Opinion: MārtiņšBeņķītis, co-founder and CEO of Gravity Team
As a plateau for crypto adoption in several developed countries, emerging markets are leading adoption responsibility. Southeast Asia, Africa and Latin America have become rapid growth centers, with new activities being driven by limited banking options, instability in local currency and increased smartphone use. The need for alternative funding in these regions is serious. Blockchain technology can provide that, but it certainly isn't easy.
A key hurdle for the emerging crypto market is market production. There, traditional approaches struggle as a result of certain challenges, such as limited infrastructure and economic instability. Standard market production strategies often fail or fail to take into account these complexities. A new approach known as “boutique market making” unlocks growth and offers a customized liquidity solution that takes into account local factors such as regional regulations, cultural nuances and specific issues in each market.
This “boutique” approach brings great benefits to the average person in emerging markets, creating access to financial services for the first time, and controlling your economic outlook.
Providing liquidity in emerging markets is difficult
The growth potential of emerging crypto markets is clear, but it is not the case to exploit it. Paths have challenges that require a specialized and nuanced approach. Here, standard market production strategies have little effect.
Consider trying to navigate the regulatory maze of countries where rules continue to change and the economy is sensitive and unstable. That's the reality in Argentina. Tough capital controls require 24/7 surveillance and hyper-reactive strategies to create technical minefields for crypto trading and ensure compliance. Why do liquidity providers want to deal with such uncertainty?
Next is the technical problem. Many local exchanges are built on outdated infrastructure with high latency and slippery. It's far from running lightning bolts of seamless APIs and top platforms around the world. It discourages traders and liquidity providers from participating, leading to a vicious cycle of thin purchase orders, sustained drought, low liquidity and limited opportunity.
FX volatility makes the problem even worse. Some Fiat currencies experience wild fluctuations that pose immediate conversion risks. Many local banking systems aimed at protecting clients from this volatility have implemented blanket bans in crypto-related transactions, causing payment friction.
The cocktail in question has pushed people out of central banks and pushed them up into a weapon waiting for peer-to-peer transactions. There, direct trading further fragments of liquidity, making it difficult for localized cryptocurrency exchanges to gain traction. However, these technical hurdles can be overcome. They simply require a contextually rich approach to market production, which is acutely aware of all risks, problems, human needs and cultural factors.
Why Standardized Solutions Fail in Emerging Markets
Traditional market production companies are used for standardized protocols, making adaptation difficult and liquidity failures insufficient. This is especially true in regions such as Argentina and Türkiye. Despite Turkey's highest crypto adoption rate in the world at 27.1% and the highest crypto adoption rate of 23.5%, local conditions are demanding a bespoke solution. These are far above the global crypto ownership rate, estimated at 11.9%.
In Argentina, boutique companies can promote a steady flow of the US dollar and provide a critical lifeline for those who need a stable alternative to volatile pesos and capital management. Even considering this type of service, there is a need to deeper understanding of local regulations and proactive compliance approaches.
In Türkiye, price discrepancies between global and local platforms create significant inefficiency. The boutique market maker intervened to act as a bridge, smoothing out the inefficiencies and ensuring a more equitable price for local traders.
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Look at Bolivia. Cryptocurrency was legalized in June 2024, and local crypto exchanges were released soon, but are hunger for liquidity. Big companies didn't want to touch them. Suddenly, when boutique market makers stepped in, the slips reduced, prices stabilized, and trading was more viable for investors of all sizes. People won. The ability to build trust and lasting relationships with local communities and regulators is extremely important. You need to wave and hold the words.
Stable fluidity burns opportunity
Boutique market makers work hard to provide stable liquidity, unlocking countless opportunities for people within the emerging crypto market. By providing consistent buy and sell orders, they reduce slip and price volatility, creating a reliable environment for developers to build tools, platforms and distributed applications tailored to their local needs.
The stability offered by boutique market makers comes from a customized strategy that uses local knowledge, navigates regulatory mazes, and bridges fragmented markets. This differs from standardized approaches and often hinders outdated technology and compliance hurdles. For users, this means an accessible liquid market that supports the use of practical cryptos that drives real adoption, from remittances to daily transactions.
The boutique market that creates the future
The emerging crypto market is at a turning point. Their agility and local insights make boutique market makers the key to turning possibilities into actions and opportunities. It's time for stakeholders, exchanges, regulators and communities to properly assemble behind these professional players, and foster an ecosystem where innovation thrives and daily users will gain real access. The path forward is to build a foundation for a decentralized economy that is useful for everyone. Liquidity is essential to getting there.
Opinion: Mārtiņš Beņķītis, co-founder and CEO of Gravity Team.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph's views and opinions.
