If you’re looking to enter the billion-dollar cryptocurrency market, the profitability prospects are on your side. In 2022, businesses in the cryptocurrencies segment made an average of $135 per user. And it will continue to grow at an annual growth rate of over 16% over the next few years.
That said, the competition won’t be easy to beat – Coinbase has over 100 million users, and Binance has over 90 million. A new platform for crypto entrepreneurs and investors would need to pack a lot of features and offer premium performance to be noticed. That, of course, only covers a tiny portion of exchange developers’ considerations.
Perhaps you don’t mind the rocky journey of going against leading crypto companies. If that’s the case, continue reading and learn how to create a cryptocurrency exchange website.
Which Innovations Will Help to Create Cryptocurrency Exchange Platforms in 2023?
2021 was a breakthrough year for non-fungible-tokens (NFTs), DeFi on Ethereum, DAOs, and Ethereum competitors. Obviously, the evolution in crypto did not stop there. If you’re creating a cryptocurrency exchange platform in 2023, there are a few key trends to keep in mind:
- DeFi on Bitcoin – Most successful DeFi projects have been developed on smart contract blockchains. Ethereum received the most attention; less attention fell on Binance Smart Chain, Solana, and others. But the recent Bitcoin Taproot upgrade improved the possibilities for DeFi on Bitcoin, which will need to be included in modern exchanges.
- Metaverse – Huge amounts of money are being poured into the metaverse, and it shows. The rise of this vast virtual space requires a platform where users can exchange their metaverse crypto with others.
- GameFi – The combination of blockchain gaming, NFTs, and DeFi is also getting immensely popular. As users get more comfortable with designing, sharing, and selling in-game assets, more gamers will be asking where to exchange cryptocurrency.
- Interoperability 2.0 – The call for interoperability is getting louder. So, exchanges need to take steps toward an interoperable crypto world. Solutions bridging funds from one blockchain to another (as well as funds that have to be moved from one layer to another) are already in high demand.
How to Start a Cryptocurrency Exchange Platform: 10 Steps
Now, let’s move on to the main section – how to create a cryptocurrency exchange that will become a profit-making business.
1. Identify the Type of Exchange You Want to Launch
The first level of distinction is online/offline. A physical outlet isn’t too popular among users, so you definitely want to operate your crypto exchange online.
It gets more interesting as you learn about other types of exchanges:
- Centralized (CEX) – Functions as a middleman between cryptocurrency buyers and sellers
- Decentralized (DEX) – Operates with no single entity in charge
- Hybrid (HEX) – Combines centralized and decentralized exchange features
- Peer-to-peer (P2P) – Executes transactions without any third-party involvement
- Derivative – Handles contracts that derive their value from crypto as an underlying asset
- NFT – Functions as a digital marketplace for buying and selling NFT tokens
2. Conduct Thorough Market Research
Study the market to determine the latest crypto trends and the must-have features for attracting crypto users.
You probably know that the crypto market is highly volatile due to numerous social and economic reasons. And there are new developments taking place every day, which you need to know about. An in-depth analysis of current events will help you understand the right time to leap into the cryptocurrency exchange business.
Of course, you also need to research competitors. Learn about the companies that have established themselves as the best. See what they offer and think about what you can do better, especially in terms of features that can improve your visibility.
3. Determine Your Operational Limits
This point covers a broad topic – setting limits for what you can provide, where, how, to whom, etc. One of the most important operational limits to set is choosing your locations. You’ll likely want to operate in different jurisdictions to broaden your audience. But remember that not every country is open to accepting crypto, meaning some will fall outside of your operational scope.
Some countries are taking the opposite approach – for example, the USA, many EU countries, Canada, Japan, Singapore, Malta, and Australia are recognized as crypto-friendly countries.
You’ll also need to decide which cryptocurrencies to accept. Try to be as versatile as possible – covering major coins like Bitcoin and small tokens like Bui.
4. Partner With a Payment Processor
You could decide to be a crypto-only exchange, but this will guarantee less business. Users of crypto trading websites prefer to have the option to deposit and withdraw fiat.
Work with a payment provider that offers a sufficient number of online/offline facilities, partner-friendly conditions, and great exchange rates. It’s also helpful to establish your connections with your target users in mind. For example, if you will be targeting the USA in your marketing campaigns, make sure you can offer the most popular means of payment in the country.
5. Build the Exchange Architecture
Now, you need to define the technical structure for your cloud technologies. Basic software infrastructure for a crypto exchange will include:
- Trading engine – The engine will perform transactions, process orders, calculate balances, and confirm the availability of funds.
