Cryptocurrency Exchange Platform – How does it make money?

0
49
cryptocurrency exchange platform
cryptocurrency exchange platform

Crypto exchanges are emerging as the best online business that one can kickstart at any crisis. Even it is one of the shining businesses during the time of the pandemic. Also, this business is making millions of dollars in revenue and possibly even billions a year. Now, you might have a question in your mind: how to start a crypto exchange?

If you have enough funds and unique business requirements. Then by choosing the right crypto exchange development company, you can launch your crypto exchange. Thus, it is one of the best ways to get involved in the crypto market by owning an exchange. Also, by starting a crypto exchange, you can generate income in many possible ways. 

If you are owning an exchange or planning to start a crypto exchange and don’t know how to make money. Then this article is completely dedicated to you, my fellas!. So, how do these crypto exchanges make money? In this article, we discuss the major revenue streams for crypto exchanges that help you to generate money. So let us begin this article with…

Overview of Cryptocurrency Exchange Platform

A Crypto exchange platform is a trading platform where one can buy, sell, and trade a wide range of virtual digital currencies. Such as bitcoin, ethereum, litecoin, ripple, and much more. Here users can exchange cryptocurrencies using their fiat currencies. As of now, there are some popular crypto trading platforms in the blockchain marketplace. Such as Binance, remitano, paxful, coinbase, localbitcoins.com, and huobi. These exchanges have massive user traffic and generate a vast amount of revenue.

In the crypto trading platform, there are three major types of exchanges. Such as centralized crypto exchange, decentralized crypto exchange, and hybrid crypto exchange. Currently, the usage of cryptocurrencies is increasing daily. So there is a huge demand for crypto exchanges. Thus, many startups and entrepreneurs are emerging towards the best crypto exchange development.

The cryptocurrency exchange platform has the highest touchpoint to all new users and multiple streams of revenue. If you own a crypto exchange platform, then you will be able to make money daily from multiple sources. So now, let us look at…

Ideal Ways to Make Money by Starting a Cryptocurrency Exchange Platform

Here we list the excellent ways to generate money by starting a crypto exchange platform.

Trading Fees

The most well-known money-making method for crypto exchange platforms is to charge commissions on trades. It is a fee for the service of facilitating a secure and successful trade between the purchaser and seller. In today’s crypto exchange market, charging fees are below 0.01% and which have become commonplace. Such low charging fees crypto exchanges relatively have large trading volumes.

The top crypto exchanges in the industry like binance, Coinbase will boast daily trading volumes in the range of billions of US dollars. Also, they generate 8-figure commissions and more for successful trading. If a crypto exchange can attract billion-dollar volumes. Then it becomes clear how profitable this business can become. As the crypto market expands, we can expect large volumes and commission revenues from crypto exchanges. For example, Binance exchanges handle the largest crypto trading volume. Thus, the crypto trading volume will be more than $3 billion daily. 

Binance charges about 0.1% for trading fees from their users. Likewise, OKEx charges 0.15% of trading fees. Other crypto exchanges like huobi, bitfinex will charge around 0.2% from their users. Thus, depending on the trading volume on your exchange, you can set your trading fee structure. So, this is one of the finest ways to earn more money.

Listing Fees

It is one of the smart ways to make money by starting a crypto exchange using cryptocurrency exchange software. Cryptocurrency exchanges will face some struggles with minimal volume during the initial stages. A crypto exchange can introduce a token and cryptocurrency listing service to reap more profits. But the listing fee will vary based on the size, popularity, and trading volume of the exchange. These listing fees are mostly payable in cryptocurrency or the project’s native tokens. The listing prices will be in the range of 1 to 10 BTC.

There are many crypto exchanges with low trading volumes. Even though those exchanges collected billions of dollars in the form of listing fees. You must note that competition for cryptocurrency and the crypto-token listing has become ferocious. Some experts in the blockchain space say that small-sized crypto exchange platforms charge in the range of 1 to 5BTC as a listing fee. On the other hand, medium-sized crypto exchange platforms charge about 10 to 50BTC as a listing fee. Thus, start your exchange using crypto exchange software and gain a vast amount of users. So you can also charge listing fees like other exchanges and you can make more profits.

