A cryptocurrency exchange is a blockchain-powered platform that allows any individual to trade major cryptos seamlessly and securely. It is not only a platform for traders but is also considered the finest crypto business idea among startups as it comes with many ROI factors.
The hidden truth is Crypto never sleeps and the demand for crypto exchange will not come to an end until people like to trade/invest in crypto for making profits. That’s why starting a crypto exchange like the existing one or developing a unique one is an exemplary crypto business idea in 2023.
Many people created brand new crypto exchanges in the last five years and imprinted their brand names among many people by building a strong crypto community. As a crypto startup, if you want to become one among them by starting a crypto exchange business, you have landed in the correct place.
This article covers 10 simple steps to start a cryptocurrency exchange business successfully in 2023. Our step-by-step guide will help you with everything that you need to know for creating a crypto exchange platform.
Well, let us begin this article with a question
Can anyone start a crypto exchange?
Yes, anyone with basic knowledge of cryptocurrencies and their growth in the market can start a crypto exchange business liberally.
The Best cryptocurrency exchange business has now come to normal for all people. Mostly many startups and entrepreneurs have a desired plan to start a cryptocurrency exchange. Starting a crypto exchange is not crucial until you find the right development company.
You no need to be familiar with blockchain to start a crypto exchange. The crypto exchange development company you prefer will guide you with all the technical processes and support you with all the transaction details.
10 Easy Steps to Start a Crypto Exchange Business in 2023
As a startup, you need to follow certain steps for launching a fully working crypto exchange website or mobile app. Here we list the 10 essential steps to start a flourishing crypto exchange business.
- Go through market research
- Identify the Right Location to start a crypto exchange business
- Review the laws and compliance requirements
- Select the right type of crypto exchange to Start
- Choose the best crypto exchange development method
- Design the Architecture of your crypto exchange
- Connect with a genuine crypto exchange development company
- Project Feasibility
- Integrate the Latest Trading Features and security modules
- Perform beta testing & Deployment
We will assist you with a detailed explanation of every single step involved in the process of starting a crypto exchange business.
Step – 1 Go through market research
To start a crypto exchange business, you need to do some market research in the crypto space. First, you must understand the crypto market, like how it functions and what are all the types of crypto trading that take place in exchange platforms. Apart from this, you need to understand the price fluctuation of cryptos in the marketplace.
The crypto market is highly volatile due to economical reasons, market sentiment, and performance. So you need to make a deep analysis of whether this would be the perfect time to start a crypto exchange business or not. If everything falls into the right place you can proceed to the next step.
Step 2 – Identify the Right Location to start a crypto exchange business
You need to decide which would be the right and best place for creating a crypto exchange platform. Because, some major countries like Russia, Bolivia, and Nepal are saying “No” to cryptocurrency. Meaning it is considered to be illegal and forbidden in those countries. So you cannot start a crypto exchange business where there is no value and you can’t launch a website against government rules & regulations.
However, some countries are allowing people to trade cryptos and start a cryptocurrency exchange. Here is the list of top cryptocurrency-friendly countries in 2023.
- The United States of America,
- Germany
- Japan
- Singapore
- Malta
- South Korea
- El Salvador
- European Union countries
You can choose any of these locations or conduct in-depth research to find the right location for creating the crypto exchange website/app.
Step 3 – Review the Laws and Compliance Requirements
The law for cryptocurrency differs in every country, so it is advisable to examine the rules and regulations in the country where you intend to start a crypto exchange business. In addition, proper licensing and registration are needed for operating a crypto exchange website and app in any country.
In many places, crypto trading platforms are operated without significant oversight. However, in the US, digital currency operators must get proper licenses from the government for Money Transmitter businesses. Moreover, they must also follow SEC & CFTC rules and regulations. Hence, consult a legal expert in the crypto field before starting a crypto exchange business in your desired country.
Step 4 – Select the Right Type of Crypto Exchange to Start
Deciding the type of exchange is crucial before kickstarting your exchange business. As of now, there are three different types of cryptocurrency exchanges in the global digital marketplace. They are
- Centralized exchange
- Decentralized exchange
- Hybrid exchange
Centralized Exchange:
Centralized crypto exchange (CEX) is an admin-controlled platform where users can trade a wide variety of digital currencies in a risk-free manner. There will be an administrator for every crypto transaction. When a user completes their trading, the admin of the exchange will charge a fee as a commission and it helps the owner to generate a lucrative revenue easily. Also, user transactions and crypto wallet balances will be monitored by the admin of the exchange. Order book exchange, ads-based crypto exchange, Crypto derivatives exchange, and a user-to-admin(OTC) exchange are part of the CEX.
Decentralized exchange:
Decentralized crypto exchange(DEX) is a peer-to-peer exchange platform and it functions without the admin or any third parties. In this type of crypto exchange, user privacy is highly protected and users will have full control over their funds. So most crypto traders prefer a decentralized exchange platform rather than a centralized exchange. Besides, this type of exchange has strong security systems when compared to CEX platforms.
