Market maker struggles describe difficulties experienced by entities that provide liquidity to digital asset markets by simultaneously placing buy and sell orders. These difficulties can stem from high market volatility, unexpected price movements, or insufficient capital to maintain positions. Such struggles can lead to reduced liquidity, wider bid-ask spreads, and increased price slippage. They often signal an unstable market environment or operational inefficiencies.
Context
Reports on market maker struggles frequently surface during periods of significant market downturns or regulatory uncertainty in the crypto space. The ability of market makers to operate effectively is vital for maintaining healthy trading environments. Discussions often focus on the impact of these struggles on overall market efficiency and investor confidence.
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