Crypto is trending right now. Some would call it the gold rush of our age. One of the best ways to mine profit from crypto is by starting your own crypto exchange business. If you are interested in it but are not sure where to start, in this article we will explain to you the crucial steps to start.
- Licensing requirements
- Software solution provider for cryptocurrency exchanges
- Beta testing
- Customer support
- Legal team
How to Start
One important step that is looked over is naming your business, if you have trouble coming up with names use a crypto business name generator that will give you unique name ideas. Now that we have gone over the key points in vague, let us take a closer look at each and what it means.
1. Licencing Requirements
Before you start any business, understanding the rules and regulations is key, you should seek legal counsel and require proper permits and licenses. While crypto does not have a governing body in some places like the US, Bitcoin operators are required to be licensed Money Transmitters and follow SEC and CFTC regulations.
Launching a crypto exchange business comes at a minimum cost of above $100,000 since there are many components to the business itself. While you may not need all of this funding from the get-go it is important to ensure that it is available to you for the business to run smoothly. Like with any business you will need to invest funds until it can become profitable. Make a plan of your expenses to avoid running out of money.
3. Software solution provider for cryptocurrency exchanges
With today’s generation becoming more digital, software development is one of the most important aspects of any business. You will need a reliable software provider to power the exchange of crypto. The most popular one is white label exchange software, which allows you a custom build exchange.
Liquidity is the key to any prosperous exchange business.
If your business doesn’t have trading activity, potential customers will view it with suspicion. To avoid this and to increase liquidity, you need to connect your business to a grid of existing crypto exchange businesses.
It will be necessary for you to work with a payment processor. Keep in mind that they all differ in fees. For your exchange business to be successful you need the lowest possible transaction tariff. Also, make sure to go over the contract thoroughly before signing it since many payment processors have hidden fees.
Protect your new venture against cyber threats by ensuring your payment processor is PCI-compliant.
Due to cybercrime and hacking, cryptocurrency exchanges are scrambling to differentiate on security grounds. You need to use secure technology that will protect you from data breaches and hacking.
7. Beta testing
After you have gone through all these steps, you will need to launch a business. With beta testing, you will have an audience try out your exchange, and there you will be able to see if everything is operating as it should.
Marketing is the way to get your voice out there. Like with any new business you need to have a marketing plan to be seen. Utilize social media as a free marketing tool, and consider employing a marketing specialist to make sure you advertise your business the best way possible.
9. Customer support
You will determine your long-term success as a cryptocurrency exchange based on your ability to excel in customer support. You will need customer support that is available 24/7 and responds quickly to any questions or complaints customers may have.
10. Legal team
With crypto laws evolving as we speak, you will need a proper legal team that will make sure all laws and regulations are met.