Hybrid exchange:
To be precise, a hybrid exchange is a combination of both centralized and decentralized exchanges. This type of exchange includes both the features and security mechanisms of CEX and DEX. Example – Binance.
These are the major types of exchanges. Select the best type of crypto exchange that matches your business needs before crafting your crypto exchange website or app.
Step 5 – Choose the Best Crypto Exchange Development Method
Creating a crypto exchange platform is a complex process and requires a lot of technical expertise. There are two main ways to develop an exchange – from scratch or by using a premium cryptocurrency exchange script.
In general, Developing a crypto exchange from scratch requires more time, adequate funds, and resources, but it gives you the flexibility to customize your platform according to your needs. On the other hand, we have a cryptocurrency exchange script that helps to build a crypto exchange cost-effectively and instantly. It is easy to implement when compared to development from scratch. Besides, it also gives you access to all the features of an advanced trading platform without having to build it yourself.
No matter which method you choose, both have their pros. It’s important to understand them before deciding on which one is right for your project.
Step 6:- Design the Architecture of your Crypto Exchange platform
After choosing the crypto trading platform development methodology for your business, you can move on to the designing process of the cryptocurrency exchange architecture. For designing an effective exchange architecture, enabling four essential components is mandatory. They are
Trading engine:
It is the core component of any cryptocurrency exchange website. This component helps to perform transactions and has access to order books. Thus, the trading engine is an important component to develop an exchange platform.
Crypto Wallet:
A cryptocurrency wallet is a primary component in the exchange as it is used to store, receive, and transfer a wide range of cryptos securely. Without crypto wallet integration, you can’t build a crypto exchange website or app. So, implement a hot or cold storage type crypto wallet to offer a hack-free environment in your trading platform.
Admin Control Panel:
The admin panel is a type of control center where the admin manages the whole trading platform. All the orders, alterations, user management, transaction management, and other essential activities are done in this panel. It includes various tasks such as managing crypto trading pairs, trading fees, customer support, approving and verifying user accounts, transaction pending requests, new updates, and even more.
User Interface & Experience (UI / UX):
The UI/UX is also an important component that you must take into account while building a crypto exchange website or app. The UI/UX must be fascinating and friendly because it helps to provide an amazing trading experience to your users. You need to make sure that the UI/UX is compatible with multiple devices like smartphones(Android/IOS), iPad, tablets, and all browsers. To satisfy your global users and target audience, you must enable the following reliable functions.
- Register and access the account at any time easily.
- Deposit and withdraw virtual currencies at any time
- View the history of transactions, balances, statistics, and performance charts.
- Allow users to buy and sell major digital currencies at any time.
keep these vital components in mind while designing the cryptocurrency exchange architecture.
Step 7 – Connect with a Genuine Crypto Exchange Development Company
It is the most essential step in starting a cryptocurrency exchange business. Because currently, lots and lots of crypto exchange development firms are available in the global marketplace. But everyone doesn’t offer quality services. Only a few offer the best services for developing an exchange.
Among the few, Coinsclone is the top crypto exchange development company in the blockchain industry. We offer world-class crypto exchange software development services for all blooming startups, enterprises, and business owners. Connecting with us will help you to develop and deploy a tech-friendly crypto exchange website/app at an affordable cost.
Step 8 – Project Feasibility
In this step, you need to examine the project’s feasibility. The project feasibility will be based on the cost, time, and resources needed for the cryptocurrency exchange development. On the flip side, a deep analysis will be done by the technical partner which you choose for your project. And it would be based on the following crucial factors.
- ECONOMIC – Whether the project can be completed within the allotted budget or not.
- LEGAL – Whether we have the potential to handle this project as per the cyber law and other regulatory compliance.
- OPERATIONAL FEASIBILITY – Whether we can create operations as per the client’s expectations and requirements
- TECHNICAL – Need to check whether the current system supports the advanced technology that is involved in the project.
- SCHEDULE – Whether we can complete the whole project within the given time.
Step 9 – Integrate the Latest Trading Features and security modules
Features play a vital role in developing a successful crypto exchange website. The Trading features must be more effective for the users in your exchange. Integrating such features will help you to grab many crypto users from various countries and increase the overall user base of your exchange. Here we list ideal technical features that you must integrate into your exchange website and app.
- Margin trading
- Order book
- P2p trading
- Market making
- IEO module
- Referral program
- Effective User dashboard
- Liquidity API
- Multi-lingual assistance
- Crypto Payment gateway integration
- Automatic KYC/AML verifications
- Staking and more
By incorporating these trading features, both the experienced and the newbies will get the best trading experience. Next, you need to implement high-level security features. Here we list some high-level security mechanisms that you must enable on your crypto trading website.
