The crypto market-making industry is collectively seeking change, as it becomes increasingly difficult to make money.

Original Author: momo, ChainCatcher

Since the beginning of this year, the established crypto market maker GSR has been making frequent moves.

Recently, GSR announced the completion of its acquisition of SEC-registered broker-dealer Equilibrium Capital Services, renaming it GSR Securities. This means GSR has obtained a broker-dealer license regulated by the U.S. FINRA, enabling it to participate in the trading and brokerage of securities-class digital assets within the U.S. compliance framework.

Prior to this, it had already completed several key strategic deployments: acquiring two token advisory firms in March, co-launching a crypto ETF on Nasdaq in April, while investing in the tokenization platform Libeara, and securing a strategic investment from Standard Chartered's SC Ventures in May.

What is the strategic intent behind GSR's intensive actions? And what collective moves are other crypto market makers making?

From Crypto Market Making to a "Web3 Investment Bank"

As early as 2025, GSR CEO Xin Song had positioned the company as a "crypto capital markets platform," frequently mentioning its evolution towards a "Web3 investment bank."

He also outlined the rationale for this transformation. In his view, the problem for crypto projects has never been just one single element, but that the entire chain is fragmented. For example, from token design, fundraising, and listing to liquidity arrangements, projects must engage with different institutions, which often have misaligned objectives, leading to high coordination costs. Therefore, their goal is to consolidate services related to the token lifecycle into a single, unified system.

Pursuing this direction, starting last year or even earlier, GSR has been continuously building its capabilities through licensing, acquisitions, and investments.

In early 2025, GSR obtained registration from the UK's FCA, entering a regulated framework. Subsequently, it acquired the FINRA-registered broker-dealer Equilibrium Capital Services, and after completing regulatory approvals this year, renamed it GSR Securities. This change is not merely about adding a compliance identity; it provides GSR with the interface capabilities to access traditional capital markets.

Beyond licensing, GSR has also begun to move its services upstream to the earlier issuance phase.

In March of this year, it acquired Autonomous and Architech for $57 million. The former focuses on foundation operations and fundraising coordination, while the latter specializes in tokenomics design and liquidity strategies.

Following the merger, the entire chain from token design, fundraising, and listing to market making began to be streamlined. Previously, these stages were often dispersed across different institutions, but now they are gradually being integrated into a single service system.

However, the more significant change is the extension of services from "how to issue tokens" to "how to manage assets."

In public interviews, GSR noted that many foundations and protocols hold large amounts of their own tokens early on but lack mature financial systems to manage these assets. This results in highly concentrated, extremely volatile holdings that struggle to form stable funding sources. Therefore, GSR is also progressively expanding into asset management.

Beyond helping crypto enterprises build crypto treasuries last year, GSR has also started launching ETF funds this year.

In April of this year, GSR launched its first ETF, the GSR Crypto Core3 ETF, which combines Bitcoin, Ethereum, and Solana into a unified portfolio and generates returns through a staking mechanism.

Simultaneously, GSR is also betting on the tokenization trend.

This year, it invested in Libeara, incubated by Standard Chartered's SC Ventures. This platform already supports the issuance of over $1 billion in on-chain assets and holds relevant licenses from Singapore's MAS. Interestingly, shortly after this investment, SC Ventures made a reciprocal equity investment in GSR, becoming its first external strategic shareholder since its founding in 2013.

This cross-shareholding transforms the relationship from a mere business partnership to capital ties, providing GSR with more direct access to banking systems, institutional networks, and compliant channels.

In public disclosures, GSR also mentioned engaging with tokenization needs for various assets, including film studios, farmland, real estate, and accounts receivable.

From licensing and compliance capabilities to advisory, issuance, market making, asset management, and secondary liquidity, GSR is attempting to gradually complete the puzzle of a "Web3 investment bank."

The Collective Transformation of Crypto Market Makers

GSR is not an isolated case of transformation but rather a microcosm of the collective evolution within the crypto market making industry.

Over the past year, the actions of leading market makers have shown a clear convergence. On one hand, they are continuously strengthening compliance and licensing frameworks; on the other, they are actively expanding business beyond traditional market making.

For instance, Keyrock is entering the U.S. market and establishing a New York office while simultaneously advancing its compliance layout under the EU's MiCA framework, and entering the asset management business by acquiring a fund management company. B2C2 secured a MiCA authorization, expanding its business into more complex institutional OTC and stablecoin exchange scenarios. Wintermute, while strengthening its institutional trading capabilities, is also venturing into new areas like prediction markets, DeFi vault curation, and tokenized gold trading. DWF Labs is attempting to extend from liquidity provision towards real-world assets, including gold trading and physical delivery.

Crypto market makers seem to be charting a similar path: first, entering mainstream regulatory systems through licensing and geographic expansion; second, penetrating the institutional market with OTC and institutional liquidity as core businesses; and third, gradually extending towards asset management, tokenized assets, and more complex financial products.

The underlying driving force is likely the industry's transition from high-profit margins to a state of intense competition and low tolerance for error.

Firstly, the "money has shrunk." With the decline of altcoins and the bear market, project budgets for market making have also significantly decreased. Furthermore, project teams have become smarter. After experiencing multiple market cycles, they have a better understanding of market making mechanisms and profit margins.

Additionally, there is the issue of "too many players chasing too few opportunities." The number of projects with viable market making potential has decreased, while the number of market makers has increased. The result is that high-quality liquidity is increasingly concentrated among a few top-tier teams, while a vast number of long-tail projects are neither profitable nor offer growth potential. Many market makers are essentially competing for limited returns within an ever-narrowing space, with marginal returns getting squeezed.

Simultaneously, competition is expanding outward. New arenas like on-chain market making, derivatives, and tokenized assets are constantly emerging, causing the landscape for crypto market makers to begin diversifying. Market makers are now required to possess more systematic capabilities.

A more challenging factor to ignore is the pressure from compliance and risk incidents. Regulation is tightening rapidly. With the gradual implementation of frameworks in the US and the EU's MiCA, licenses and audits have become basic entry requirements rather than competitive advantages. Compounded by extreme market events like the one on October 11th last year, this directly reinforces the understanding that teams without systematic risk management capabilities will eventually be weeded out.

In summary, the way money is made in the crypto market making business has changed. The role of the crypto market maker seems to be evolving from a trading industry reliant on information asymmetry and volatility into an institutionalized industry reshaped by compliance, customer structure, and asset forms.