Masterminds Behind the Scenes: Revealing How Crypto Market Makers “Create” Market Movements and Harvest Volatility

Behind the clamor of the crypto world, a silent war is waged every day. The two sides of this war are the heavily armed modern market makers and the opportunity-seeking retail investors. The weapons of this war are no longer just simple bids and asks, but a set of sophisticated tactics combining capital, chips, derivatives, and public opinion.

In the past, market makers were more like the “service providers” of the market, offering two-way quotes on exchange order books and earning slim spreads—their core role was to maintain liquidity. But today, top market makers have evolved into “dominators” of the market. Their core objective is no longer to serve the market but to capture volatility.

Their motto is: “We don’t predict the market—we create the market.”

Act One: Strategic Transformation—From “Passive Market Making” to “Active Market Control”

To achieve the transition from “service provider” to “dominator,” the business model of market makers has fundamentally changed:

· Old Model: Earning the Spread
· Battlefield: primarily spot markets.
· Method: Posting simultaneous buy and sell orders on the order book—for example, buying at $100 and selling at $101. Regardless of price movement, as long as trades occur, they earn a $1 spread.
· Role: Market lubricant, dependent on trading frequency.
· New Model: Harvesting Volatility
· Battlefield: Interconnected spot and derivatives (perpetual contracts) markets.
· Method: Treating spot as a tool and the derivatives market as the main battlefield. Profits come from massive directional price swings, not tiny spreads.
· Role: Both the director and the star of the market show.

Act Two: Tactical Execution—A Full “Long-Short Double Kill” Cycle

Here is the classic combo move of today’s active market makers, perfectly illustrating how they “make the market”:

Step 1: Low-Price Positioning, Moving in the Shadows

· Spot Market: When market attention is low and prices are at the bottom, market makers patiently and discreetly accumulate spot tokens. This process is quiet, avoiding early price surges.
· Derivatives Market: Simultaneously, market makers quietly build large long positions in perpetual contracts across major exchanges. This becomes one of their main sources of profit later.

Step 2: Pumping the Spot, Creating a Legend

· Pump Initiation: Using their own funds or external financing as “ammunition,” they begin concentrated, continuous buying of spot assets, rapidly pushing prices higher. The candlestick chart shows a nearly vertical uptrend, creating the visual effect of a “skyrocketing legend.”
· FOMO Effect: Sharp price rises naturally attract massive retail attention. Fear of missing out (FOMO) spreads, retail investors rush to buy in, pushing prices even higher and creating the perfect exit environment for market makers.

Step 3: Derivatives Harvest, Escape Unscathed

· Closing Longs for Profit: When the price reaches the preset high and market sentiment is extremely greedy, market makers close all their long positions in the derivatives market. Thanks to leverage, these profits are enormous.
· Reversing Positions: While closing longs, they may have already started building short positions in preparation for the next phase.

Step 4: Sudden Reversal, Brutal Dump

· Spot Dumping: Without warning, market makers start offloading the previously accumulated low-priced spot tokens in large quantities. The huge sell pressure instantly overwhelms the buy side, causing a flash crash in price.
· Cascade Liquidations: The rapid price drop first traps the retail investors who chased the highs. More importantly, it triggers mass forced liquidations of long leveraged positions in the derivatives market. These forced sales accelerate the price crash like an avalanche.

Step 5: Closing Shorts, Completing the Cycle

· Profiting from Shorts: Amid market panic, market makers close their short positions, reaping massive profits again.
· Back to Square One: When the price falls back or even below the original starting level and market sentiment hits rock bottom, market makers re-enter, quietly accumulating tokens and waiting for the next cycle to begin.

From MYX to COAI, AIA, and every “miracle coin” that has seen dramatic surges and plunges in a bear market, this playbook can be seen behind the scenes. Every “legend” birthed is a precise hunt for retail investors’ wealth.

Act Three: Ecosystem Coordination—The Market Makers’ “Arms Supply Chain”

Such precise operations cannot be accomplished by market makers alone; they rely on a mature “token launch assembly line” ecosystem:

1. Exchanges (providing the battlefield and rules): Platforms offer a standardized “prey” through industrialized listing models. The exchange gains trading volume, market makers get a stage, forming a win-win.
2. Off-exchange Financing (providing ammunition): Pumping requires real capital. Specialized “pump financing” services for market makers and project teams have emerged. The financiers provide the money, market makers provide the strategy, project teams provide the tokens, and profits are shared.
3. Project Teams and KOLs (providing “bag holders”): The pump needs visibility and followers. Project teams hire KOLs through agencies, leveraging their brand, exposure, and buyer traffic to create hype during the pump phase and attract retail investors to take over. Pre-allocated “KOL rounds” of tokens tie KOL interests deeply to the token price, incentivizing them to shill hard.

Conclusion: Survival in the Age of Dancing with Wolves

Modern crypto market making has evolved into a financial engineering system that combines capital, information, derivative tools, and psychology. Market makers are no longer just liquidity providers—they are manufacturers and harvesters of volatility.

This system is so efficient that the traditional path of “building products—accumulating users—creating value” seems slow and inefficient by comparison. For market participants, understanding this game is no longer just a requirement for speculation—it’s a necessary survival skill.

In this market maker–dominated game, every player must answer the ultimate question: Do you clearly know if you are the hunter or the prey? If you can't be the one creating liquidity and volatility, at the very least, learn not to be the one paying for volatility. #参与创作者认证计划月领$10,000