What Happens to Crypto if Market Makers Dissapear?
Summary
- Market Makers (MMs) are the "adults in the room" necessary for institutional adoption; without them, volatility would spike, and liquidity would evaporate, making the asset class uninvestable for large funds (e.g., pension funds).
- The "Post-TGE Dump" is structurally inherent to current crypto tokenomics. Projects focus on exchange listings rather than demand generation, leading to airdrop recipients immediately selling into thin books.
- Two major sector rotations identified for the year: Real World Assets (RWAs) and Prediction Markets.
- Decentralized Exchanges (DEXs) are flipping Centralized Exchanges (CEXs) on volume for specific products, with Hyperliquid and Lighter explicitly named as outperforming centralized counterparts.
Trade Ideas
Jason argues that without MMs, the industry goes backward on the "path towards institutionalization." He notes that pension funds need to enter and exit "in size" without moving the market. BTC and ETH are the only assets with sufficient liquidity depth to support the "diversified set of investors" (institutions) the panel describes. As volatility drops via MM participation, these assets become eligible for massive TradFi allocations. LONG the majors as the only investable grade assets for the incoming institutional wave. A "deleveraging event" or infrastructure failure (MMs disappearing) would cause liquidity to evaporate instantly.
The panel discusses how prediction markets (like Polymarket) are hiring market makers to bootstrap liquidity because current liquidity is thin ($50k depth). The hiring of professional MMs signals a move from niche gambling to robust financial venues. Improved liquidity attracts larger players who were previously sidelined by slippage. LONG the sector as it professionalizes. Regulatory bans on election/event betting in major jurisdictions (e.g., CFTC vs. Polymarket).
CJ explicitly states, "RWA is something that everybody's looking at... 90% of consensus this year is going to cover these topics." He notes Tether (USDT) is the most successful RWA to date. As TradFi market makers and banks enter the space (which CJ notes is happening), capital will flow primarily into assets that bridge Web2 and Web3 (securities/RWAs). LONG the RWA narrative and infrastructure. Regulatory classification of RWAs as unregistered securities leading to delistings.
Jordy states that decentralized exchanges like Hyperliquid and Lighter are sometimes "trading higher volume than the centralized exchanges on these products." This indicates a structural shift in market share from CEX to DEX, specifically for perpetuals and niche markets. High volume is the precursor to liquidity network effects. LONG the leading perp DEXs as they capture institutional volume. Regulatory crackdowns on DeFi interfaces or smart contract exploits.
Jordy notes that recently, "the amount of trading that was happening on silver was insane... it was Bitcoin and then silver and then ETH." When a specific commodity sees volume rivaling the largest crypto assets on chain/derivatives platforms, it indicates a massive repricing or speculative interest event is underway. WATCH for breakout volatility in Silver due to anomalous volume spikes. Volume could be wash trading or temporary speculative mania that fades quickly.
CJ Fong
Managing Director & Head of APAC Sales, GSR
CJ explains that when projects do a TGE (Token Generation Event) and airdrop tokens, "the first thing most people do is sell." He criticizes founders for not asking "who is going to buy my token and why?" Most new launches have structural sell pressure (airdrops) and zero organic buy pressure (no product-market fit). MMs cannot stop this price decline; they only smooth it out. AVOID or SHORT new token launches that lack a clear buyer thesis beyond "we listed on Binance." A hyped narrative (e.g., AI) could cause irrational buying despite poor tokenomics.
Up Next
This CoinDesk video, published February 27, 2026, features Jason Atkins, CJ Fong, Jordi Alexander discussing BTC, ETH, POLYMARKET, DKNG, USDT, HYPE, LIT, SILVER, ALTCOINS. 6 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Jason Atkins, CJ Fong, Jordi Alexander · Tickers: BTC, ETH, POLYMARKET, DKNG, USDT, HYPE, LIT, SILVER, ALTCOINS