In the fast-evolving cryptocurrency landscape of Vietnam, investors are constantly seeking new ways to maximize their returns. While buying and holding assets is a common starting point, advanced traders understand that true market mastery comes from actively participating in its mechanics. One of the most powerful ways to do this is through market-making.
You may have seen the rapid price updates in an order book or wondered how you can always find a buyer or seller for your assets. The answer is market-making. This guide will demystify HIBT market-making strategies, showing how both new and experienced traders in Vietnam can leverage these techniques to generate consistent profits and contribute to market stability.
This is your complete guide to becoming a market maker on HIBT.
What is Market-Making?
First, you must understand the fundamentals. Market-making is the act of providing liquidity to a financial market by simultaneously placing both a buy (bid) and a sell (ask) order for an asset. Market makers profit from the difference between these two prices, known as the bid-ask spread.
Imagine a popular currency exchange in Ho Chi Minh City. To operate, it must always be ready to buy US dollars from tourists and sell them to locals. The price at which they buy is slightly lower than the price at which they sell. That small difference is their profit.
In the crypto world, a market maker does the same thing on an exchange like HIBT. They ensure there is always liquidity, allowing traders to execute their orders instantly without causing massive price swings.
Why Market-Making is Essential for a Healthy Crypto Market
A market without market makers is illiquid and inefficient.
- High Slippage: When you place a large order in an illiquid market, the price can move significantly before your order is filled. This is called slippage, and it costs you money.
- Wide Spreads: The gap between the best buy price and the best sell price is wide, making it expensive to trade.
- Low Volume: Traders avoid illiquid markets, leading to a downward spiral of low activity.
Market makers solve these problems. By constantly quoting buy and sell prices, they tighten the spread, absorb large orders, and create a vibrant, liquid trading environment. This foundation of liquidity is what makes platforms like HIBT reliable for millions of users.
Core Market-Making Strategies You Can Use on HIBT
HIBT provides the tools necessary to implement a range of market-making strategies, from simple to complex. Here are the most effective approaches for the Vietnamese market.
1. Simple Static Spread Strategy
This is the foundational strategy and the best starting point for beginners.
How It Works:
You place a buy order a certain percentage below the current market price and a sell order the same percentage above it. For example, if Bitcoin is trading at $60,000, you might place a buy order at $59,700 (0.5% below) and a sell order at $60,300 (0.5% above).
- Goal: Capture the spread. If both your buy and sell orders are filled, you make a profit of $600 on one Bitcoin.
- Execution on HIBT: Use Limit Orders to set your precise bid and ask prices. HIBT’s high-performance order matching engine ensures your orders are placed in the book instantly.
Example Scenario:
- User: Linh, a university student in Hanoi, wants to start market-making for a popular new altcoin trading at 20,000 VND.
- Action: She places a limit buy order at 19,900 VND and a limit sell order at 20,100 VND.
- Outcome: As traders buy and sell the altcoin, both of her orders get filled. She successfully captures the 200 VND spread multiple times throughout the day, generating a small but consistent income stream.
2. Dynamic Spread Strategy
Markets are not static. Volatility changes, and so should your strategy.
How It Works:
This strategy involves adjusting your spread based on market volatility.
- High Volatility: When the market is moving quickly, you widen your spread to protect yourself from rapid price changes and capture larger profits. For example, you might set a 1% spread instead of 0.5%.
- Low Volatility: In a calm, stable market, you tighten your spread to remain competitive and increase the chances of your orders being filled. You might use a 0.2% spread.
Execution on HIBT: This strategy requires active management or the use of trading bots via HIBT’s API. You can monitor market volatility indicators and manually adjust your limit orders or program a bot to do it automatically.
3. Inventory Management Strategy
A key risk for market makers is holding too much of an asset that is declining in value (or too little of one that is rising). This is known as inventory risk.
How It Works:
You adjust your bid and ask prices to manage your inventory levels.
- Too Much Inventory: If you have bought too much of an asset and your inventory is high, you can lower both your bid and ask prices. This makes your sell order more attractive and your buy order less attractive, encouraging the market to buy from you.
- Too Little Inventory: If you have sold too much and are running low on the asset, you can raise both your bid and ask prices. This makes your buy order more attractive, helping you replenish your inventory.
Example Scenario:
- User: Tuan, an experienced trader in Da Nang, is market-making ETH/USDT.
- Situation: After a series of buy orders are filled, his ETH balance is much higher than his USDT balance. He is worried the price of ETH might drop.
