The liquidity issue in altcoins is a critical challenge, causing many to fade away over time. Thus, aside from technology, development, and marketing, having a market maker partner is crucial for cryptocurrency ventures. Recently, Algorand announced a significant development in this area.
Algorand Enhances Its Market Maker Strategy
Despite institutional entries, the crypto markets remain shallow. Liquidity concerns are particularly evident when excluding major assets like Bitcoin $112,430 and Ethereum $4,491 . Without consistent liquidity, trading becomes inefficient, volatile, and costly, often resulting in losses for investors due to speculative movements.
Market makers play a vital role in addressing these issues. They enhance trading by supplying liquidity to order books. After the 2022 FTX collapse, many major market makers exited the sector, prompting in-depth discussions about these challenges for the past few years.
In a recent announcement, the Algorand Foundation revealed a partnership with XBTO, a leading global institutional crypto asset manager. XBTO will act as a strategic market maker for ALGO on Tier-1 and Tier-2 exchanges. Consequently, traders can expect improved order books and deeper liquidity across almost all centralized exchanges where they trade.
Alongside market making for ALGO, there is additional exciting news.
“The partnership with XBTO will facilitate seamless USDC stablecoin transfers between custodial wallets and exchanges as part of rebalancing and treasury operations using Algorand’s high-speed, low-cost blockchain infrastructure. Enhanced interoperability ensures Algorand’s ecosystem remains efficient and integrated within the broader crypto asset landscape.” – Algorand Foundation
Algorand’s Future Prospects
Launched in 2019, ALGO gained recognition in 2021 for its partnership with El Salvador, highlighting its low fees and instant finality. However, the subsequent bear markets disrupted its progress. Fortunately, ALGO remains resilient.
The altcoin has maintained support above the $0.2426 level for some time. While closing above $0.2872 in the short term is crucial, distancing from the $0.175 base is significant. Like many altcoins, ALGO has been awaiting favorable conditions for a new high for 218 days.
Although it hasn’t returned to levels seen during the U.S. election rally, it’s expected to reach $0.6 before the cycle ends. This market maker partnership could be a key factor in supporting this goal and beyond.