- HTTPs authentication
- Jail login
- Data encryption
- Two-factor authentication
- SQL injection prevention
- Anti Denial of Service(DoS)
- Cross-Site Request Forgery(CSRF) protection
- Server-Side Request Forgery(SSRF) protection
- Anti-Distributed Denial of Service
By integrating these protective systems, you can eliminate hacking and other fraudulent activities in your exchange platform.
Step 10 – Perform Beta Testing & Deployment
After integrating all the important trading functionalities and security features, you can run a beta test. By performing the beta testing, you can collect the errors, bugs, and issues in the exchange. If unfortunately, your platform faces any issues in testing, you can easily rectify them instantly.
Once the beta testing is over, your exchange is ready for the deployment phase. In this phase, you will get your fully functional and ready-to-go live trading platform. After your exchange gets deployed with the help of professionals, you need to market your exchange through promotions.
The process of creating your crypto exchange does not stop with the deployment. Maintenance has to be done periodically for your platform as there will be some anonymous attackers who will look for some security hole to inject threats. This is not to threaten you, this is just a word of caution from our side. Thus, ensure whether your exchange platform is maintained with upgraded security modules or not after deployment.
These are the steps involved in launching a successful crypto exchange platform in 2023. Next, let us see…
What are the pros and cons of cryptocurrency exchange?
When coming to cryptocurrency exchanges, there are two types, one is centralized exchange and decentralized exchange. Let us see both exchange’s pros and cons.
The pros of a centralized cryptocurrency exchange
Convenience
The centralized exchange is accessible to both experienced and inexperienced traders. The transaction in centralized exchanges are user-friendly; they can log in to their account, access their financial statement, and performs payment via apps and payments.
Reliability
In a centralized exchange, the trading features come with high-end security to maintain the transaction details.
Cons of a centralized cryptocurrency exchange
Possibility of hack
The centralized exchange has a high chance of hack attempts since it has a third party like an intermediary who monitors all the users trading.
High transaction charges
A centralized cryptocurrency exchange mostly pays high transaction costs for its comfort services.
Is it easy to create a crypto exchange?
Yes, creating a cryptocurrency exchange is easy, but you should be careful with the development methods. Most startups are stuck with this development process and complicating their business. To avoid this unwanted lag in your business, you must have a clear understanding of the types of development methods and how long it takes to build a cryptocurrency exchange, let us see below.
How long does it take to build a cryptocurrency exchange?
The entire developing and deploying time of cryptocurrency exchange will take approximately 15 to 45 days and it depends upon the development method you choose to develop your platform. In the list of various development methods, We the coinsclone are here to help you with the most successful and often used development methods which are a development from scratch and using white-label software.
Development from scratch
Development from scratch is the ground-up level process where it requires a number of expert developers to plan the structure of the platform features, design, modules, etc. It requires technical things like coding, IDE, major programming languages, etc. It takes a minimum of a year to complete the development process. Its cost is also too high to afford it.
Using white-label software
The white-label crypto exchange software is the ready-made solution of the existing cryptocurrency exchange platform. It has all the functionalities of the existing cryptocurrency exchange. It can also be highly customized according to your business needs. By using the white label software you can build your crypto exchange platform within a week. Its cost is also low when compared with the other development methods. We the coinsclone are well versed in developing the crypto exchange platform using our effective white-label software to cover a large audience for your business.
Cost to Start a Crypto Exchange Business
The cost of developing a crypto exchange depends on the size and complexity of the project. Also, it depends on the number of features that need to be implemented, such as security measures, margin trading, crypto derivatives trading options, crypto wallet, trading engine, payment gateway integration, and more.
Moreover, the cost to start a crypto exchange also depends on the development method you pick, such as whether you want to develop an exchange from the base or use a cryptocurrency exchange script. If you choose to use a crypto exchange script, the cost of developing a crypto exchange will be around $7,000 – $14,000. However, the price of the script may vary depending on your outstanding business concepts and urgent needs.
Developing a crypto exchange from scratch can be expensive and time-consuming. In case you want to develop the exchange platform from scratch, the overall exchange development cost would be around $100,000 – $150,000.
Hope we have given sufficient information regarding your query – how to start a crypto exchange in 2023. Also, we have given a glimpse of the crypto exchange development cost. So, let us conclude this article with…
Why Choose Coinsclone to Start an Exchange?
Coinsclone is a well-established cryptocurrency exchange software development company in the crypto space. Being a leading crypto exchange development firm, we excel in providing all sorts of crypto exchange development services. Such as white-label crypto exchange, decentralized exchange script, and more. We have seasoned blockchain coders who have a lot of experience in developing and delivering exchange products. Our team of experts will guide you to build your crypto exchange website with ideal features and security modules.
You can leverage our ultra-modern crypto exchange script to launch your crypto trading platform within a few days at a moderate cost. Coinsclone also offers some exclusive crypto exchange clone scripts that are prevailing in the marketplace.
- Binance clone script
- Paxful clone script
- LocalBitcoins clone script
- Coinbase clone script
- Remitano clone script and more clone scripts
Quote your requirements and grab a free demo now!