Written by: Suvashree Ghosh, Olga Kharif

Compiled by: Luffy, Foresight News

Nearly a year after the collapse of Alameda Research, the trading firm at the heart of Sam Bankman-Fried’s failed crypto empire, the market-making business for crypto assets is still struggling to recover.

Although Bitcoin rose nearly 16% last week, boosting trading volume, it will take a while for it to recover tocryptocurrencyThere is still a long way to go to reach the level before the cold winter. According to CCData, trading volume in October increased for the first time since June, but it was still down 50% compared to before FTX went bankrupt (November 2022).

This means that the remaining liquidity providers (whoTokenThe spread between the bid and ask prices) faces the difficult task of generating revenue in a market lacking the volatility and trading volume that once dominatedcryptocurrencySome have refocused their trading activities, while others have sought new revenue streams beyond market making.

Richard Galvin, co-founder of Digital Asset Capital Management, said: “Due to declining trading volumes, uncertain regulatory frameworks in multiple jurisdictions and theexchangeThis year has been very tough for market makers as concerns about counterparty risk have intensified.” He added that if the recent rebound persists, “it will be a welcome profit opportunity for market makers and traders who are still active in the market.”

自一年前 FTX 崩溃以来，各交易所的交易量减少了一半。

Here are the latest updates from some of the market makers still active in the cryptocurrency space.

Wintermute

Wintermute Trading Ltd. co-founder Evgeny Gaevoy said in an interview that as one of the largest cryptocurrency market makers, Wintermute has remained profitable and is diversifying its business to cope with another bull market cycle. Marina Gurevich, chief operating officer of Wintermute, said the company's current daily trading volume is between $2 billion and $3 billion, down from $7.5 billion per day during the market peak in 2021.

As part of its efforts to generate revenue beyond market making, Wintermute has become a major player on the Ethereum network, helping to package blocks of transactions. Gaevoy said the move is aimed at gaining a competitive advantage in adding transactions to blocks, which could help it make more money from arbitrage and other opportunities.

Gaevoy said Wintermute has also backed a lending project that has not yet launched, is considering launching a cryptocurrency derivatives exchange, and is working to launch a cryptocurrency-related index. Gaevoy said the timeline for some of these projects has not yet been determined, but declined to provide more specific information on each project. The company's venture capital arm has supported more than 80 projects since 2020.

Wintermute, which is based in London and Singapore, plans to add 10%, or 10 employees, in the next two to six months, Gurevich said in written responses to Bloomberg News inquiries.

Cumberland DRW

Cumberland, the cryptocurrency subsidiary of Chicago-based DRW, was founded in 2014 and focuses on OTC and proprietary account trading. The company said its OTC derivatives business continues to grow. It offers bilateral cryptocurrency options on BTC, ETH and SOL through ISDA.

Cumberland's parent company DRW also co-founded ErisX (acquired by Cboe Global Markets Inc.) and Digital Asset Holdings. Cumberland Labs is aBlockchainA project incubator that has supported companies like Hashnote and Expand.network.

GSR Markets

London-based GSR is one of the oldest market makers in the crypto space. It was founded in 2013 by former Goldman Sachs traders and has grown to become one of the leading market makers in the crypto space. It recently received approval from the Singapore central bank to offer digital payment token services in Singapore.

GSR told Bloomberg that they have historically been active in various token trading and are now focusing more on Bitcoin and Ethereum, the two largest cryptocurrencies.

The firm is also a prolific venture investor, with its investment arm, GSR Investments, one of the industry’s most active investors, holding stakes in EDX Markets, Ethena and LayerN, according to a company spokesperson, citing Messari data. The spokesperson said the firm’s venture activity has picked up this quarter after a “quiet summer.”

GSR has cut staff this year, joining many cryptocurrency companies seeking to adapt to tougher market conditions. The spokesperson said the layoffs were to "adapt and evolve our business to the current direction of the cryptocurrency industry." The spokesperson added that the company is "actively hiring" employees in trading, engineering, legal and finance.

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Jump Crypto

Jump Trading, based in Chicago, which is primarily engaged in traditional securities investment, established Jump Crypto in late 2015 to start investing in crypto assets. However, the company has been working on withdrawing from cryptocurrency trading in the United States due to the uncertainty of the U.S. regulatory environment. Jump is a major backer of the TerraUSD project and is one of the companies questioned by U.S. prosecutors in the process of investigating TerraUSD. Jump Crypto also faced losses from the collapse of FTX, a market maker that was a client of FTX and compensated the protocol's users after the $320 million hack of Wormhole. According to research by Blockworks, Jump appears to have recovered the funds.

Jump Crypto is another prolific venture investor, with recent investments including Outdid and Coinflow Labs. A Jump spokesperson declined to comment on specifics related to the company.

Flow Traders

Amsterdam-based Flow Traders is an established market maker across various traditional asset classes that has been active in the cryptocurrency space since 2017. Its cryptocurrency business has 60 employees, mainly in Europe, and the company is conservative about expanding the team.

Flow’s exposure to FTX is “negligible” and it is “committed to building the digital asset ecosystem as a market maker and strategic investor.” According to the company’s semi-annual earnings report, they held €89.2 million ($94.1 million) in digital assets for trading at the end of June, up from €58.3 million at the end of December.

Flow Traders said in the report that it expects regulatory uncertainty to continue until 2023 and beyond, adding that the company is working with regulators to push for "a clear and fair regulatory framework."

According to Flow Traders' semi-annual report and website, they trade digital asset spot, futures, options and exchange-traded products, and do not make directional bets. The company established its venture capital arm Flow Traders Capital with 50 million euros ($52.7 million) in July 2022 and has invested in companies such as Blockdaemon, Elwood, Sei Network and Ondo.

Auros Global

The market maker, which has offices in New York and Hong Kong, had about $20 million worth of assets frozen when FTX collapsed, ultimately leading the company to apply for provisional liquidation in a British Virgin Islands court to restructure its debts.

Auros raised $17 million in March this year, with investors including Vivienne Court, Bit Digital, Trovio, Epoch Capital, Primal Capital and a consortium of senior alumni of market making giant Optiver, which helped the company get out of the crisis to some extent.

Since then, Auros has “optimized its investments in some cryptocurrency exchanges, strengthened risk management,” and demanded more transparency from exchanges it does business with, a company spokesperson said. The company works with more than 50 exchanges and is currently focusing on tokens with higher liquidity, according to its website.

Auros said it processed $1.3 million in transactions per day in October, down from $2.5 million per day during its peak in May 2021.

Portofino Technologies

Founded in April 2021 by former Citadel Securities employees, Switzerland-based Portofino is a relatively young player among its peers in the digital asset market. Portofino raised $50 million in 2021 from investors including Coatue Management, Valar Ventures, and Global Founders Capital.

A Portofino spokesperson said in an emailed response to Bloomberg that the company generally focuses on high-market-cap tokens traded on the largest cryptocurrency exchanges. The spokesperson added that the company was more active on FTX in 2022, but had limited assets on the exchange. Although market maker profits for certain asset types have fallen sharply globally, Portofino expects "cryptocurrency market trading volumes to continue to grow in the coming months as we see some important catalysts that will bring institutional and retail investors back to the crypto market."

The article comes from the Internet:It’s been a year since FTX collapsed. Are crypto market makers doing okay?

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