Crypto market makers are collectively seeking change, as making money becomes increasingly difficult.

Original Author: momo, ChainCatcher

This year, veteran crypto market maker GSR has been making frequent moves.

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

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

What is the underlying strategy behind GSR's flurry of activities? What collective actions are other crypto market makers taking?

From Crypto Market Making to a “Web3 Investment Bank”

As early as 2025, GSR CEO Xin Song positioned the company as a “crypto capital market platform” and repeatedly mentioned its evolution into a “Web3 investment bank.”

He also cited the rationale for this transformation. In his view, the problem for crypto projects has never been just one aspect; the entire chain is fragmented. For example, token design, fundraising, listing, and liquidity arrangements require engaging separate institutions, whose objectives often misalign, leading to high coordination costs. Thus, GSR's aim is to consolidate services surrounding the token lifecycle into a single system as much as possible.

Towards this goal, starting last year or even earlier, GSR has been systematically building capabilities through licensing, acquisitions, and investments.

In early 2025, GSR obtained registration with the UK's FCA, entering the regulated system. It subsequently acquired Equilibrium Capital Services, a FINRA-registered broker-dealer in the US, and after regulatory approval this year, renamed it GSR Securities. This step not only adds a compliance identity but, more importantly, provides the capability to interface with traditional capital markets.

Beyond licensing, GSR has also started moving its services upstream to the earlier issuance stage.

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 token economic design and liquidity strategy.

Post-merger, the entire chain from token design, fundraising, and listing to market making begins to be streamlined. Previously, these stages were often handled by different entities, but they are now increasingly integrated into a single service system.

However, a more significant shift is the extension of services from “how to issue tokens” to “how to manage assets.”

In public interviews, GSR mentioned 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 a stable source of funding. Consequently, GSR is gradually expanding into asset management.

Beyond helping crypto enterprises build crypto treasuries last year, GSR 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 single portfolio and generates returns through a staking mechanism.

Simultaneously, GSR is also betting on the tokenization direction.

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

This cross-shareholding transforms the relationship from business cooperation to capital binding, providing GSR with more direct access to banking systems, institutional networks, and compliance channels.

In public disclosures, GSR also mentioned engaging with tokenization demands from 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 piece together the puzzle of a “Web3 investment bank.”

Collective Transformation of Crypto Market Makers

GSR is not an isolated case of transformation; it exemplifies the collective shift within the crypto market making industry.

Over the past year, the actions of leading market makers have shown a clear convergence: on one hand, continuously strengthening compliance and licensing frameworks; on the other, relentlessly expanding beyond core market making operations.

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

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

The underlying driving force is likely the transformation of the crypto market making industry from high profitability to a state of intense competition and low margin for error.

Firstly, “there is less money.” With the decline of altcoins and the bear market, project market-making budgets have significantly decreased. Projects themselves have also become smarter. After experiencing multiple cycles, they have a better understanding of market making mechanisms and profit margins.

Furthermore, there is a supply-demand imbalance: fewer projects are worth market making, yet the number of market makers has increased. Consequently, high-quality liquidity is increasingly concentrated among a few top-tier teams, while numerous 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 gains being squeezed thin.

Meanwhile, competition is expanding outward. New arenas like on-chain market making, derivatives, and tokenized assets continually emerge, causing the landscape for crypto market makers to diversify as the number of tracks increases. Market makers are now required to possess more systematic capabilities.

A more pressing factor is the pressure from compliance and risk events. Regulation is tightening rapidly. Following the gradual implementation of regimes in the US and the EU's MiCA, licenses and audits have become baseline requirements, not competitive advantages. Events like the extreme market volatility on October 11th last year reinforce one key realization: teams without systematic risk management capabilities will inevitably be weeded out.

In summary, the way profits are made in the crypto market making business has changed. The role of the crypto market maker seems to be transitioning from an industry reliant on information asymmetry and volatility into an institutionalized industry reshaped by compliance, client structure, and asset forms.