After a three-month slide, the market cap of 100 largest cryptocurrencies reached €349B ($425B) this week. But when trading increases in nascent markets, the availability of cash on hand or an asset that can be readily converted to cash becomes a major challenge. The problem is especially true for the young and inefficient crypto market. Brussels-based startup Keyrock is trying to solve the problem by providing liquidity and market making services to the crypto ecosystem.
The startup raised €900k in a seed round led by Volta Ventures. Other investors include Brussels-based Seeder Fund, Luxembourg-based TNN Capital, and experienced crypto investors. Keyrock plans to use the funding proceeds to accelerate product and business development.
What’s market making?
The U.S SEC (Securities & Exchange Commission) defines a ‘market maker’ as “a firm that stands ready to buy and sell a particular stock on a regular and continuous basis at a publicly quoted price.” In Keyrock’s case, it will deal in cryptocurrencies instead of stocks.
Keyrock’s core job will be to hold inventory of cryptocurrencies currently traded on partner crypto exchanges. It will quote both a ‘buy’ and a ‘sell’ price and make money on the bid-offer spread.