How to Start a Crypto Exchange Platform? An Ultimate Guide for Startups

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How to start a Crypto exchange platform
How to start a Crypto exchange platform

Many people would probably know the bitcoin Pizza story. It was the first purchase with Bitcoin on May 22, 2010. Hence the day is celebrated as “Bitcoin Pizza Day”. It was Laszlo Hanyecz who purchased the Pizza with 10,000 BTC which was worth $41. Moreover, investing in Blockchain projects is becoming an increasingly popular trend in recent days. Thus, many startups and business people started entering the market to start a blockchain-based business. One such best blockchain business idea is starting a Cryptocurrency Exchange and making a profit with it. 

This is an ultimate guide for investors, entrepreneurs, and business persons. This guide drives you to the appropriate destination to the query of – how to start a crypto exchange successfully?.

Come, let’s get started! So let us begin with…

What is Cryptocurrency Exchange?

Let us first explain to you the basics of cryptocurrency exchanges. A Crypto Exchange is a trading platform through which users can trade a wide variety of cryptocurrencies. In return, users will pay a charge of a fee in the name of the Trading fee. In this way, the owner of the exchange gets a vast amount of profits for every successful trading done on its platform. Some crypto exchange platforms are prevailing in the blockchain industry. Such as Coinbase, Binance, LocalBitcoins, and paxful. In this current time, there are three different types of exchanges. Such as 

  1. Centralized Crypto Exchange
  2. Decentralized Crypto Exchange
  3. Hybrid Crypto Exchange

Why do you Need to Start a Cryptocurrency Exchange?

The very first step is to know the reason to build a cryptocurrency trading platform. Remember, creating a crypto exchange platform is equivalent to creating a corporation. The creation process of crypto exchange may be complex which requires a lot of effort and resources. Consider the success stories of popular crypto exchanges like Coinbase and Binance. They have gone through these days to remain successful in the crypto marketplace.

The most important advantage of starting a Cryptocurrency Exchange is the crypto market. As the prices of cryptocurrencies are already heading up, we can expect a great number of users to start trading in the exchange platforms. At the time of writing this article, the current price of Bitcoin is more than $28k. With the higher volatility in the crypto markets, users will reach the crypto exchanges to trade virtual currencies. Therefore, it is always best to start a crypto exchange platform to make more profits in a short time.

Now, let us see…

How to Create a Cryptocurrency Exchange Website?

Here we list some easy steps that you need to follow for creating a secure crypto exchange successfully. 

  1. Figure out the different type of crypto exchange
  2. Do Extensive Market Research 
  3. Find your Target Audience
  4. Know Jurisdictions and Regulations in the country
  5. Hiring a Legal Team of Counselors
  6. Obtain the required funding for your project
  7. Choose the Perfect Cryptocurrency Exchange Development Company
  8. Technical aspects
  9. Integrate high-level security mechanisms
  10. Enhance Liquidity in your exchange
  11. Partner with payment processors
  12. Do market your crypto exchange
  13. Render 24/7 customer support

1. Figure out the Different Types of Crypto Exchanges

The initial step to launch your own cryptocurrency exchange is to determine the type of trading platform you have to create. Moreover, popularity also plays a major role while choosing the type of exchange as the target audience will be more comfortable with certain exchanges. Here is the list of distinct types of cryptocurrency exchanges in the market

  • Centralized Exchanges

Centralized Exchanges are the traditional forms of cryptocurrency exchanges. In this type of trading platform, a third-party or a middleman will be available to perform the transaction for the users.  This kind of crypto exchanges will charge around 0.1-1.5% of the trading fee. Moreover, users of Centralized Exchanges do not have access to the private keys of their crypto wallet. 

  • Decentralized Exchanges (DEX)

In the case of Decentralized Exchanges, there is no such middleman involved to regulate the transactions. Therefore, the exchanges don’t hold user’s funds, positions, or other information and just serve as the matching engine for trade orders. Since there is no popularity with DEX Exchange, these exchanges lack liquidity. But on the other hand, these crypto trading platforms are highly secured undoubtedly.  

  • Hybrid Exchanges

As the name suggests, these exchanges are a combination of Centralized and Decentralized Exchanges. These trading platforms are built with the motto of solving the cons associated with both the exchanges and bringing in a reliable and trustworthy crypto trading platform. 

  • User to Admin Exchange

This is one of the P2P Cryptocurrency Exchange which is made specifically for Users & Admin. Popular crypto exchanges such as Coinbase, Coinmama are user to admin trading platforms. 

