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// Cryptocurrency

Tips on How to Start a Crypto Exchange Business

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Yuri Musienko
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If you have a desire to start a new business and launch your own crypto exchange platform, then you definitely have to now not just about the development methods of bitcoin exchange script but you need to know the features of this type of project.

First of all, this article is suitable not only for the start of the bitcoin business but also for Ethereum, Ripple and almost any other crypto-currency. The main features in most of them are the same and are suitable for entrepreneurs and businessmen.

As a rule, people who want to launch a crypto exchange platform understand very well how similar projects work. Moreover, we can say with certainty that you have been a trader before. This once again says that you understand how this type of business is arranged.

Indeed, crypto-exchange platforms are gaining immense popularity. For example, binance.com has more than 65 million users per month. At the same time, the peak attendance was 191 million users.

As you can see these guys are doing very well. Receiving a commission for transactions, they provide revenue of ten millions dollars each month. But it is worth noting that the development and support of crypto exchange business requires a lot of money and resources. And that everything great starts small.

Where to begin

First of all, you need to determine which platform you want to develop. All projects can be divided into three types:
1. Cryptocurrency exchange;
2. Cryptocurrency trading;
3. Cryptocurrency marginal trading with leverage.

Despite the fact that, in essence, they work with the blockchain and crypto-currencies, they still have radical differences. In the features of the functional, development time and deployment, and of course in the cost of implementation. The downside is the types and opportunities for earning on each individual platform.

Cryptocurrency exchange

This, probably, is the first type of platform faced by novice traders with crypto-currency. Its main feature is the simplicity of the interface. Despite the fact that the blockchain is a complex technology, exchangers could spread it around the world. As they are still called, these are exchanges between the user and the administrator for buying and selling.


Platforms of this type have their own internal reserve of money in several directions such as bitcoin, dollars, Ethereum and so on. Payments and operations are conducted on behalf of administrators to users.

As well as the offline exchangers that are usual for us, these platforms earn on the exchange rate or crypto-currencies. As a rule, the cost of buying bitcoin in exchangers is higher than on the exchange, and sales are lower than in the market. Why is that? The answer is simple, like all ingenious in this world. Administrators and owners earn money on the difference in the exchange rate, due to this, the crypto exchange functions and operate.

Monetization for input, output and other gray schemes have not taken root well and they are practically not used.

The difference in rates can be from 1.5% to 8%. It will depend on direction and currency. With the proper volumes, these are simply colossal figures.

Cryptocurrency Trading

Unlike the previous type, the trading can be considered as the next evolutionary step. Just like it used to be with online stores, which later turned into marketplaces like Amazon.

The crypto-currency trading is not only a crypto exchange business. It is the market on which operations are conducted. It is not necessary to have own reserves for operating activities, because all financial transactions are from user to user.

By the way, on such platforms there are no buyers and sellers, they are usually called taker and maker. The one who gives liquidity, and the one who takes it.

As already mentioned, the platform is a market for the provision of services and just charges a commission for successfully executed transactions. Interestingly, the commission is paid by both sides and this is one of the tricks of exchange business. As a rule, this is the main source of income.

However, some cunning people decided to use additional ones. As an extra charge for the withdrawal of funds, and intrasystem calculations are not in Fiat currency, but in its own crypto-currency ERC20. As a consequence, they increase the capitalization of their own coins. But this is a spin-off strategy for bitcoin business.

These traders are born on the tradings and then go to margin trading. By the way, there are three following subspecies. Centralized, decentralized and hybrid systems. Their development differs radically, as a 180-degree turn, as well as a functional.

Virtually no system offers a demo account, and are not a futures trading.

Cryptocurrency trading platform

Exchanges, investors, and traders do not stand still. And the fact that in the forex industry everyone has long been known and driven out here is acquiring new colors. Margin trading with a shoulder is perhaps the apex of the cryptocurrency trade and crypto exchange business. As a rule, it is used either by professional traders or by those who possess insider information. What is characteristic, it can be super - profitable.

So what is it? The core of the platform is our usual applications, but they are transformed into positions. Moreover, the platform (Bitmex) and its users are investors (Poloniex) for providing loans-microcredits to traders. Thanks to which the shoulder-multiplier also works. If you use a 10x shoulder and the rate on your pair has changed only by 2.3%, your earnings will be + 23%. Incredible, is not it?

A good example of a platform with margin trading is bitmex.com. This is a large platform with many functions. It enables users to make claims with Leverage (shoulder), install Stops and work with 14 crypto-currencies. To the extent of the complexity of working on such platforms, there is a separate version with a demo account. Where users are given the opportunity to make bids and get involved in the bidding process.

What is a notable exchange business with margin trading? First of all, this is a highly profitable business for the owner and provides huge opportunities for traders. It's just how to understand and create a similar cryptocurrency trading platform.

Business Registration

The crypto-currency environment is considered grey for some countries, but it is only a matter of time when they legalize it. For example, registration and obtaining a license in India is somewhat more complicated than in Singapore. By the way, Singapore, Hong Kong and Estonia are among the topmost loyal countries in the world. Get a license and work in this industry the easiest.

Nevertheless, first of all, you should focus on the target countries in which you plan to conduct business activities. Based on this and choose a jurisdiction. Although, as experience and practice with Binance shows, Malta is also an excellent choice.

Operating activities

Probably one of the most cherished questions for completing a crypto exchange business plan. How many personnel are needed to successfully operate, start and operate a business for the exchange of bitcoins or other crypto-currencies? More than 50% of exchanges have less than 10 people in their staff, not including technical personnel: several people to communicate with users and investors, C-level staff, managing directors, accountant and marketers.

From this follows a simple conclusion, starting an exchange in your markets can be much easier than you think. If you have any questions, feel free to ask them to our managers, and our team will provide you with everything you need to start a business of exchanging bitcoins.

Currency pairs

And so, after you have decided what type of platform is right for you, the next important question is the choice of currency pairs and currencies and crypto-currency. Support for fiat currencies is an important point for many residents.

In addition, it is worth mentioning that in some states there is a huge need. But this is a double-edged sword, on the opposite side is the accounting of all activities and financial reporting. Know your client or KYC and AML are strictly regulated by each state.

For example, the following documents are basic for most countries: bank statement, utility bill, passport scan or driver's license. In Australia, you may require an extract of the mobile operator for KYC. And the AML policy restricts users. In same Australia, it is AUD 10,000.

The next pitfall is a regional limitation. And it is unlikely that you will find the huge popularity of the exchange business with the Cambodian Rheol (KHR) on the Swedish or European market. You are facing a choice of horizontal or vertical expansion.

Trade between cryptocurrencies.

Against the background of previous negative points, this decision is very attractive. Obviously, it is not necessary for the company to provide KYC and AML. There can be practically no daily limits.

But, probably, the only significant drawback is the low need in comparison with the fiat trade and high competition. To survive in this market, you will need either a unique product offer, or bolshie opportunities of the system, or a smart marketing campaign.

Which of these two options you choose, it's yours. But you can also combine both options, and even give up trading fiat for fiat - part of forex. But do not forget - you also should know how to create a crypto-currency trading bot. It will help you!

Recently, fiat integration has become much easier. Many providers offer fast and legal deposit options via Visa/MasterCard. One of the most popular solutions: Circle. They have great liquidity and allow you to convert the dollar to USDC. The collapse of SVB banks in 2023 did not particularly affect the activities of this company where more than 3.3 billion dollars were stored.

Merehead does professional development of Cryptocurrency exchange platform. If you have questions, contact us for a free consultation.

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