The cryptocurrency asset management industry is the new gold mine. It is developing at such a fast pace that by 2025 its market size will hit $1.12 billion according to industry experts. With cryptocurrencies growing popular by the day, the industry’s progress will be even more astronomical.
There are a lot of opportunities in this relatively new niche. It is crying out for innovators to take a bold step and come up with solutions to manage people’s assets. The industry needs financial consultants, thought leaders, and above all, online platforms to facilitate cryptocurrency trading.
Trading of crypto assets takes place on cryptocurrency exchanges. Here, people can buy Bitcoin or different altcoins and trade them for other crypto assets or fiat currencies. Some of the best platforms existing today include CEX.IO, Coinbase, Binance, and Kraken. But did you know that you can create your own cryptocurrency exchange?
Why Create Your Own Crypto Exchange
Many people are looking to get into cryptocurrency trading. While there are hundreds of exchanges already, they can’t cater to the needs of all those in the cryptocurrency industry. So, there is a chance for new players to tap into the billion-dollar market. If you can create a cryptocurrency exchange with innovative solutions, you will make a killing in this industry.
If you want to build an exchange, it goes without saying that you must borrow a leaf from the existing best platforms. To succeed, one doesn’t need to reinvent the wheel. One needs to bridge the gap left by the existing platforms and provide solutions to real-world problems. What does one need to create a successful exchange?
How To Build A Cryptocurrency Exchange
In this guide, we will use CEX.IO as a reference. It is the perfect example of a successful modern cryptocurrency exchange. The platform is secure, trusted by millions, and offers modern solutions to its users.
So, how do you create a platform like CEX.IO?
Step 1: Research About Cryptocurrency
To run a successful exchange, one needs comprehensive knowledge of cryptocurrencies. Blockchain is technical and you need to take time to understand how it works before dedicating your business to it.
Fortunately, there are many resources to learn about blockchain technology online. Take advantage of these resources and get a good understanding of the subject matter. Also, learn about the existing cryptocurrencies and their market value. You will need this knowledge later.
Step 2: Understand How Trading Works
Crypto trading is not very different from forex trading. The most notable difference is the volatility of cryptocurrencies. Expertise in cryptocurrency trading will make it easier to design a friendly platform for your clients.
The best way to learn how cryptocurrency trading works is through practice. Try to trade on CEX.IO and other top platforms to get a feel of how it all works.
Step 3: Raise Capital
Building a cryptocurrency exchange requires a large setup capital. One needs money to create a secure web trading platform, market the product, and buy the initial coin reserves.
It is, however, imperative to note that the initial capital doesn’t have to be in millions. One can always start small, aggressively market the platform, and scale it with time.
If you don’t have enough capital to kickstart your exchange, there are a few ways to raise the money:
- Pitch the idea to potential angel investors. All that one needs is a good business plan and a great pitch. A little luck won’t hurt either;
- Apply for a loan from a bank. This will only work if you have a great credit score;
- Get funding from venture capitalists. There are many venture capitalists in the cryptocurrency industry. Get one or two onboard and kickstart your business;
- Invest your life savings. If you have enough trust in your product, why not invest the saved money you have?
Step 4: Design A Trading Platform
An online platform is the core part of your exchange. You should invest the majority of your time and money in creating the best possible platform for your customers.
Let’s take CEX.IO’s platform as an example.
- It has a clean, visually appealing design. The color choice is perfect and all the important features are intricately placed. This gives the user an enjoyable trading experience;
- It is secure. The company invested in advanced cybersecurity technology to ensure that funds and user information are safe at all times;
- It is responsive. Customers can trade from any device. They can also use a mobile app to trade on the go;
- It loads quickly. This further boosts the user experience on the platform.
You can borrow a leaf from CEX.IO and create a platform, which traders will enjoy using. Pay special attention to user experience and incorporate all the key trading features. Make your customers’ work easy, and they will always come back to trade.
Step 5: Decide On Coins To Offer and Trading Fees
This is a business decision. Choose the coins, which you intend to offer to your customers. This also includes the payment options, which your clients will have. Try and include as many payment options as you can to provide flexibility.
Finally, think about the trading fees and any other fees that you might levy on your clients. It is always advisable to be affordable, but don’t sink the business. As more clients enter your platform, the profit margins will improve and your business will grow.
Step 6: Test Prototype, Launch Product and Market It
Perform several tests of the prototype. It is needed to ensure that the platform is running as intended. Then, launch it and market it to the world. There are millions of people waiting to use it, you only need to sell it to them.
If you follow our guide above and borrow a leaf from top platforms, you will build a product with a great return on investment. There is no better time to create a crypto exchange. So, start today!