Crypto.com Hires Internal Market Maker for Prediction Markets to Boost Liquidity Amid Scrutiny

• Crypto.com’s internal market maker operates under the same rules as external providers, promoting transparency and market integrity in prediction markets.

• The initiative focuses on boosting liquidity for contracts tied to sporting events and other outcomes, improving user experience without proprietary advantages.

• Similar to competitors like Kalshi and Polymarket, which reported trading volumes surging to over $1 billion monthly during the 2024 US presidential election, Crypto.com aims to meet rising demand in regulated event contracts.

Crypto.com internal market maker boosts prediction markets liquidity with regulatory compliance. Discover how this enhances trading fairness and user access in crypto’s evolving landscape. Stay informed on key developments today.

What is Crypto.com’s Internal Market Maker for Prediction Markets?

Crypto.com’s internal market maker is a dedicated trading team designed to provide liquidity in the company’s prediction markets platform, where users bet on the outcomes of real-world events like sporting events. This initiative, fully disclosed to the US Commodity Futures Trading Commission, ensures that trading remains fair and efficient without giving the internal team any unfair advantages over external market makers or customers. By facilitating buys and sells of outcome contracts, it aims to create a more competitive environment that benefits all participants.

The role of a quant trader in this setup involves developing strategies to maintain steady market depth, particularly for North American derivatives. According to a job posting highlighted in reports from Bloomberg, the position requires expertise in quantitative analysis to handle the unique dynamics of prediction markets, which differ from traditional crypto trading by focusing on probabilistic outcomes rather than asset prices. This expansion reflects Crypto.com’s broader push into regulated financial products, aligning with federal guidelines to mitigate risks associated with event-based trading.

How Does Market Making Enhance Liquidity in Crypto.com’s Prediction Markets?

Market making in prediction markets involves continuously quoting buy and sell prices for contracts, ensuring users can enter or exit positions without significant price swings. For Crypto.com, this internal approach mirrors industry standards used by platforms like Kalshi, where designated market makers such as Susquehanna International Group have provided liquidity since 2024, contributing to volume growth amid high-profile events. Bloomberg reports indicate that Polymarket, another key player, saw monthly trading volumes exceed $1 billion during the 2024 US presidential election, underscoring the need for robust liquidity to handle surges.

Experts emphasize that effective market making reduces spreads and slippage, making platforms more attractive to retail users. A spokesperson for Crypto.com noted, “More competition and liquidity on the platform creates a better overall experience,” highlighting that the internal team adheres to identical rules as external providers. This structure addresses potential conflicts of interest by prohibiting access to customer order flow or proprietary data, as confirmed in disclosures to regulators. Data from similar platforms shows that liquidity provision can increase trading activity by up to 30%, fostering market integrity without relying on proprietary trading for revenue. Crypto.com’s model remains risk-neutral, focusing on fees from digital asset access rather than directional bets.

The practice isn’t isolated to crypto exchanges; traditional finance has long used market makers in derivatives markets to stabilize trading. In prediction markets, this is particularly crucial due to the binary nature of outcomes—win or lose—which can lead to rapid volume spikes. By building an in-house team, Crypto.com positions itself to respond nimbly to these fluctuations, supporting its North American derivatives business while complying with stringent oversight from bodies like the CFTC.

Frequently Asked Questions

Is Crypto.com’s Internal Market Maker Compliant with US Regulations for Prediction Markets?

Crypto.com’s internal market maker fully complies with US federal regulations, as it is disclosed to the US Commodity Futures Trading Commission and operates across its North American derivatives business. The company ensures no preferential treatment, with all market makers following the same fairness protocols to prevent conflicts of interest in prediction markets trading.

Why Is Crypto.com Expanding Its Prediction Markets with an Internal Trading Team?

Crypto.com is building an internal trading team to improve liquidity and competition in its prediction markets, especially for event contracts like sports outcomes. This enhances the platform’s overall user experience by narrowing spreads and ensuring efficient trading, all while maintaining regulatory alignment and market neutrality.

Key Takeaways

• Regulatory Compliance: Crypto.com’s internal market maker is transparent with the CFTC, operating under rules that ensure fairness and eliminate advantages like first-look access to orders.
• Liquidity Boost: By providing consistent buy-sell quotes, the team supports higher trading volumes, similar to surges seen on platforms like Polymarket during major events.
• Industry Standard: This approach aligns with competitors such as Kalshi, promoting a competitive environment that benefits users without relying on proprietary revenue streams.

Source: Bloomberg

The broader context of prediction markets reveals a maturing sector where liquidity is paramount. Platforms like Crypto.com are adapting to meet user demand for reliable event betting, drawing parallels to established financial instruments. Reports from Bloomberg detail how this internal structure avoids the pitfalls of opaque trading, with the spokesperson affirming, “We have a simple business model providing our retail customers access to digital assets for a fee, while staying risk neutral.” This risk-neutral stance differentiates it from speculative ventures, focusing instead on infrastructure that supports sustainable growth.

Scrutiny around exchanges trading against customers is not new, but Crypto.com’s disclosures aim to build trust. In prediction markets, where outcomes are tied to verifiable events, maintaining integrity is key to adoption. Quantitative traders in this role will leverage algorithms to balance books, ensuring the platform can scale with increasing participation from both crypto natives and traditional finance users.

Competitors provide benchmarks for success. Kalshi’s use of external firms like Susquehanna has stabilized its federally regulated exchange, handling diverse contracts from elections to economic indicators. Polymarket’s decentralized model, while innovative, is also incorporating internal units to manage liquidity post its election-year boom. These examples illustrate a trend toward hybrid liquidity solutions in prediction markets, where internal capabilities complement external providers.

Polymarket’s monthly volumes began to surge in the run-up to the 2024 US presidential election. Source: Dune

As prediction markets evolve, regulatory clarity will be essential. The CFTC’s oversight ensures that innovations like Crypto.com’s internal market maker contribute positively, potentially setting standards for the industry. Users benefit from tighter markets, while the platform gains efficiency without compromising ethics.

Conclusion

Crypto.com’s internal market maker represents a strategic step to fortify its prediction markets with enhanced liquidity and regulatory adherence, addressing key challenges in event-based trading. By aligning with practices seen in platforms like Kalshi and Polymarket, it fosters a fair ecosystem that prioritizes user experience and market integrity. As this sector continues to expand in 2025, staying attuned to such developments will be crucial for traders navigating crypto’s intersection with traditional finance—explore Crypto.com’s offerings to capitalize on these opportunities.