Institutional Shift Dominates Crypto Market Making Industry

Market makers in the crypto industry are facing a challenging environment as trading volumes continue to decline. According to recent data, institutional transactions now account for 72% of total activity, driving a shift toward institutionalization among market makers and their clients.

The decrease in trading volume has been steady since its peak in September 2025, with derivatives becoming the primary focus of trading and hedging efforts. This trend is evident in the 9.6x trade ratio, indicating that market makers are increasingly relying on derivatives to manage risk.

Meanwhile, traditional financial institutions are acquiring stakes in market-making companies to gain access to crypto capabilities. For instance, Standard Chartered's SC Ventures has invested in GSR, becoming its first external strategic shareholder. This trend is a clear indication of the industry's move toward institutionalization.