A cryptocurrency exchange is an electronic intermediary platform between seller and buyer for transactions with cryptocurrencies (purchase and sale, exchange for fiat money, etc.).
The first online marketplace for cryptocurrency transactions was opened in 2010 by Jed McCaleb and was called MtGox.com. In 2011, the number of online trading platforms increased significantly: cryptocurrency exchanges grew like mushrooms after the rain around the world. The popularity of the service is due to the growing interest in cryptocurrencies, the increase in the number of market participants, and users’ desire to turn “electronic coins” into real money.
The main difference between a cryptocurrency exchange and any other is the high volatility. The rate of the most popular cryptocurrency, bitcoin, increased by 5000% in 2013 alone. High volatility allows you to make a fortune or lose everything quickly. Users use fundamental analysis, news, and special tools for successful trading.
The success of any electronic exchange lies in the activity of its users. For the exchange to work and bring income to the owner, it is first necessary to attract a sufficient number of active participants ready to invest money and conduct operations. Each trader pays a commission on transactions in favor of the exchange owner, which is the main income of the intermediary.
What are the benefits of opening your exchange?
Owning your cryptocurrency exchange can bring the owner a decent passive income. A popular electronic platform for operations with cryptocurrencies can get its owner thousands of dollars daily. Importantly, this income does not involve high risks and is now completely legal.
Monetization of a cryptocurrency exchange is not only about commissions. It is possible to charge users money for including traders in the general listing and for subscribing to training materials. A well-publicized cryptocurrency exchange, like any other electronic resource, can attract sponsors who are ready to invest real money in exchange development, as well as advertisers.
What you need to open
To become the owner of a cryptocurrency exchange, it is necessary to fulfill many special conditions:
- Acquire software, which can be bought off-the-shelf or created from scratch (there is a white label exchange software option);
- Determine the scale and geographical boundaries of trading (within one state, region, or the world);
- To meet the requirements of the KYC program (Know Your Client);
- Contract with an accredited bank that has an online platform at its disposal – this will allow you to withdraw funds in the form of fiat money;
- Make a plan or strategy to increase the liquidity of the exchange by attracting traders and creating high trading activity;
- Ensuring IT security at all levels;
- A trained customer support service (can be obtained as part of the b2b cryptocurrency offer).
Just about anyone can create their cryptocurrency exchange today. And although the future of cryptocurrencies is still hard to predict, investments in trading platforms for bitcoin transactions regularly bring profit to their owners. It’s up to you to use a turnkey solution or create an exchange from scratch.