Margin Trading

Margin Trading is the essential feature enabled in the cryptocurrency exchange platform. Here a third-party will be involved in providing funds to the users to perform trading. It involves a greater capital, to get a huge profit. This Margin trading feature has a great set of perks in the crypto exchange platform. Such as 

  • Enhanced Returns
  • Trading Flexibility
  • Increased Cash Dividends
  • Tax deductibility
  • Competitive Interest Rates

To get started with Margin Trading, users need to pay a certain percentage of the total order. The first investment is known as the margin. This is far similar to the concept of leverage. This feature can be used for both short and long positions. Margin trading offers an enormous amount of profits due to the high relative value of the trading position. Nowadays, many crypto exchanges implement margin trading on their platforms. Some prominent cryptocurrency exchanges offer the margin trading feature. Such as

  • Binance
  • Bitmex
  • Kraken
  • Poloniex
  • Bitfinex

Thus, you can incorporate margin trading in the cryptocurrency exchange platform. So that you can make lucrative money by charging interest to your users.

Initial Exchange Offering

At this time, most of the startups and entrepreneurs used IEO launchpad to raise their funds. But before using IEO, most people preferred ICO websites for raising the funds. But most of the ICO are said to be scams. So to overcome this drawback, the blockchain community invented the IEO module. 

IEO is a kind of profitable and essential feature that must be enabled in the crypto trading platforms. In general words, the IEO is the utility token sale platform where all the newly released crypto-tokens will be sold without any hassle. Here, you can charge a certain amount of fees from the token issuer. Thus, both the crypto exchange owner and the issuer will be benefited by using this IEO module. 

If you already own crypto exchange, you can enable the IEO module. Else you can start a unique cryptocurrency exchange by using premium cryptocurrency exchange software with the IEO module to make extra income.

Withdrawal  Fees

In recent years, only some of the crypto exchange platforms charge withdrawal fees. But most of the prominent exchanges don’t charge any fees for withdrawal. Even though crypto trading platforms like binance and coinbase are not charging fees for withdrawal. But trading platforms like Kucoin charges 0.0004 BTC when a user withdraws bitcoin from the wallet. Likewise, you can also collect fees from the users when they withdraw cryptocurrencies. Thus, it boosts your income and helps to make more money.

Advertisement

If you have a crypto exchange and it is becoming more popular in the industry. Then definitely the user base will increase automatically. For example, Binance was first launched in 2017 and within a few months, it became the largest crypto trading platform based on trading volume. Also, they have massive user traffic in their exchange because of low trading fees. Thus, they can permit third parties to post ads, and also they can charge fees for posting ads. Thus, you can also allow third parties to post advertisements. So that you can charge fees for posting their advertisements.

Stake

Basically, the stake is used to hold the digital assets. The crypto exchange stake is a feature that holds all the major cryptos that are present in the marketplace. Here, when a user is holding a particular cryptocurrency for a long-term. Then the exchange provides some rewards for the users. If you are a crypto exchange owner, then you can make additional profits by the stacking process. For instance, top crypto exchange platforms like binance and kucoin have stake features.

Get started with the Cryptocurrency Exchange Platform Now!

In this present era, starting a crypto exchange business will be more preferable to make more profits. As of now, the cryptocurrency is growing fast and it is a perfect time to start your cryptocurrency exchange platform. Thus, you can expand your business and earn more profits. So, the above-discussed ways are some of the ideal ways in which the cryptocurrency exchange platforms will help you to earn money. If you have any queries on – how to start a crypto exchange?. Then contact the top-notch cryptocurrency exchange development company in the industry. They will help you to develop a feature-rich crypto exchange platform right from scratch to deployment at a reasonable price.

LEAVE A REPLY

Please enter your comment!
Please enter your name here