Market maker

A market maker is a trader or firm that continuously places both buy and sell orders for an asset, profiting from the small gap between the two prices. This keeps exchanges liquid, so regular traders can buy or sell quickly without moving the price much. Without them, order books would be thin and prices would swing wildly on small trades. For example, a firm might post a bid to buy Bitcoin at $64,980 and an ask to sell at $65,020, earning the $40 spread each time both orders fill, while doing this thousands of times a day across many pairs. Many exchanges pay market makers reduced fees or rebates to encourage this constant quoting, since it directly improves trading conditions for everyone else on the platform.