Cryptocurrencies have become a real phenomenon for the financial market. This asset has become very popular, and its value has grown many times since its inception. It’s no surprise that many traders are thinking about how to start a cryptocurrency business. Yes, the market can be volatile and the price of coins can go down. But experts all over the world are talking about the prospects of this segment. And the statistics confirm this. According to information in the summer of 2021, the blockchain contains numbers of more than 73 million users. Moreover, the growth over the past six months has amounted to almost 16%.
However, the cryptocurrency exchange is interesting not only for traders. Many users use these sites to store their assets. About 2/3 of holders of digital currencies use cryptocurrency exchanges as places to store capital. Coinmarketcap has conducted market analysis. According to this, today about 400 platforms offer their services. Cryptocurrency exchanges are divided into spot, derivatives and DEX.
Despite the prospects of this segment, the decision to start a cryptocurrency exchange business is associated with great risks. Because this direction has a large number of nuances and pitfalls. Let’s see what this means.
Basic Concepts and Types of Cryptocurrency Platforms
Obviously, every new player should study all the available information before creating a cryptocurrency exchange. You need to learn about what an exchange is, what functions it performs, how to start a crypto exchange and other issues. The cryptocurrency platform allows users to sell, exchange or buy digital assets.
There are several types of popular sites with different functionality.
- Digital exchanges. Here, users can only work with Bitcoin or other altcoins. The site does not work with fiat currencies.
- Platforms that allow customers to buy, sell or exchange not only cryptocurrencies, but also fiat money.
- Margin platforms. Here the client gets the opportunity to use leverage to increase profits. Such platforms do not work in some countries. Moreover, the user must understand that risks are also increasing.
- Centralized exchanges. Sites working with financial regulators and licensed.
- Decentralized platforms. Special platforms without licenses, which provide clients with additional anonymity and access to a dark pool of liquidity.
There are exchanges of the same type, but there are also platforms that combine several qualities from this list.
Step-by-Step Guide, How to Start Crypto Exchange
Many companies today are thinking about how to create a cryptocurrency exchange. This process consists of several important stages.
- Obtaining a license. An important step in the process of creating a crypto exchange. The broker analyzes the conditions of various financial regulators, collects documents, makes changes to the platform (if it does not comply with the rules). After that, the regulator conducts an inspection and issues a license. It is worth saying that decentralized exchanges do business without licenses, and this stage is not mandatory for them.
- Choosing a liquidity aggregator. The main task of a liquidity provider is to provide reliable intermediation between traders and market makers with a large pool of liquidity. This approach allows you to minimize order time and make the deal more efficient, avoiding price slippage.
- Quality software. The broker must give the trader access to the best tools and trading platforms. The problem is that MetaTrader5 or MetaTrader5 costs 100-200 thousand dollars. Segment leaders use excellent white label cryptocurrency exchange software with a lot of customization. Such software allows you to work with the chosen trading platform, create a user-friendly site and make the entry threshold minimal. At the same time, the provider company controls the white label trading platform and provides professional support.
Also, the process of starting a cryptocurrency exchange includes a number of important aspects:
- Software (API connection, CRM systems setup, selection and installation of other components);
- Financial (organization of cooperation with reliable and popular payment systems: replenishment and withdrawal of money, execution of transactions, etc.);
- Marketing (website promotion, advertising campaigns to attract new customers, etc.).
And if you decide to create your own crypto exchange, then it is important to remember all the pitfalls and study as much information as possible. However, there is a simpler and more effective way – cooperation with the white label crypto exchange. In this case, you are working with an experienced company offering turnkey solutions. B2Broker can be an excellent guide to the world of cryptocurrencies. After all, the company offers excellent conditions for clients: high-quality white label crypto exchange software, round-the-clock support and assistance in obtaining a license. This is a great opportunity to get into the forex prime brokers segment and create the best white label cryptocurrency exchange.