What Do Market Makers Actually Do? 💸

When you buy or sell a token on an exchange, who is filling your order?

It’s not thousands of retail traders sitting in the book 24 hours a day. Most of the liquidity you see comes from market makers. They place continuous buy and sell quotes so spreads stay tight and execution stays stable.

🕯 Market makers run automated systems that constantly update orders as price moves. When one side of their quote gets filled, they hedge the exposure on futures or other venues.

Their goal is neutrality. They earn from spreads, rebates, and small arbitrage opportunities, not from guessing market direction.

They also manage inventory. If they accumulate too much of a token while making markets, they offset it elsewhere. If volatility rises, they pull back, widen spreads, or reduce size to control risk. Everything is systematic and tied to liquidity conditions.

🤔 So why do people dislike them so often? Because when volatility hits, price often rushes into areas packed with stops. Market makers step back to avoid getting high directional exposure, and the market slices through these levels quickly. Traders see this and assume market makers “hunted” their positions.

In reality, they placed their stops in predictable spots where the most liquidity sits. Blaming MMs is easier than admitting the market punished a crowded idea. People hate taking responsibility and love to blame everything on others 🤦

#BitcoinBouncesBack #BuyTheDipOrWaitNow? #BTCMiningDifficultyDrops