Why is now the time to start a crypto exchange? World markets are in turmoil.

Part 1 - Market Overview

The crypto market, despite what you might have heard, is booming.

The current bear cycle is due to global macroeconomics - caused primarily by institutional and bot traders, and bandwagoned by retail investors.

It’s that last demographic that matters.

Regardless of price action - adoption is rising. 300 million people (0.4% of the global population) have exposure to the market, and that number is growing.

Despite this, there are just 600 cryptocurrency exchanges in the world right now - profiting from volatility, not price action. Every deposit, withdrawal, trade, loan, and liquidation makes them money.

An exchange with about 5000 users trading 1000USD per month has a max potential monthly revenue of $5M. Accounting for inefficiencies, that number comes down to about $1.6M… Still a hefty sum.

So why are there so few exchanges? Two reasons:

Inability to develop a robust, secure, and scalable platform

Insufficient capital to maintain liquidity

These two things are giving incumbents the market edge.

Part 2 - Recipe for Success

Let’s suppose a marketing team acquired a fully functioning exchange. Their technical and capital needs are met - how do they market it?

Let’s put you in the shoes of this imaginary marketing team.

Your first priorities would be:

Branding

USP

Brand Image

Market Positioning

Growth strategies

Social Engagement

Content Marketing

Community Management

Affiliate Marketing

Gamification

Data Management

Part 3 - Branding

What makes your exchange special? Identifying this results in effective branding. Latch onto your USP. Speed is key - in the rapidly evolving industry, copycats appear fast - affiliation with a feature, slogan, mascot, or ideology cements your place in the field.

Remember, only 0.4% of the world’s population trades crypto - engaging the other 99.6% presents opportunity and challenge. Their lack of trust is equal parts due to understanding of the pitfalls, and misunderstanding of the benefits of exposure to this market. If you’re trying to acquire new users, your branding and promotion needs to bridge this gap by making cryptocurrency feel accessible.

This will inform your market positioning. The veterans of the industry have found theirs. It’s important not to overstep your bounds, lest you ruffle the wrong feathers and wind up in direct competition with an incumbent giant. Uniqueness is the key to success.

Part 4 - Growth

Once your house is in order, you can invite people in. Growing a cryptocurrency exchange requires careful reconsideration of marketing strategy. This industry has grown fast and developed a subculture - it’s vital to adopt the lingo, but not at the expense of untapped markets, who may not be privy to industry terms.

Social engagement, therefore - includes equal parts technical and layman’s terms. It’s far easier to convert somebody than to convince a current user to adopt your product. Focus on fresh users when developing your strategy, copy, and design.

Similar principles apply to content marketing. In cryptocurrency, there’s a ‘content problem’ - The majority of users have no idea how it works, and the ones that don’t have even less of a clue. The solution is education, and it works wonders for marketing.

Binance is a great example of content marketing. They’ve invested in product documentation & blockchain-specific educational resources. This has become an invaluable funnel for user acquisition because they’re owning simple questions - positioning themselves as an authority, and keeping their brand top of mind.

Once your early marketing takes hold, you’ll have a user-base. This is your most precious marketing resource, because there’s nothing like word of mouth. There are two ways to leverage this - community management, and affiliate marketing.

Building a community has an interesting benefit: free technical support. Gather users of varying expertise and they’ll organize themselves into two groups - experts, and laymen - sharing information amongst themselves.

This spills into affiliate marketing, where you reward experts for their work by offering in-app bonuses for recruitment. This reinforces their sense of community and positions them as leaders.

Another popular affiliate marketing method among top exchanges - Copy Trading. This allows new users to copy experts’ trades. It’s a genius acquisition strategy, as it drastically lowers the barrier to entry to your platform.

Gamification can be implemented in two ways: influencing users’ actions with a bonus mode, and by simplifying the trading experience to be more fun.

Bonus modes allocate tasks to users based on your short-term objectives, funneling them towards certain features in exchange for small rewards. Gamification in the true sense, simplifies your product and encourages competition. In the industry, this is called ‘bull vs bear’, a trading mode that pits users against each other in winner takes all contracts.

The culmination of all of this is the data you gather - Trading history, UX patterns, and anomalies in usage can be used to inform your strategy internally, or be sold to external parties as market insights.

Part 5 - TinyTrader

Now, we know what it takes to make a trading platform successful. We’ve learned:

That the market is young, volatile, and set for growth.

That the incumbent exchanges are benefitting from this.

The barriers to entry, as well as the features that make up a competitive exchange.

How to market it.

Let’s put you in the shoes of our imaginary marketing team.

The only thing between you and that average of 1.6 million dollars a month is a robust, secure, and scalable platform, with all the features we talked about.

If you haven’t guessed by now, here’s your chance:

TinyTrader is a white-label crypto exchange company.

The fabled product we’ve been talking about? It exists, and it’s more accessible than ever.

In just 7 days, and 8 tiny steps, you can be running your own exchange, with all the features we just mentioned - and now you know how to grow yours. Stop playing the market, and start owning it.

If you’d like to learn more, click here to book a session with TinyTrader’s blockchain consultants today, and take your first tiny steps towards the future.