With the bankruptcy of market maker Alameda and the heavy losses of other market makers brought to you by the downfall of FTX. You could say there is momentarily a shortage of market makers.
What are market makers?
A market maker is a firm that buys and sells cryptocurrency to provide the market with liquidity and depth in the order book. While profiting from the difference in the bid and ask spread.
What is the impact of no market makers in cryptocurrency?
Because of the lack of depth in the market order books of small coins, we’ve seen a return of pump dumps across the board.
In simple terms, crypto has become more volatile and manipulative. A very unstable market and crazy Altcoin volatility can be risky, but these are the environments where you can make some nice gains by scalping (trading on low timeframes) on low cap coins.
Is this the time where you could buy altcoins and watch your returns multiply? When we look to the charts, some coins did manage to catch ridiculous pumps to the upside.
