Do you want to start a bitcoin exchange & trading business? If YES, here is a complete guide to starting a bitcoin exchange business with NO money and no experience. If you are interested in starting an internet based business, one of the viable and profitable businesses that you can start along that line is a bitcoin exchange and trading company.
A bitcoin exchange business is a site that facilitates exchange and trading bitcoins for fiat currencies or other digital currencies, and vice versa. Bitcoin exchange sites/companies also provide platforms for customers to store their bitcoins. Starting a bitcoin exchange and trading company can be rewarding but you would have to compete with other well established bitcoin exchange and trading companies on the World Wide Web.
The truth is that there are loads of standard and substandard bitcoin exchange and trading firms out there, all you need to do to make good profits is to make your own standout. The fact that you will be competing with people from all over the globe is enough reason for you to be result oriented and at the same time be creative with your bitcoin exchange and trading platform.
In order to attract bitcoin users, you should ensure that your bitcoin exchange and trading platform is user friendly and the payment portal is secured. It is also very important that you make the withdrawal process seamless for your clients (retail bitcoin traders). So, if you have done the required online or offline bitcoin exchange and trading courses, then you might want to venture into this business.
19 Steps to Starting a Bitcoin Exchange & Trading Business
1. Understand the Industry
Bitcoin is a type of digital currency that is created and held electronically; it is a cryptocurrency and a digital payment system that was invented by an unknown programmer, or perhaps a group of programmers. No one controls it. Unlike Dollars, Euros, Pounds and other currencies, bitcoins are not printed, they are produced by people and businesses running computers all around the world, using software that solves mathematical problems.
As a bitcoin exchange and trading company, your responsibility is to create a bitcoin exchange site that facilitates trading and exchanging bitcoins for fiat currencies or other digital currencies, and vice versa. Bitcoin exchange and trading companies sites also provide their clients with the service of storing your bitcoins.
The Bitcoin Exchange and Trading Services (cryptocurrency and a digital payment system) industry is indeed a large internet based industry and pretty much active in countries such as United States of America, United Kingdom, France, Italy, Nigeria, South Africa Japan, China, Germany, and Canada et al.
It worthy to note that bitcoin exchange and trading play a vital role in promoting the cryptocurrency by facilitating its use hence most bitcoin users perform their transactions through an exchange. Nevertheless, bitcoin is not yet in the mainstream means of payment.
As a matter of fact, only a very few percentage of the population of the world, mainly innovators, technology enthusiasts, and visionaries et al make use of bitcoins. Increasing the number of bitcoin users and payments would help overcome resistance to the cryptocurrency’s adoption.
Despite the fact that the bitcoin exchange and trading business is still a Green business, it will continue to blossom because more and more users will embrace the use of bitcoins in the nearest future. So, if you have an entrepreneurial mentality and you wish to join a massive technological revolution, you can build your own local Bitcoin exchange and trading company. The truth is that you can build a bitcoin exchange and trading website even if you are not too ICT savvy and have limited capital to invest in software development and infrastructure.
As a matter of fact, software packages are entering the market that will help you set up your Bitcoin exchange and trading platform. You can even get a fully branded, customized, and managed white-label service that offers you the ability to start your own local bitcoin exchange in about 45 days.
Over and above, starting a bitcoin exchange and trading business requires professionalism and a good grasp of how cryptocurrency and the digital payment system works on a global platform. Besides, you would need to get the required certifications and license and also meet the required standard for such business before you can be allowed to start a bitcoin exchange and trading business in the united states; internet based services that deals with payments is heavily regulated to guard against fraud and criminality.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of bitcoin exchange and trading companies is not restricted to people and organizations in your immediate community or state, but it cuts across people on the cyber space who are interested in bitcoin exchange and trading as a means of earning more money from all over the world. This is so because bitcoin is traded on the internet hence the leverage to work for people and organization all across the globe.
So, if you are looking towards defining the demographics for your bitcoin exchange and trading business, then you should make it all encompassing. It should include programmers, investors and internet – business oriented people and organization within and outside the United States.
3. Decide Which Niche to Concentrate On
Most bitcoin exchange and trading companies operate a general bitcoin exchange and trading business that involves every business activity or services that a standard bitcoin exchange and trading platform/company is expected to offer, that is why it seems like there are no niche areas in the industry.
