2022 Crisis to 2024 Bull Run: How Market Making Evolved from Survival to Innovation - CLS Global Insights

Dec 17, 2024, 4:31 p.m.

The cryptocurrency market's dramatic transformation over recent years tells a compelling story of resilience and innovation. Daily trading volumes surged from $10 billion to $100 billion, but raw numbers only scratch the surface. What emerged wasn't just a recovery – it was a complete reinvention of market making.

The evolution of market making

The market downturn eliminated 40% of market makers, forcing survivors to revolutionize their approach. Traditional 0.1% spreads expanded to 1-2% as liquidity evaporated. Delta-neutral strategies, previously used by only 15% of market makers, became the industry standard as the landscape evolved.

"The traditional playbook stopped working when volatility hit 95% for major tokens," explains Filipp Veselov, CEO of CLS Global. "Market makers needed new solutions for unprecedented challenges."

The retail revolution

Then came an unexpected catalyst: meme coins. What started as a crypto curiosity became a force that revolutionized market making strategies. Traditional approaches, built for institutional trading, couldn't handle the unique challenges of community-driven tokens.

Market makers processing 100,000 orders daily now handle millions. Advanced algorithms reduced average slippage from 2.5% to 0.3% across major exchanges. The meme coin explosion tested these systems further, with daily volatility averaging 150%, requiring innovative risk management approaches.

Case study: How VIRTUAL grew from $28M to $1.68B

The transformation of market making strategies is perfectly illustrated by CLS Global's work with Virtuals Protocol (VIRTUAL), an AI-driven Metaverse project that experienced extraordinary growth in late 2024. VIRTUAL approached CLS Global in September 2024. The challenge wasn't just providing liquidity – it was preparing for explosive growth while maintaining market stability.

"Traditional market making approaches simply wouldn't work for a token experiencing such rapid growth," notes Filipp Veselov. "We needed to implement dynamic systems that could handle both the volume surge and maintain tight spreads during periods of extreme volatility."

The results speak for themselves. VIRTUAL expanded to major exchanges including Bybit, KuCoin and Bitget. Despite this explosive growth, advanced market making algorithms maintained market stability even as the token price increased by 6,700%, reaching an ATH of $2.31 and propelling VIRTUAL to rank #61 by market cap at $1.68 billion.

Beyond traditional market making: Evolution into comprehensive digital asset services

Modern crypto markets need more than just liquidity providers – they need comprehensive partners who understand both traditional finance and crypto's unique dynamics. CLS Global recognized this shift early, expanding into full-service digital asset solutions while growing its project partnerships by 70% through 2024.

The company is rapidly expanding its team and capabilities, focusing particularly on bringing traditional businesses into the crypto space through comprehensive token launch support services. This transformation reflects CLS Global's commitment to bridging the gap between traditional finance and digital assets.

Key services now include:

Comprehensive legal framework development for traditional companies entering crypto
End-to-end listing support across top 10 exchanges
Advanced trading infrastructure implementation
Strategic partnership consulting
Full-spectrum digital asset services

The future of market making

As daily volumes approach $200 billion, sophisticated market infrastructure becomes increasingly crucial. CLS Global's evolution into a comprehensive digital asset solutions provider reflects this new reality. The company continues to expand its capabilities across several key areas:

Strategic growth initiatives

Building relationships with over 60 VC funds/advisors
Developing comprehensive technical and business roadmaps
Establishing stronger connections with major exchanges (Binance, Kucoin, Huobi, MEXC)
Enhancing marketing capabilities and partnerships

Digital asset solutions

Project valuation and analysis
Primary and secondary listing management
Strategic roadshow organization and execution
Full legal setup for traditional companies entering crypto
Comprehensive token launch support

Conclusion

The transformation of market making represents more than just recovery – it's a complete reinvention of how digital assets are traded and managed. As CLS Global continues its evolution into a comprehensive digital asset solutions provider, it stands ready to guide both crypto-native and traditional projects through their next phase of growth.

Looking ahead, the focus remains on building robust infrastructure that can support the next generation of digital asset trading while providing comprehensive support for projects entering the space. With its expanding team and growing capabilities, CLS Global is positioned to lead this evolution, serving as a bridge between traditional finance and the future of digital assets.