- Frontend – The user interface is essential for quick and smooth processes and should be adapted for different devices and levels of technical knowledge.
- E-wallet – Crypto wallets are separate products, but you will gain a competitive advantage if you provide one on the website.
- Admin panel – Ensure you can track the current state of your exchange, traders, wallets, transactions, and content on a powerful dashboard.
The technical structure of crypto platforms can vary significantly, so you’ll need to make decisions about each of these components.
6. Implement Key Features
Consider reinforcing your exchange with a sufficient number of features:
- Wallet integration
- Leveraged trading
- Multi-cryptocurrency support
- Multi-language support
- Market making
- Staking and rewards
- Educational resources
If you’re wondering how to make money with your own cryptocurrency, you can look into creating a coin and launching it on your exchange.
7. Ensure Security
To protect your future clients’ sensitive personal information, implement high-end security systems:
- HTTPs authentication
- Two-factor authentication
- Data encryption
- Jail login
- Registry lock
- SQL injection prevention
- DDoS, SSRF protection
Also, ensure that the platform complies with relevant regulations to offer a safe base for all the transactions, ICO, and fund withdrawals that users will hold.
8. Provide Liquidity
Maintaining high liquidity will help establish and maintain a good reputation in the cryptocurrency market. You can artificially model demand for your exchange by:
- Creating multiple profiles and managing them yourself, i.e., buying and selling massive amounts of crypto yourself
- Connecting your exchange to the network of other exchanges and receiving trading volume from different services
9. Organize Customer Service Management
Customer care and technical support will be relevant after the launch, but you need to plan for it in advance. As soon as your exchange goes live, there will be users asking for help with creating accounts, depositing money, or just any general questions about how to use the platform.
Crypto trading is a 24/7 business, so the customer team will need to be there any time of day. Hire at least a few employees to react quickly and help with the required competency.
Another important aspect is the variety of communication channels (chat, support tickets, email, Telegram, Discord, etc.) and languages (depending on your target regions). If users are happy, they will continue using your exchange and recommend it within the trading community.
How Much Does It Cost to Create a Platform for a Cryptocurrency Exchange in 2023?
Generally speaking, you can launch a crypto exchange platform in 2023 for under $40k. That will cover basic features and minimal integrations. If you have a higher budget, say, over $100k, you will be able to accomplish a lot more.
Here are the types of services that are generally included in the development:
- Business analysis and consulting – Determining how the solution can meet your business needs
- UX design – Ensuring smooth navigation with a focus on the target audience’s understanding
- UI design – Translating UX wireframes into mockups with eye-catching visuals
- Web engineering – Establishing lean and agile processes and building custom functions and features
- Quality assurance – Ensuring the website meets the established quality specifications
- Maintenance and growth – Keeping the website efficient, competitive, and compliant
At any stage of the process, you can make the website simpler or more complex, which will affect the cost.
Bear in mind that personal customization makes a big difference in the development cost of an exchange. You will find your budget somewhere in the $40k – $100k range, depending on what exactly you want to build.
Consider Tino Agency Your Trusted Partner
Now, it’s time to choose your development team. At Tino, we’ll make launching a crypto exchange platform in 2023 easy. We’ll help you cater to both professional and novice traders with a user-friendly and flawlessly-secure cryptocurrency exchange.
If you want to learn how it’s done, just take a look at our portfolio. For example, one of our proudest web development projects was for Rubyscout.
With a team of 5 members and after 860 hours spent on development, we succeeded in creating an engaging and full-featured website for 10,000 daily users. We even incorporated gamified elements that rewarded users for contributing photos and reviews. At every stage of the project – from researching to launching – we were in close contact with the client and made sure their vision was implemented perfectly.
You, too, will be fully supported at every stage of the cryptocurrency exchange platform development. We’ll explore different concepts together and build a website that will attract even the pickiest users.
Building a crypto exchange has become a popular revenue-generating business model in the digital world, but there is still room for more platforms!
Even with the plethora of cryptocurrency exchange websites out there, it’s possible to create a crypto exchange platform that will edge out the competition and succeed. New players appear in the crypto market, and you can be one of them. But you need a solid plan and a great development partner.
It depends on how you want to build your cryptocurrency exchange. If you’re working with an agency, they will provide an estimate themselves. If you choose to build one on your own, consider the labor costs (development, testing, bug fixes, maintenance), scope, the complexity of features, and, most importantly, how much time the project will take.
Generally, website development is easier and cheaper than mobile development. It makes sense to build your own Bitcoin exchange website first and make plans for building an app later on. However, it all boils down to your business needs and the features you include.