Negosentro | Cost to start a crypto exchange | Starting a crypto exchange can be nerve-wracking because the predicted sums range from small investments to ridiculously high values. Startup capital is one of the most important elements of your emerging exchange, and below we highlight what exchanges need to take into consideration first.
The software represents the core of any crypto exchange, and new exchanges can opt for an affordable solution such as a white-label exchange that offers basic trading options. In-house development will drastically raise the price of your startup. Additional software like a CRM platform should also be considered to automate processes and decrease costs.
Selecting a license enables your exchange to attract new clients and expand the business process. Offshore licenses are easy and cheap to obtain; however, they come with some limitations. By establishing your exchange in one of the top jurisdictions, your exchange attracts higher net-worth users, but this all comes at a higher cost. Also register for a best crypto tax software so that regulations are followed and paid correctly.
As your platform’s user base expands, exchanges need to cover key positions to ensure the platform can operate smoothly. Each exchange should hire a team of support staff to answer any queries on a 24/7 basis. Compliance staff should actively verify users’ credentials and KYC submissions to ensure the exact operates legally. This latter component can be outsourced to reduce costs.
The exchange should have a technical team to solve minor issues and maintain the platform’s technical infrastructure. In addition, a financial team should be established to prevent fraud by manually verifying and validating users’ withdrawals. Finally, the trading operations component helps the exchange operate without many mishaps, leading to a loss of trust in the exchange. The operations team ensures traders processed by the platform are not causing an issue with the liquidity providers, and they look for opportunities where accounts can perform better.
Liquidity determines if users continue to use the exchange. Thus, crypto exchanges must connect to several external providers, indicating the platform has enough market depth to cover orders. For that, providers require clearing accounts to be active.
By offering multiple deposit and withdrawal methods, exchanges can increase the number of new users they can take on. Each payment provider has its own set of terms and depends on the exchange’s total turnover and trading volume.
Exchanges need users to be profitable; however, predicting the total cost of a marketing campaign is not easy as it depends on several factors, including the market conditions or how the exchange is positioned in the market. Therefore, platforms must experiment with several campaigns until they find a winning solution.
As an estimate, salary budgets can range between $1,000 a month to $20,000. Regulatory developments start from $10,000, while license expenses start as low as $20,000. However, software development starts from $30,000 with a monthly fee of $5,000. The bulk of the budget might be directed towards marketing, starting from $60,000 per year for a new exchange.
Soft-FX offers quality crypto-oriented products and solutions to allow exchanges to thrive in the new market.