Cryptocurrency & Bitcoin Exchange Startup Business Plan
Modern times require modern approaches to the business and money making. Starting up a business is hard, but who doesn’t take the risk, he doesn’t win. But, what is the most important is there are ways to develop a really successful business plan. You should follow the rules and the procedures and the results won’t trail.
Bitcoin business is a modern gold mine, you only have to dig as deep as possible. What is more, Bitcoin exchange platforms became really popular in the last period. What we suggest is exactly that. Try building your Bitcoin exchange business. In this article, you will find useful information and advice on how to do this startup.
Even if it existed from 2009, Bitcoin hit a serious price of 333$ in 2015, and that is when the mania started. As you probably already know, Bitcoin is held only electronically. Bitcoin exchange is a field of buying or selling Bitcoins using different currencies. You can change Bitcoins to dollars, Euros (fiat currencies) and altcoins.
Here are some of the new forms of Bitcoin businesses. This will only continue to grow in the next period.
Wallet services – Wallets purpose is to store Bitcoins in one place. But, the plain wallet services already exist. Companies are now developing it into a technology perfections( there is a cold and hot kind of wallets ). The service is improved by the functions such as HD security, BIPs32, and optimization to use it in the large organizations. In some time, this type of service will only get better. They will allow the users to relax a little bit, as everything would be automatized.
Mining – This is an extremely popular activity when we talk about Bitcoins. Biggest exchange companies are opening mining pools and work on the advanced solutions.
Smart contracts – This innovative idea is based on the excluding the third parties when it comes to agreements and contracts. Old-fashioned ways of signing a contract on the paper are about to get replaced by this technology.
Working with Bitcoins takes time and a lot of patience. Earned money has to be generated in one places and after some time, and that is the main thing. On the other side, the Bitcoin exchange platform works differently. It can give you a daily basis income, depending on the traffic on your site. When we say traffic, it means transactions done by the visitors. Bitcoin exchange sites have a purpose of connecting the sellers and the buyers.
When you are starting up a business, you must take into considerations its reproducibility. You need to make sure that the plan has something in it that will spark the interest within the traders. Sometimes it is good to check what the concurrency is doing. By learning about the others’ mistakes, you can avoid making it yourself. And the good sides can be applied partially to your site also. Let them give you some inspiration.
Those concurrency sites already have many clients/traders and do business really well. Don’t let this disappoint or discourages you. They operate a lot longer than you, and it is somehow logical. Make baby steps, but move in the direction of success. Build that exchange business on stable foundations.
Here you can find a list of the best Bitcoin exchange sites or create your own Bitcoin/Cryptocurrency trading exchange platform. This can be very useful as an example of what does your site need to become.
When launching an exchange business plan here are some crucial things to know.
1. Security – Sites made for these purposes and based on Bitcoin are very often a target of the hackers or bans. The system should be very strong and resistant, so you would keep the Bitcoins and money on it. If you skip the step about the cryptocurrency security, your startup can be driven into a really endangered zone. This is something you want to escape.
2. Adaptability – This is an important feature of the Bitcoin business functioning. As we said earlier, it varies quickly. So the thing is, you have to put an accent on versatility. Everyday fluctuations require the fast changes. Traders will appreciate it.
3. Software – Having the good exchange software is also on the list of priorities.
4. Anonymity – The traders appreciate the anonymity, or in other words privacy, so be sure to ensure it for them. Also, provide a customer support option. There will always be some questions, about the exchange, withdrawal and similar topics.
Before even starting with the business, you have to check all the regulations and law and government requirements. Regulations in this area exist but are different in different countries. For example, in the USA there is a whole package of regulations that are written for a Bitcoin startup business. For example, Bitcoins and cryptocurrencies are a highly discouraged type of business in Jordan. Bitcoin is considered as an illegal activity, but still, some of the small companies work with it.
After making the exchange business plan you will focus on turning it into reality. Now you probably ask yourself how much time does it take to start Bitcoin exchange business. Believe it or now, it will take an average of about 45 days. Sometimes this will look like a nightmare to you, sometimes you will eagerly start the day with new ideas. However, Merehead exchange ready to be deployed in almost 15 days.
What else do you need? You just can’t start the business illegally. The whole process is a lot more complex. It is not only about the idea and the plan. You need many certifications and licenses before even getting started. The state you are living in will investigate every detail of your business in order to stop any criminal activity.
For example, the US government promulgated an official page about the Bitcoin.
And even more, this falls under the regulation of cyberspace. There are, of course, bodies that influence worldwide activities in Bitcoin exchange business. They are literally all over the globe and many things depend on their judgment. But if you follow the rules and procedures, there won’t be any problem.
