The cryptocurrency market is still in its infancy stage, with new guidelines showing up much of the time. While it offers a ton of chances, there is likewise the potential for individuals to exploit for their very own gain. However, this isn’t all bad news. While wash trading is bad no matter how it is approached, there is a legitimate need for market making services within the cryptocurrency market.
Market making is an activity that reduces liquidity risk, facilitating users that sell and buy in the market. It also plays an important role in increasing the liquidity within the market and between specific trading pairs while Wash trading refers to the process where a trader generates misleading and artificial activity by buying and selling a cryptocurrency to themselves. This, in turn, creates fake trading volume and greatly inflates the appearance of demand. It is a form of market manipulation and aims to mislead traders. Wash trading has also been found to play a role in trading at cryptocurrency exchanges.
Know more about it here:
https://blog.kucoin.com/the-differences-between-market-making-and-wash-trading-sk-bt
