Cost To Start A Crypto Exchange From Scratch

If you are considering starting your cryptocurrency exchange, one of the first things that come to mind are questions like, “How much money do I need for my startup?” Unfortunately, cost assessments aren’t always easy, so we’ve taken some time to precisely break down the costs that might be incurred to figure out where capital is needed.

Software expenses

To get the most out of your exchange, it is important to select software that can satisfy all user demands. White label exchanges are generally cheaper and easier than developing a new exchange from scratch. Every exchange should consist of a matching engine, liquidity aggregation, and trading platform, as these are must-have features for any exchange. The white label exchange can save owners a lot of money while containing essentials without paying excessive costs, but they must include tools to allow the platform to grow further.

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License fees

The choice of a license becomes as crucial as the choice of your software. Selecting an offshore license is a cost effective solution but will limit your trading in the long run as it restricts your payment gateway selection. Tier one licenses can cost exchanges tens of thousands of dollars; however, they will be rewarded with a higher flow of capital once the exchange is underway. However, higher-level licenses require more paperwork and need to be audited, which incurs additional costs.

Employee expenses

Most of the capital is spent on employees to ensure smooth operations and user feedback. So, a crypto exchange should hire support, compliance, and funding operations to respond to all user inquiries, ensure payments are executed, and perform KYC to ensure no fraudulent activity takes precedence. .

In addition to this, trading operations and technical teams are required to ensure the smooth running of the platform software and can monitor platform activity such as liquidity management or aggregation on the backend.

Liquidity expenses

Exchanges must ensure that the platform has enough liquidity, and depending on their business model, a new crypto exchange must have appropriate market depth. This means that external providers will need an open checking account where capital should be placed and cleared once trades are executed. Additionally, depending on the volume of trading activity, more money may need to be blocked in accounts.

Payment solutions fees

The diversity of payment solutions defines the number of users an exchange can potentially acquire. As a result, businesses should have more payments available; however, their expenses will depend significantly on their overall turnover.

Marketing costs

Defining the marketing budget is like a needle in a haystack. It greatly depends on your target audience. But, as a general rule, marketing should be driven by your target audience. Unfortunately, there is no one-size-fits-all strategy and exchanges need to collect data before setting a budget.

Basic calculation

A new exchange could spend between $1,000 and $10,000 on staff for monthly operations and get a license starting at $20,000. A white label exchange will attract funds worth at least $30,000, and a monthly marketing strategy can cost around $60,000 per calendar year.

Soft-FX provides future crypto exchanges with profitable solutions for their next venture!

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Cost To Start A Crypto Exchange From Scratch


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