  • Order Books Exchange

This is one of the P2P Cryptocurrency Exchange which records all records and transactions happening in the marketplace.

  • Ad Based Exchange

Your users can trade digital assets by running the relevant ads on the crypto Exchange Platform.

Based on your business requirements, choose the right type of crypto exchange and proceed with the next step.

2. Do Extensive Market Research 

Do complete research in the crypto market. In this case, you can refer to Crypto Calendars. Such as CoinDesk, CoinTelegraph, CoinIdol, and more. Additionally, you can also refer to Cryptocurrency Exchange Tutorials from the technical end. If you have the technical knowledge, compliments from my end. Also, you can analyze the latest crypto market trends and features of crypto exchange.

3. Find your Target Audience

Once you have your idea with your market research, now it is time to find your target audience. To do so, you should know the country where your crypto exchanges are supported. If you are not sure of this, then here is a list of some of the best crypto-friendly countries to launch your crypto exchange. 

  • Malta
  • Switzerland
  • Gibraltar
  • The United States
  • The United Kingdom
  • Japan
  • Singapore
  • Luxembourg
  • Bermuda
  • Estonia

So, perform complete research on it and select a country to launch your crypto exchange. Once you have chosen the country, find your competitor’s exchanges in the country. Remember, to stand unique in the market, you must have additional attributes and entities. 

4. Know Jurisdictions and Regulations in the Country

As each country has its own jurisdictions and regulations with cryptocurrencies, it is important to know them. As I have mentioned already, it is pretty good to get started in the above countries. So that you can easily launch a cryptocurrency exchange. If you build crypto exchanges for countries that haven’t accepted Cryptocurrencies. Then you might be involved in risks. 

5.Hiring a Legal Team of Counselors

You must hire a legal team and check everything is on the right path. Proper licensing is more essential here. To be on the safer side, your crypto exchange must consist of KYC. Along with KYC, Anti-Money Laundering is more essential. Both KYC & AML will require User Identification proofs. Such as International Passport, License, etc. The next thing is to register your company. As you are qualified to launch a crypto exchange, it is important to get registered.

6. Obtain the Required Funding for your Project

The funding of your project usually includes the cost of technology, cost of solution provider, cost of government and its regulations, initial advertising, etc. Make sure you have the required funds to manage all these.  Additionally, you should also have a future insight into your project. This is the major mistake some startups and entrepreneurs encounter.

7. Choose the Perfect Cryptocurrency Exchange Development Company

Now it is time to choose the right crypto exchange development company for your business. It is impossible to create a secure crypto exchange without hiring the right set of Crypto Exchange Developers. To set up your crypto exchange, you should hire a top-notch cryptocurrency exchange development company to fulfill your needs and unique requirements. One such top-notch company is Zab Technologies. At Zab Technologies, we have all set of desired experts who have rich experience in providing the best cryptocurrency exchange development service. 

8. Technical Aspects

Now you can list your technical features to your team. To start a cryptocurrency exchange platform, you must enable advanced features to offer a better experience to your users. Let us see some of the desirable features that have to be embedded into the crypto trading platform.

  • Initial Exchange Offering Module

IEO is the popular crowdfunding strategy that most startups and enterprises are making use of. 

  • Mobile Application for Android, iOS devices

Many crypto users would like to trade on mobile applications. Hence, you can create a crypto exchange application that supports Android and iOS devices.

Zab Technologies majorly make a crypto exchange mobile app which is built with advanced technology stacks in the industry

You must integrate Cryptocurrency Wallets into your exchange platform. Additionally, it will be beneficial if your crypto wallets support multiple digital currencies. such as Bitcoin, Ethereum, Litecoins, etc. 

This feature will help your users to facilitate crypto transactions fast and secure without any hurdles.

  • Security Token Exchange

By adding this feature you can support security tokens like real asset tokens to get listed. As most of the companies have started to move with Security tokens. So there are higher chances that they can be listed on your crypto exchange.

  • Trading Bot

This feature can be integrated when your users want to trade 24*7. 

  • Admin Dashboard

As a Crypto Exchange Owner, you can design your customized Admin Panel from your end. By integrating advanced CMS, you can manage the exchange platform as per your choice.

  • User Dashboard

Similar to your Admin Dashboard, you should give equal importance to your trader’s dashboard. To build an ideal crypto exchange, you can make use of premium Cryptocurrency exchange software.

  • Leverage Trading

With the Leverage Trading feature, your traders can borrow a certain amount of money to invest in any crypto. Most of the popular crypto trading platforms like Kraken and BitMex support these features. 

