Crypto market makers provide liquidity by placing buy and sell orders, while market takers seek immediate execution of their orders. Here’s how they interact with each other.

FEB 07, 2024

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INTERMEDIATE

Key Takeaways:

In the cryptocurrency market, market makers provide liquidity by placing buy and sell orders on the order book, profiting from bid-ask spreads.

Market takers, in contrast, seek immediate execution by matching their trades with existing orders, often using market orders.

Market makers are often entities specialising in providing liquidity, such as trading firms or liquidity providers, and play a critical role in maintaining a liquid market, narrowing bid-ask spreads and creating continuous trading opportunities.

Market takers prioritise immediate execution and match their trades with existing orders on the order book. They often use market orders, accepting the prevailing market price, and may incur higher transaction fees compared to market makers.

While most regular market makers are institutional, individual crypto whales can act as market makers or takers at times due to the volume of their actions

What Are Market Makers?

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Crypto Market Makers vs Market Takers — What They Are and How They Influence

Crypto market makers provide liquidity by placing buy and sell orders, while market takers seek immediate execution of their orders. Here’s how they interact with each other.

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