The collapse of Alameda Research, the core trading firm of Sam Bankman-Fried’s failed crypto empire, left a deep scar on the digital asset industry. Nearly a year later, crypto market-making businesses are still striving to recover.
Although Bitcoin’s recent rally—gaining nearly 16% in a week—boosted trading volumes, the market is far from its pre-crypto winter levels. Data from CCData shows that October marked the first month of volume growth since June, but it remains 50% lower than before FTX’s bankruptcy in November 2022.
This means liquidity providers, who profit from the bid-ask spread of token trades, face a challenging environment. With lower volatility and diminished trading volume—once hallmarks of the crypto sector—many are pivoting their strategies or seeking new revenue streams beyond traditional market making.
Richard Galvin, co-founder of Digital Asset Capital Management, remarked, “It has been a tough year for market makers due to reduced volumes, regulatory uncertainty across jurisdictions, and heightened concerns around exchange counterparty risk.” He added that if the current rally continues, “it would present a welcome profit opportunity for those still active.”
Below, we take a closer look at how some of the major market makers are navigating the post-FTX landscape.
Wintermute
Wintermute Trading Ltd., one of the largest crypto market makers, has remained profitable and is diversifying its operations in preparation for the next bull cycle. According to co-founder Evgeny Gaevoy, the firm continues to adapt and expand.
Marina Gurevich, Wintermute’s Chief Operating Officer, noted that the company currently handles between $2 billion and $3 billion in daily trading volume, down from $7.5 billion per day during the 2021 market peak.
As part of its effort to generate revenue beyond market making, Wintermute has become a major player on the Ethereum network, bundling transaction blocks. Gaevoy explained that this move aims to gain a competitive edge in transaction ordering, which can enhance arbitrage and other profit opportunities.
Wintermute is also supporting a yet-to-launch lending project, exploring the launch of a crypto derivatives exchange, and developing a crypto-related index. Although timelines for some initiatives remain uncertain, the firm’s venture arm has backed over 80 projects since 2020.
Based in London and Singapore, Wintermute plans to increase its headcount by 10%—around 10 employees—over the next two to six months.
Cumberland DRW
Cumberland, the crypto subsidiary of Chicago-based DRW, was established in 2014 and focuses on over-the-counter (OTC) trading and proprietary account trading. The company has reported continued growth in its OTC derivatives business.
Through ISDA agreements, Cumberland offers bilateral crypto options on Bitcoin (BTC), Ethereum (ETH), and Solana (SOL). Its parent company, DRW, co-founded ErisX—later acquired by Cboe Global Markets—and Digital Asset Holdings.
Additionally, Cumberland Labs, its blockchain incubator, has supported projects like Hashnote and Expand.network.
GSR Markets
Founded in 2013 by former Goldman Sachs traders, London-based GSR is one of the oldest and most established market makers in the crypto space. It recently received approval from the Monetary Authority of Singapore to offer digital payment token services.
GSR has historically been active across a wide range of tokens but is now placing greater emphasis on Bitcoin and Ethereum, the two largest cryptocurrencies.
The company is also an active venture investor through GSR Investments. According to a company spokesperson citing Messari data, GSR Investments is among the industry’s most active investors, with stakes in EDX Markets, Ethena, and LayerN. Venture activity has picked up this quarter after a quiet summer.
Like many crypto firms, GSR underwent layoffs this year to adapt to market conditions. The spokesperson stated that the cuts were meant to “align and grow our business with the current direction of the crypto industry.” The firm is now actively hiring in trading, engineering, legal, and finance.
Jump Crypto
Chicago-based Jump Trading, primarily a traditional securities firm, launched Jump Crypto in late 2015 to invest in crypto assets. However, due to regulatory uncertainty in the U.S., the company has been scaling back its crypto trading activities stateside.
