HOW AND WHY TO START YOUR
CRYPTO CURRENCY EXCHANGE
Bitcoin, the brainchild of Satoshi Nakamoto Debut in 2009 in the era of economic collapse, ushering a new phase of how money is dealt with and considered in the whole world. Bitcoin is not issued or regulated by any bank (central or world); instead, it is created through computer mining. Not trying to bore you with the technical details, it is a peer-to-peer payment system that offers a convenient, transparent, and fast way to conduct our transactions without any exchange rate fees.
Just as the author of the book "Digital Cash" and the Professor of Science and Technology at the University of California Davis, Finn Breton, says, "When you buy bitcoin, you're actually buying into a whole scene." Cryptocurrency is a lot more than bitcoin. Cryptocurrency is a lot more than just a transaction token like a dollar; it is a whole technology that achieves a lot more than what our traditional banking and the monetary system don't.
Given the rising tension between the superpowers, global market uncertainties, and dollar fluctuations, cryptocurrency is such an alternative source of diversification for our hard-earned money. And with countries, investment banks, hedge funds (JPMorgan with Zcash and Bank of America developing its cryptocurrency) adopting this virtual currency, its presence cannot be ignored.
When more people start adapting to this new currency, owning a sustainable cryptocurrency at the right price can make you an exceptional return. But what more can we do to maximize our return on investment? What we at BancorpTrust suggest is don’t just have some cryptocurrency when you can own a cryptocurrency exchange.
Although it seems like a far-fetched feat, it is a lot easier with the proper guidance than it sounds. Let's dive deep into the why, how, and benefits of owning a cryptocurrency exchange.
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BENEFITS TO START A
According to Forbes, in 2020, there were a record 11 billionaires from the cryptocurrency space. Wealthiest being the CEO of FTX, Sam Bankman, is worth more than $8.7 billion. Apart from the monetary benefits, a list of lucrative benefits are shared below:
1.) Unparalleled money benefits
Successful crypto exchanges are very profitable. Trading commissions per trade-main source of income for an exchange, and those rates are decided per the trade.
2.) Increasing demand for trading and investing
The volatility of cryptocurrencies has attracted a lot of traders and investors around the world, and the demands will only go northwards in the future.
3.) Growing Technology
Blockchain technology is constantly evolving, and its audience is growing exponentially. By owning an exchange, you'll have first-hand updates of this evolution and can even be a part of it.
4.) Entrepreneurial spirit
Building and running a crypto exchange is an online business, and its success matters on how well you run it.
5.) Ability to run a crypto exchange from anywhere in the world
Just like any other online business, a crypto exchange can be managed and operated from anywhere.
You might have been overwhelmed by just knowing the benefits of owning a crypto exchange. And if you have any doubts regarding the same or want to continue your pursuit of launching your crypto exchange; BancorpTrust is a licensed investment bank that can help set your dream exchange at a price that is not harsh on your wallet.
Contact us today to tap into our vast array of expertise!
HOW TO START A CRYPTO EXCHANGE?
The recent IPO of a popular crypto exchange, "Coinbase," has evidently laden cryptocurrency's significance, importance, and global demand. Its Initial Public Offering (IPO) valuation was $66 billion, and this valuation superseded those of one of the biggest banks in the world, JPMorgan.
1.) Choose the type of exchange and additional modules you want to launch.
Centralized exchange- Most trustworthy exchange system as there is a third party involved to handle the transactions. Exchange charges are charged to perform this duty. It is highly liquid.
Decentralized exchange- It lacks liquidity.
P2P exchange- It connects buyers and sellers with no third-party involvement.
Apart from the above 3, to attract more people, you can add the following modules:
a) Margin trading exchange- Traders are attracted to exchange which provide leverage. i.e., more significant earning opportunities for both traders and owners of the exchange.
b) Derivatives exchange
c) NFT exchange and Wallets
After identifying the type of exchange, you want to create and the additional modules you wish to offer, you need to decide to start from scratch or continue with white label crypto exchange software, which decreases time to market.
2.) Conduct a Market research
3.) Identify the launch location.
Preferably in like the USA, Japan, Switzerland, Singapore, Hong Kong, Malta, etc. You must check the regulatory and government policies of the countries where you plan to launch your exchange.
4.) Have an experienced advisor
Crypto-related laws and regulations change very frequently and vary across the various region, so having a professional by your side can help you adhere to those laws and regulations properly.
5.) Consult with technical experts
Apart from having an experienced advisor, you need to consult other subject matter experts who can help in your exchange's smooth development and running. Experts like:
a) Blockchain developers and designers,
b) Financial advisors,
c) Blockchain analysts, etc..
6.) Connect with other exchanges to add liquidity
The more extensive the network of exchanges higher will be the liquidity. And high liquidity attracts more traders and ensures proper order book management.
7.) Partner with a payment processor
Lower the transaction rate is directly proportional to a higher competitive advantage. No payment processor is equal, so you need to do your diligence in picking the right one for you. Apart from transaction rate, other things you need to look out for are: hidden fees some processors have, settlement time, and cyber security compliance.
8.) Deciding other features
More features you provide to the users higher are the chances for you to have a successful exchange. Other features like:
Instant KYC verification,
Secure wallet integration,
Market making, etc.
9.) Ensure multi-layer security and customer support
You need to provide top-notch security for every transaction and customer data as they are the building block that can make or break a crypto exchange. As a saying “crypto never sleeps” so does the exchanges and traders using those exchange, and apart from security, those users look out for 24/7 customer support.
10.) Work on Marketing and PR
Crypto or digital currencies have created a paradigm shift in how we look at money. Like any other new technology, it sure has its shortcomings, but we cannot ignore the upside and potential it carries in it. Acting fast to capitalize on this lucrative opportunity might be an intelligent choice for you and your money. Our management team has over 3 decades of successful track record, we specialize in establishing cryptocurrency exchanges, Investment banks, offshore banks, Licensed Investment funds, Digital Payment solutions, Capital trusts, etc., at a fraction of the cost of other similar service providers.
Contact us for a confidential consultation! Our experts will respond to you within 24 hours.