A Bitcoin exchange is a lucrative business with good returns now that the cryptocurrency sector is growing rapidly. But the venture is exposed to numerous risks that you have to deal with to build a reputation.
A Bitcoin exchange provides buyers and sellers with a platform to transact, but also offers other services such as digital wallet hosting.
Starting this business is a process that requires preparation, acquisition of the right skilled experts, hardware and software, and many other resources. That said, let us dive into a simple guide on how to start a Bitcoin exchange business.
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Understanding the Regulations of Your Area
Although cryptocurrency is decentralized and no government can regulate it, each country has some rules and regulations to guide third-party crypto exchange service providers.
So, as an aspiring entrepreneur, you have to know all of them.
Currently, the biggest concern is the Know Your Customer (KYC) requirements, which are in place in almost all countries around the world. Therefore, when setting up the systems, then you must have a system with these norms.
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According to research, new Bitcoin exchange businesses have liquidity challenges when they are starting up.
But one can resolve this by creating two official accounts and then transact to create trading activities. Alternatively, you can connect your platform with an existing one through an API to show liquidity, especially to clients who are sensitive or have trust issues.
Last, a new exchange business can join a network with many crypto exchange businesses to enjoy liquidity.
Having a Benchmark
Before starting, it is good to have a benchmark. This should be a successful Bitcoin exchange platform with a good reputation. YouHodler Bitcoin exchange is a good example and you can visit their website to get inspired and get learn how the platform has grown over time.
You may not be where such a successful company is within a short time, but they will give you a direction to take. If you are not over-ambitious and plan well, then your business will grow well over time.
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Setting Up the System
Another important consideration is setting up the system. This is a hard part where all the resources are brought together to form a Bitcoin exchange platform. It is also the point where you decide the commission you will charge for the services offered.
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You should also partner with a bank or a payment processing institution at this point. Here is more of what you need:
1. Secure software – As we all know, one of the major challenges in crypto services is security. Encrypted security that cannot be hacked is paramount. It should also be smooth with all of the features that make Bitcoin trading possible.
2. Collect hardware – Yes, having hardware such as secure servers, computers, and other devices is inevitable in this business.
3. Right human resource – Experts in cryptocurrency and technology are needed for this business to run smoothly.
Marketing Your Bitcoin Exchange Business
Before and after the business has started, marketing is very important. Digital marketing works best for sensitive people on your platform and services.
Now that you already have a website where the operations are done, link it everywhere so that people can follow you.
When you take this direction, your crypto exchange business will take off successfully and grow rapidly.