For the Bitcoin exchange business, you ought to have the exchange software. Here you can have two options. First one is to gather a team of developers and programmers who will make you a software. It is important to know all the components should be harmonized with the payment and safety processes. The software has to be maintained and up-graded pretty often. Costs of the maintenance can go up to 462,000$, which is, you must admit, a lot. But, on the other side, earnings made with the Bitcoin exchange system can reach much more.
White label software is highly recommended. This one is tested and trustful. When we say tested, it means that this software has UI, admin panel, wallet service already built in. These are the required components of the software. What is left, is to adapt the rest to the need of your site. Besides, picking White label software is way less expensive than making your own software. The price is starting at 12,000$.
As in every other business, you can’t do all of this on your own. You will need some help, and you will get it from your management team. Almost 90% of all exchanges work with less than 10 people. Binance even has about 40 core persons, and the rest stuff is only support managers who can easily be outsourced. Below the most common management team required.
Quantitative Strategist – works on derivative pricing, tests the quantitative strategies and analyses the market structure.
Regulatory Compliance Officer – As mentioned above, all the activity has to be harmonized with the country’s regulation. This person is in charge of the research of the laws and regulations in the area, communication with the banks, tracking the concurrency solutions. The officer is a part of the Legal counsel. You can hire it remotely.
Operations Manager – coordinates the activities of the HR, IT etc, ensures the expansion of the business, supervises the execution of the projects, communicates with potential partners.
PR & Marketing Manager – is responsible for writing and sharing posts, press releases, brochures and many more materials.
From the very beginning, you can start only with PR and Operation managers, and of course with owner.
This is a pretty common concern. After the initial excitement about this kind of job, you will eventually realize that you lack some funds for the business. As you saw above, exchange software is a requirement for starting up an exchange business. Whatever option you choose, you have to pay for it. The only difference would be the amount. And there comes the fund problem, as you maybe don’t have enough money.
Luckily, in this business, unlike with the others, there are many charity companies/sites. They can help you a little bit, by donating some Bitcoins to you. Don’t think of this as a desperate move, many people out there are in the same position as you. But, what we advise, is to have at least some decent fund for starting up business. Otherwise, you can launch ICO as a fundraising campaign and received money spend on future developments and marketing.
There are companies like DropDeck that focus on funding the business over the world. They use tokens. The operations of companies like this are completely transparent, so your progress will also be under the eye. What we recommend is to always be careful when it comes to charities like this and make sure everything is legal.
And probably the main question would be: How much can you earn?
Month earnings in this business can vary. The value of 1000 Bitcoins in 2009 was around 1$. Then in 2010, 10000 Bitcoins were worth 30$. Then in 2015, it became to rise, and in 2017 worth of one Bitcoin was around 6000$. Of course that the value can vary on a daily basis, but there is almost no possibility that something drastic would happen.
When we talk about the investments in the business, we already mentioned that you would need the software. The cost of it would be from 9000 to 460,000$, depending on what you want. And if you choose the second option, it is harder to return the investment. Top exchange business sites earn around 3 million per day. You can’t count on this when you are in the process of developing a business.
If you run the exchange business, each transaction can bring you profit. When you get into the business, the money will easily come. The main thing is to start and to gain trust from the traders. Once your site gets permanent traders, the profit will only get bigger. What is important is that the purchases and sales are low-cost ones and that will attract new visitors and clients.
Exchange sites have a withdrawal option. Each transaction wears some additional costs for the user. These transaction costs will bring you profit also. Each one takes around 0.2-1% of the withdrawal. These costs are in other words said, fees.
So, as you can see, there are many ways to earn by having an exchange site. The only thing is, no one can guarantee you the monthly or yearly profit. It depends on many factors. But, what we can say is that it can go to a serious number. The wallet and storage services, deposits, the transactions, and withdrawals, you can benefit from it all. If you have a decent number of traders, even small fees gathered in one place will make a nice sum.
It is clear that the startup of a Bitcoin exchange business would be a tough mission. On the other side, these 45 days of hard work will pay off if you play the cards right. The right software and following the regulations are at the top of the list. If you ensure these two matters, you did the half of the job. Next thing is to attract the traders.
Quality will always find a way for the customers. Make sure you have good connections with people from the same branch and with serious sites. Some of them can eventually help you with the ads for your site. Marketing has always been an important business factor.
Don’t expect an overnight success, but expect it for sure. However it looks right now, Bitcoins will only continue to grow and their value will be even higher in the future. And if so, the owners will always want to trade a Bitcoins for money or trade it between themselves, and that is the exact reason of the exchange platforms.
And a small advice… Even if you know that this type of startup can be profitable, don’t let it be your only goal. For instance, ignore this completely. It will only distract you from your main goal, and that is building a trustworthy Bitcoin exchange site.