What Is Market Maker? 
Technical Analysis
6 min read time
|Updated: 2026-06-09
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Summary:
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Sufficient liquidity is necessary for transactions to occur smoothly in financial markets. In markets with low liquidity, buying and selling transactions can become difficult, and price fluctuations may become more severe. At this point, market makers contribute to a more balanced trading environment by continuously providing bid and ask prices.
Just as in traditional financial markets, the role of market makers is becoming increasingly important in
cryptocurrency markets. This content discusses what a market maker is, the roles they undertake, how market maker quotes work, and the fundamental differences between market makers and market takers.
What Is a Market Maker?
A market maker is an authorized institution that contributes to the smoother functioning of the trading environment by continuously quoting buy and sell prices for specific capital market instruments. These institutions provide buy and sell quotes for the relevant securities in line with market conditions and help support liquidity.
In the stock market, orders placed by investors may remain pending if no matching order is found. Market makers, however, support this trading flow with their bid and ask quotes, thereby helping to ensure that orders are filled within a healthier market structure.
Institutions wishing to engage in market-making activities on Borsa Istanbul must meet certain criteria. In this context, such institutions must be approved by the Borsa Istanbul Board of Directors and sign the Equity Market Market-Making Undertaking. Additionally, financial adequacy indicators, such as settlement defaults, are also considered during the evaluation process.
What Does a Market Maker Do?
A market maker helps maintain liquidity in securities traded on a continuous trading system. To this end, members designated as market makers provide two-way quotes, including price and volume information for both buy and sell orders through the accounts assigned to them. This helps ensure a more balanced flow of trading activity in the market.
The primary role of market makers is to limit sharp price movements that may arise from imbalances between supply and demand and to help create a more orderly trading environment. Especially for securities with low trading depth or limited public market value, market makers support these assets in trading more effectively in the market.
However, market makers do not merely contribute to price stability; they also have specific obligations regarding the prevention of conflicts of interest. By holding sufficient assets or securities in their portfolios, they can provide trading opportunities for both buyers and sellers. Additionally, certain products, such as investment firm warrants and certificates, can only be traded through the continuous trading method facilitated by market makers.
What Are the Characteristics of a Market Maker?
The title of “market maker” is granted to individuals or institutions that meet specific market-related qualifications and are recognized for their expertise in this field. Key characteristics of market makers include contributing to the more efficient execution of primary market transactions and supporting the continuity of trading in the secondary market.
In financial processes such as debt securities issuance, foreign exchange transactions, and similar activities conducted by treasuries or central banks, market makers may have specific rights and responsibilities. In this context, they may undertake tasks such as conducting uninterrupted trading in the secondary market, providing bid-ask quotes, and purchasing a specific portion of the issued securities.
What Is a Market Maker Quote?
A market maker quote consists of buy and sell prices and volume data submitted to the system by an authorized market maker. These quotes are used to support continuous trading in the relevant capital market instrument and to provide liquidity to the market.
More than one market maker may be assigned to a single capital market instrument. In such cases, different market maker quotes may exist for the same instrument. Quote quantities do not imply a separate price limit. As long as price limits are not exceeded, trades can be executed at levels above the quoted amount.
Quotes are displayed in the system similarly to regular orders. Additionally, market maker quotes can be entered during sessions where trading is conducted via a single-price method, such as the opening and closing sessions.
Do Market Makers Affect Crypto Prices?
Market makers may have an indirect impact on
crypto prices. This is because market makers contribute to increased market liquidity by continuously quoting prices for both buy and sell orders. In markets with high liquidity, investors can trade more easily, and bid-ask spreads can remain at more balanced levels.
This can help limit sudden price movements, particularly in crypto assets with low trading volume. For example, a large sell order in an altcoin with low liquidity can cause the price to drop sharply in a short period if there are insufficient buyers. The buy-sell quotes provided by market makers, however, can help ensure that such price fluctuations occur in a more controlled manner by increasing the depth of the order book.
However, market makers are not the parties that directly determine prices. Crypto prices are formed by the combined influence of many factors, including supply-demand balance, market sentiment, news flow, trading volume, and general market conditions.
Differences Between Market Makers and Market Takers
Market makers and market takers are the two main groups of participants that facilitate trading in a market. The key difference between them stems from their contribution to liquidity.
Market makers add liquidity to the order book by entering limit orders to buy or sell at a specific price level. These orders may not execute immediately and wait for a suitable counterparty to emerge. This creates tradable price levels in the market and increases the depth of the order book.
Market takers, on the other hand, execute trades by accepting existing orders in the order book. They typically use market orders, and their trades are executed instantly at the best available prices. Therefore, market takers utilize existing liquidity rather than adding liquidity to the order book.
In short, market makers are the party that provides liquidity to the market, while market takers are the party that executes trades by utilizing that liquidity. A healthy, functioning market requires the presence of both parties. Without market makers, sufficient trading depth cannot be established, and without market takers, executed orders would not be possible.
2026-06-09Legal Notice
The information, comments, and evaluations contained in this content do not constitute investment advice. This content is not intended to be prescriptive in any way and is intended to provide general information. It does not constitute investment advice. CoinTR cannot be held responsible for any transactions made based on this information or any losses that may arise.
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