  • Referral Program

To introduce your exchange to worldwide users, you can integrate the Referral program feature. This affiliate program is intended to gain a vast number of users by referral.

  • Multi-Language Support

This feature automatically translates your crypto exchange website into the required language.

  • Matching Engine

A matching engine plays a greater role in the exchanges. A Matching Engine is responsible for matching the buy & sell orders of the traders. 

9. Integrate high-level security mechanisms

Here we list the powerful security features that you must enable in your crypto exchange platform.

  • HTTPs authentication
  • Jail login
  • DDoS mitigation
  • Data encryption
  • Two-factor authentication
  • Anti-phishing software
  • SSL integration
  • Multi-signature vaults
  • Browser detection security
  • Escrow services
  • End to end encrypted transactions

We at Zab Technologies, support all these features for cryptocurrency exchange development. If you need White-label Cryptocurrency Exchange software our experts are ready to assist you right away!

10. Enhance Liquidity in your Exchange

Liquidity is a crucial factor in cryptocurrency trading platforms. With higher liquidity, your traders can instantly buy and sell cryptocurrencies. If you look at current cryptocurrency exchanges, they have higher chances of problems with liquidity. So to improve liquidity in your crypto trading platform, you can connect with external providers through API. Thus, you can expect an ample amount of users to trade on your platform and also enhance your Liquidity. To bring in higher liquidity, our experts make use of API correlation with other exchange providers. 

11. Partnering with Payment Processors

Remember not all payment processors are equal. They vary with the characteristics of fee structures and other entities. As there are more cryptocurrency exchanges in existence, to stay ahead of the competition you should have the lowest transaction fee. While some cryptocurrency trading platforms build hidden fees into their contracts. So be sure you understand the contract before you sign. 

12. Do Market your Cryptocurrency Exchange

Now it is time to start marketing campaigns. While coming to the crypto exchange marketing phase, you can make use of both Organic and Paid Ads to the fullest. Ads here refers to Google Ads, Forum Ads, Social Media Ads, etc. So, frame a perfect market strategy plan and work accordingly. You can make use of messengers like Slack, Telegram, Reddit to introduce your exchange. Social media channels like Facebook, Linked In, Instagram can also be a perfect way to bring in a huge set of audiences in your cryptocurrency exchange. You can also focus on Email Marketing strategy. Mark all these Marketing strategies in your checklist and perform accordingly. 

13. Render 24*7 Customer Support

It is essential to lend your hands to your users in case of any issues or errors. This step will pave the way to create a successful crypto exchange platform in the industry. Therefore, have an expert team that can support the users anytime and they must resolve their issues as soon as possible. 

These are the important steps you need to follow to start a first-class crypto exchange business successfully.

How Much Does it Cost to Start a Crypto Exchange Business?

In general, to create a cryptocurrency exchange requires too much expertise as well as efforts excluding the cost. Apart from this, the cryptocurrency exchange development companies usually charge either in terms of hours or monthly payments. To put it in simple words, the total cost of the project depends on the features you have embedded into the cryptocurrency trading platform. Additionally, some essential factors shape the cryptocurrency exchange development cost. Such as

  1. Type of crypto exchange you have chosen to launch
  2. Security aspects
  3. The complexity of the project
  4. The number of platforms you are planning to launch(web, android, ios)
  5. Location and Size of the crypto exchange development team
  6. License for your crypto exchange

Thus, the approximate cost to develop a crypto exchange from scratch will range from $12k – $15K. But based on your business requirements the development cost might vary. If you use the premium white label crypto exchange software, the crypto exchange development cost will be cost-effective. Also, you can launch a feature-packed crypto exchange within a few days.

Why Choose Zab Technologies For Cryptocurrency Exchange Development?

Zab technologies, the prominent Cryptocurrency Exchange Development Company in the industry. We can now render you with both Whitelabel crypto exchange software and crypto exchange development from scratch. We specialized in offering all kinds of blockchain development services with perfect outcomes. Being the best-in-class Cryptocurrency Exchange Development company, we provide feasible Cryptocurrency Exchange Development Services with enabling all the essential features and tightened security aspects. Apart from this, we are also masters in providing blockchain services like crypto wallet development, crypto payment gateway development, and more. By utilizing our crypto exchange development service, you can start an exemplary crypto exchange business at an affordable cost.

Get in touch with us and turn your cryptocurrency exchange business dreams come true!

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About the author

Steve

I have started my career with Search Engine Optimisation and slowly concentrated on creative part as well. Now I'm working with a leading Blockchain Development Company in India - Zab Technologies

By Steve

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