- Action: He cancels his existing orders and places new ones at a slightly lower price point. His sell order for ETH becomes more competitive, and it gets filled quickly, rebalancing his portfolio back toward USDT.
Leveraging HIBT Features for Market-Making Success
To be a successful market maker, you need a platform with the right tools. HIBT is engineered to give you a competitive edge.
High-Performance Order Matching Engine
Market-making is a game of speed. HIBT’s low-latency order matching engine ensures your orders are placed, updated, and cancelled in microseconds. When volatility spikes, you can trust that the platform will not lag or freeze, allowing you to manage your risk effectively.
Robust API Access
For serious market makers, automation is key. HIBT offers a comprehensive and reliable API (Application Programming Interface) that allows you to connect your trading bots directly to our exchange. You can automate your strategies, execute orders at lightning speed, and operate 24/7 without manual intervention.
Low Trading Fees
Market makers execute a high volume of trades. HIBT’s competitive fee structure, especially for high-volume traders, ensures that transaction costs do not eat into your profits. The more you trade, the lower your fees become, maximizing your earnings from the spread.
Empower your investments with our advanced tools at HIBT.
Market-Making Through Liquidity Pools on HIBT
For those who want to participate in market-making without manually placing orders, HIBT offers another powerful avenue: Liquidity Pools.
How It Works:
Instead of setting bid and ask prices, you deposit a pair of assets into a pool. An Automated Market Maker (AMM) algorithm then uses these funds to facilitate trades for other users.
- Your Role: As a Liquidity Provider (LP), you are passively market-making.
- Your Reward: You earn a share of the transaction fees generated by the pool.
This strategy is perfect for investors who want to earn passive income from their assets. While it involves a different set of risks, like Impermanent Loss, it is an accessible way for anyone to become a market maker.
Case Study: Passive Market-Making
- User: Mai, a busy professional in Ho Chi Minh City. She doesn't have time to actively manage trades.
- Action: She deposits her BTC and USDT into the HIBT BTC/USDT liquidity pool.
- Outcome: Her assets are now being used to provide liquidity for traders on the platform. Every day, she earns a portion of the trading fees generated by that pair. Her crypto is working for her while she focuses on her career.
Advanced Considerations for Aspiring Market Makers
As you gain experience, you can incorporate more sophisticated elements into your strategy.
Multi-Exchange Market-Making (Arbitrage)
This strategy involves market-making on HIBT while monitoring prices on other exchanges. If you notice a significant price difference between exchanges, you can execute a trade to capture a risk-free profit.
- Example: If Bitcoin is cheaper on another exchange, you can buy it there and simultaneously sell it for a higher price on HIBT. This requires speed and automation.
Delta-Neutral Strategies
This involves hedging your inventory risk. For example, if you are market-making a volatile altcoin, you might simultaneously open a short position on a futures contract for that same coin. This can help neutralize losses if the asset's price plummets. HIBT offers a full suite of spot and derivatives products to facilitate such advanced strategies.
Understanding Order Book Dynamics
A key skill for a market maker is reading the order book. By analyzing the depth of the buy and sell walls, you can gauge market sentiment and anticipate price movements.
- Thick Buy Wall: Indicates strong support and potential for the price to rise.
- Thick Sell Wall: Indicates strong resistance and potential for the price to fall.
Use this information on the HIBT trading interface to position your orders more intelligently.
Conclusion
Market-making is the engine that powers liquid and efficient crypto markets. For Vietnamese investors, it represents a significant opportunity to move beyond passive holding and actively generate income from the market's natural activity. Whether you start with a simple static spread strategy or dive into the world of automated bots and liquidity pools, HIBT market-making strategies offer a path to greater profitability.
With HIBT’s robust technology, low fees, and user-friendly platform, you have all the tools you need to succeed. Start small, manage your risk, and begin your journey toward mastering the market.
Join the community and trade effortlessly at HIBT.
About the Author
Dr. Nguyen Thanh Trung
Ph.D. in Algorithmic Trading and Financial Engineering
Dr. Nguyen Thanh Trung is a leading voice in quantitative finance and market microstructure. He holds a Ph.D. from the National University of Singapore, where his research focused on high-frequency trading and risk management protocols. Dr. Trung has published 22 peer-reviewed papers on topics ranging from market liquidity to the efficiency of automated trading systems. He was the lead technical auditor for the Saigon Blockchain Initiative, a prominent project that assessed the infrastructure of regional digital asset exchanges. He currently consults for several fintech firms in Southeast Asia, helping them optimize their trading systems for institutional-grade performance.