Two of the year’s most chaotic token blowups — Movement Labs’ MOVE scandal and the collapse of Mantra’s OM — are sending shockwaves through crypto’s market-making businesses.

In both cases, rapid price crashes revealed hidden actors, questionable token unlocks, and alleged side agreements that blinded market participants, with OM falling more than 90% within hours late April on no apparent catalyst.

Unlike traditional finance, where market makers provide orderly bid-ask spreads on regulated venues, crypto market makers often operate more like high-stakes trading desks.

They’re not just quoting prices; they’re negotiating pre-launch token allocations, accepting lockups, structuring liquidity for centralized exchanges, and sometimes taking equity or advisory stakes.

The result is a murky space where liquidity provision is entangled with private deals, tokenomics, and often, insider politics.

A CoinDesk exposé in late April showed how some Movement Labs executives colluded with their own market maker to dump $38 million worth of MOVE in the open market.

Now, some firms are questioning whether they’ve been too casual in trusting counterparties. How do you hedge a position when token unlock schedules are opaque? What happens when handshake deals quietly override DAO proposals?

“Our approach now includes more extensive preliminary discussions and educational sessions with project teams to ensure they thoroughly understand market-making mechanics,” Hong Kong-based Metalpha’s market-making division told CoinDesk in an interview.

“Our deal structures have evolved to emphasize long-term strategic alignment over short-term performance metrics, incorporating specific safeguards against unethical behavior such as excessive token dumping and artificial trading volume,» it said.

Behind the scenes, conversations are intensifying. Deal terms are being scrutinized more carefully. Some liquidity desks are reevaluating how they underwrite token risk.

Others are demanding stricter transparency — or walking away from murky projects altogether.

“Projects no longer accept prestigious reputations at face value, having witnessed how even established players can exploit shadow allocations or engage in detrimental token selling practices,” Metalpha’s head of Web3 ecosystem Max Sun noted. “The era of presumptive trust has concluded,” he claimed.

Beneath the polished surface of token launch announcements and market-making agreements lies another layer of crypto finance — the secondary OTC market, where locked tokens quietly change hands well before vesting cliffs hit the public eye.

These under-the-table deals, often struck between early backers, funds, and syndicates, are now distorting supply dynamics and skewing price discovery, some traders say. And for market makers tasked with providing orderly liquidity, they’re becoming an increasingly opaque and dangerous variable.

“The secondary OTC market has changed the dynamics of the industry,” said Min Jung, analyst at Presto Research, which runs a market-making unit. “If you look at tokens with suspicious price action — like $LAYER, $OM, $MOVE, and others — they’re often the ones most actively traded on the secondary OTC market.”

“The entire supply and vesting schedule has become distorted because of these off-market deals, and for liquid funds, the real challenge is figuring out when supply is actually unlocking,” Jung added.

In a market where price is fiction and supply is negotiated in back rooms, the real risk isn’t volatility for traders — it is believing the float is what the whitepaper and founders say it is.

Read more: Movement Labs Secretly Promised Advisers Millions in Tokens, Leaked Documents Show

Major tokens slumped Saturday as investors digested the implications of Moody’s Ratings downgrading the U.S. credit score, with ether (ETH), XRP, and dogecoin (DOGE) dropping roughly 3%.

The broader crypto market held at $3.3 trillion, paring earlier gains after briefly touching the week’s high.

The move came after rating giant Moody’s cut the U.S. sovereign credit rating to Aa1 from Aaa, citing the country’s swelling deficits, rising interest expenses, and a lack of political will to rein in spending.

The firm now joins Fitch and S&P in assigning a rating below the once-unblemished triple-A status long held by the world’s largest economy.

As such, the White House was quick to respond, with spokespersons for President Donald Trump criticizing the decision as politically motivated.

The downgrade had an immediate effect on traditional markets: U.S. Treasury yields jumped, with the 10-year note rising to 4.49%, while S&P 500 futures dipped 0.6% in after-hours trading.

Historically, concerns about U.S. debt sustainability and dollar debasement have served as tailwinds for bitcoin and other decentralized assets. However, credit downgrades can also trigger short-term risk-off behavior, particularly if macro uncertainty leads institutional traders to reduce exposure.

Meanwhile, some traders warned of a deeper sell-off in the near term on general profit-taking before the next rally.
“Bitcoin is holding the $104,000 mark as a key level and the positive factor is that sellers have not yet managed to seize control of the market,” Alex Kuptsikevich, the FxPro chief market analyst, told CoinDesk in an email. “However, resilience at high levels may be temporary before the next bounce, and there is considerable pressure near the upper boundary of the current range.”
“In other words, the short-term outlook suggests a decline from current levels,” Kuptsikevich opined.

ETH has quietly slipped into historically rare territory as one market signal shows its deeply undervalued compared to bitcoin (BTC), at a ratio not seen since 2019, a new CryptoQuant report says.

The signal comes from Ethereum’s ETH/BTC Market Value to Realized Value (MVRV) metric, a gauge of relative valuation that measures market sentiment and historical trading patterns.

Historically, whenever this indicator has reached similarly low levels, ETH has subsequently delivered significant gains and substantially outperformed BTC.

Investors appear to be taking notice. Demand for the ETH ETF has sharply picked up, with the ETH/BTC ETF holdings ratio rising steeply since late April, according to data from CryptoQuant.

This shift in allocation suggests institutional investors anticipate ETH will outperform BTC, potentially fueled by the recent Pectra upgrade or a more favorable macroeconomic environment.

Already, the ETH/BTC price ratio has rebounded 38% from its weakest level since January 2020, suggesting investors and traders are betting the bottom is in and an «alt season» could soon follow.

This echoes what some market participants have been telling CoinDesk.

March Zheng, General Partner of Bizantine Capital, said in a recent message that traders should remember that ETH has typically been the main on-chain altcoin indicator for risk-on, and its sizable upticks generally lead to broader altcoin rallies.

On-chain data further supports this optimism. ETH spot trading volume relative to BTC surged to 0.89 last week, its highest since August 2024, signaling renewed appetite from investors. A similar trend occurred between 2019 and 2021, when ETH went on to outperform BTC by fourfold.

CryptoQuant also notes that ETH exchange deposits, often an indicator of selling pressure, have dropped to their lowest relative level since 2020, implying investors anticipate higher prices ahead.

For now, confirmation hinges on ETH decisively breaking above its key 365-day moving average against BTC.

Still, with compelling undervaluation, rising institutional interest, and diminishing selling pressure, ETH appears positioned for significant upside in the coming months.

But one thing ETH is still lagging on is network activity, as CryptoQuant flagged in a prior report. Without more people using Ethereum, it will be tough for the token’s price to lift off and head to the moon.