Since the beginning, cryptocurrencies have become a very lucrative business for many people. However, this doesn’t mean a crisis cannot be felt in the crypto-world. Exactly such a situation happened with mining, which lately does not bring the same profit as before.
However, the business with crypto exchange platforms flourished. If you’ve been thinking about creating a cryptocurrency exchange platform yourself, here’s how you can make it happen.
What Are Crypto Exchanges, And Why Are They Expanding So Much Now?
A crypto exchange is an online platform where users can trade their digital assets and cryptocurrencies. As cryptocurrency mining has recently become less profitable – many have realized that brokering their trade is a much more lucrative business.
So it’s no surprise that many companies have realized that the best way to make a profit is to create their platforms – so many have ventured into launching their crypto exchanges. This is both a creative and profitable business that is also well accepted by users.
It is because the commissions of crypto exchanges are far more acceptable compared to traditional ones such as certain banks, Western Union, and the like.
Can Crypto Exchanges Make Good Money?
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Let’s include a little logic and a calculator in this whole story. Would this become a business where companies are so competitive that it is not profitable? So, of course, this business is very profitable! If you consider the value of the exchange of crypto-assets which is measured in the tens of billions of dollars, you can only imagine how profitable it can be. If we turn on the calculator and calculate the average commission of 0.2 percent – we come up with a figure that can make our heads spin.
Above all, you should also add fees such as those for deposits or commissions for conversion or withdrawing money. Overall, these are amounts that will make you feel dizzy – so it is not surprising that many companies are entering the development of crypto exchange platforms.
What Crypto Platform To Create: Differences Between Crypto Exchanges
People who are already familiar with crypto matters know that we have two types of crypto exchanges – centralized and decentralized. Of course, there are differences between them. Centralized exchanges hold all users’ funds on their servers, offering users easy trading and many other options.
However, due to their nature, centralized exchange platforms have certain limitations – which sometimes, depending on the user, can be a positive thing. On the other hand, decentralized exchange platforms work on the same principle as cryptocurrencies. Such a system is called a distributed ledger and implies that users, themselves, are responsible for their funds.
On decentralized exchange platforms, users can remain anonymous – while on centralized that is not possible. Given that the centralized exchange controls the funds of all users, it can, at any time, take away the funds from the user – or deny him access. Because of that fact, movements have emerged that advocate exclusively for decentralized exchange offices – which are at the same time far more popular among users.
How to Create Your Own Exchange Platform?
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Having an exchange platform is not a small business – and requires a big investment. Still, just think about how such an investment can pay off. You can take a look at this website and see how many crypto exchanges made a good business, and yet, they were all once in the same situation as you are now.
Everything takes time and some skill. However, to create your exchange platform, you need to pay attention to several other things.
Build a strong team
The first thing you should do when launching an exchange platform is to create a business plan that includes a description of operations and management, marketing and sales strategies, financial structure, etc. A good business plan will make it easier for you to gather a team of collaborators – who have the same business vision as you. A good plan will also enable you to reach interested investors.
Of course, it is necessary to build a strong team of people who will work with you. Your team should include the CEO, developers, product managers, marketing experts, customer support, accountants – and most importantly, experienced cryptocurrency traders.
Follow the legal regulations in your country
Source: australianfintech.com.au
Regulation of the crypto market has been a hot topic for some time. The biggest fear is that cryptocurrencies could be used for money laundering, political manipulation, and other illegal activities.
To prevent this, governments and regulators are starting to take a tougher stance on the crypto market. Although the market in some countries is still unregulated, each exchange is recommended to harmonize its operations according to the applicable standards.
Liquidity and integrations with other crypto exchanges
Liquidity is another important aspect of crypto exchanges. Liquidity is the volume of transactions on the exchange – meaning the more people trade, the greater the number of transactions. Each exchange starts with zero users, which means that there is no liquidity at the start.
You can overcome that by integrating with other liquid exchange offices, from which you would initially take liquidity and execute all trades with them. Every exchange office will charge you a commission on these transactions, so due to the competition in the market, it is up to you to fight for the most favorable conditions for yourself and your users.
The research you need to conduct before launching the platform
When starting your exchange platform, you have to start from scratch – so it is suggested to research your target group of users and the specifics of the market in which you operate. If you have another crypto exchange as a strategic partner, try to conduct specific research together – as well as a thorough check-up of the competition.
All this should be done before you put your exchange platform into operation.
The Bottom Line
It is clear that when it snows heavily, shovel sellers have the most work. In the same way, you can look at the current situation in which starting your crypto exchange platform can be very profitable.
However, when starting such a business, think carefully about all its aspects and your determination to truly make a profit. Success does not come overnight. So, arm yourself with patience and we wish you the best of luck.