Jump was a major supporter of the TerraUSD project and was among the firms questioned by U.S. prosecutors in the investigation of its collapse. Jump Crypto also faced losses from the FTX bankruptcy—it was a client of the exchange—and compensated users after the Wormhole bridge was hacked for $320 million. Reports suggest Jump has since recovered those funds.
Jump Crypto remains an active venture investor, with recent investments including Outdid and Coinflow Labs. A Jump spokesperson declined to comment on specific company details.
Flow Traders
Amsterdam-based Flow Traders is a well-established market maker across traditional asset classes and has been active in crypto since 2017. Its digital assets division employs 60 people, mostly in Europe, and the company is taking a conservative approach to team expansion.
Flow Traders had “negligible” exposure to FTX and remains “committed to building the digital asset ecosystem as a market maker and strategic investor.” According to its semi-annual report, the firm held €89.2 million ($94.1 million) in digital assets for trading as of June 30, up from €58.3 million at the end of December.
The company expects regulatory uncertainty to persist through 2023 and beyond and is working with regulators to promote “a clear and fair regulatory framework.”
Flow Traders is active in spot, futures, options, and exchange-traded products for digital assets and does not take directional bets. In July 2022, it launched a €50 million ($52.7 million) venture capital arm, Flow Traders Capital, which has invested in Blockdaemon, Elwood, Sei Network, and Ondo.
Auros Global
This market maker, with offices in New York and Hong Kong, had approximately $20 million in assets frozen on FTX when it collapsed. The situation led the company to seek temporary liquidation in the British Virgin Islands to restructure its debts.
In March, Auros raised $17 million from investors including Vivienne Court, Bit Digital, Trovio, Epoch Capital, Primal Capital, and a consortium of Optiver alumni, helping it navigate the crisis.
A company spokesperson said Auros has since “optimized investments in certain crypto exchanges and strengthened risk management,” while demanding greater transparency from partner exchanges. The firm works with over 50 exchanges and now focuses on high-liquidity tokens.
Auros currently handles around $1.3 million in daily trading volume, down from $2.5 million per day during the May 2021 peak.
Portofino Technologies
Founded in April 2021 by former Citadel Securities employees, Switzerland-based Portofino is a relatively new entrant in the digital assets market-making space. The company raised $50 million in 2021 from investors including Coatue Management, Valar Ventures, and Global Founders Capital.
A Portofino spokesperson stated that the firm typically focuses on high-market-cap tokens traded on major crypto exchanges. Although it was active on FTX in 2022, its assets on the exchange were limited.
Despite a global decline in profitability for market makers in certain asset classes, Portofino expects “crypto market volumes to continue growing in the coming months, as key catalysts are likely to bring institutional and retail investors back to the market.”
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Frequently Asked Questions
What is a crypto market maker?
A crypto market maker is a firm or individual that provides liquidity to cryptocurrency exchanges by continuously quoting both buy and sell prices for digital assets. They profit from the spread between these prices and help ensure smooth trading operations.
How did the FTX collapse affect market makers?
The FTX bankruptcy caused significant losses for many market makers who held assets on the exchange. It also led to reduced trading volumes, heightened counterparty risk concerns, and increased regulatory scrutiny across the industry.
Are crypto market makers still profitable?
Profitability has declined due to lower trading volumes and volatility, but some firms have adapted by diversifying into venture investing, blockchain infrastructure, and other revenue streams. Market conditions remain challenging but are improving gradually.
What strategies are market makers using to recover?
Many are focusing on major cryptocurrencies like Bitcoin and Ethereum, strengthening risk management, expanding into OTC derivatives, and investing in crypto ventures. Some are also exploring new roles in blockchain network operations.
Which tokens do market makers typically support?
While some market makers cover a wide range of tokens, many are now concentrating on high-liquidity assets such as BTC and ETH due to reduced market depth and higher risks associated with altcoins.
Is the crypto market making industry regulated?
Regulation varies by jurisdiction. Some countries, like Singapore, are introducing specific licensing frameworks, while others are still developing guidelines. Most market makers are prioritizing compliance and transparency to build trust.