But on the other hand, some bitcoin exchange and trading companies may decide to major in some key areas such as;
- Trading bitcoin on behalf of their clients (both corporate clients and individual clients)
- Buying and selling bitcoins to clients on the cyber space
- Wallet provider
- Bitcoin ATM operator
- Peer to Peer Lending
- Providing other related bitcoin, cryptocurrency and digital payment system consulting and advisory services
The Level of Competition in the Industry
When it comes to bitcoin exchange and trading, distance is never a barrier when competing for clients especially international clients. What most clients (individual and corporate clients) want is results, hence they are ready to make use of a bitcoin exchange and trading platform no matter the part of the world they operate from as long as they have good track record and can deliver excellent results when it comes to trading and exchanging bitcoins for them and increasing their income/investments.
There are several bitcoin exchange and trading companies scattered all around the United States and in the cyber space. So, if you choose to start your own bitcoin exchange and trading company in the United States, you will definitely meet stiff competitions not only amongst bitcoin exchange and trading companies in the United States, but all over the globe especially if you choose to specialize in cryptocurrency and a digital payment system.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by general public than others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they treat their clients.
These are some of the leading Bitcoin exchange and trading companies in the United States of America and also in the globe;
- Minute Bitcoin
- Bitcoin Suisse AG
- BCB ATM
As an aspiring entrepreneur who is looking for a business that requires less stress and perhaps minimal startup capital to start, you can consider starting a bitcoin exchange and trading business (please note that the risk in the business is high). The cost of running a standard bitcoin exchange and trading company when compared to the turnover you get can be poles apart (this is applicable when you have been able to establish your feet in the industry).
Entrepreneurs that venture into bitcoin exchange and trading business can as a matter of fact start the business from their home and still make headway in the business. One thing is certain when it comes to the bitcoin exchange and trading business and most internet based businesses, you are sure of making profit when you successfully produce results that are measurable for an organization or individual client
As a matter of fact, the cost of running the business process from start to finish could be restricted to the cost of making phone calls, transportation, internet subscriptions, PR and in some cases materials such as fliers and handbills et al. With that, it is easier to place a projection on the profits you are likely going to make if you are able to successfully secure a deal to handle bitcoin exchange and trading for a corporate client or individual client.
5. Decide Whether to Buy a Franchise or Start from Scratch
When it comes to starting a business of this nature, it will pay you to start from the scratch as against buying a franchise. First and foremost, before you can secure a business deal to trade bitcoin for corporate clients, your profile will be scrutinized even if you are operating the franchise of a successful bitcoin exchange and trading company brand.
Also, you can hardly find a franchise of a bitcoin exchange and trading company to purchase meaning that if you want to own a bitcoin exchange and trading business, then you must be ready to start from the scratch. This is so because the business is easy to start if you have the required expertise and it is still pretty much thriving and there are loads of opportunities available for aspiring entrepreneurs that are interested in the industry.
The truth is that it will pay you to start your bitcoin exchange and trading company from the scratch. Starting from the scratch will afford you the opportunity to conduct thorough market survey and feasibility studies before choosing a location to launch the business.
Please note that most of the big and successful bitcoin exchange and trading companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own bitcoin exchange and trading business today, one of the major challenges you are likely going to face is the presence of well – established bitcoin exchange and trading companies and also certified cryptocurrency and digital payment system operators who are offering same services that you intend offering. The only way to avoid this challenge is to create your own market.
Some other threats that you are likely going to face as a bitcoin exchange and trading company operating in the United States are unfavorable government policies and global economic downturn which usually affects purchasing/spending power. There is hardly anything you can do as regards these threats other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you have the option of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a bitcoin exchange and trading company. Ordinarily, general partnership should have been the ideal business structure for a small – scale bitcoin exchange and trading business especially if you are just starting out with a moderate start – up capital. But people prefer limited liability Company for obvious reasons.
As a matter of fact, if your intention is to grow the business and have clients both corporate and individual from all across the United States of America and other countries of the world, then choosing general partnership is not an option for you. Limited Liability Company, LLC will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your bitcoin exchange and trading business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities available for your bitcoin exchange and trading business, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
8. Choose a Catchy Business Name
If you are considering starting your own Bitcoin exchange and trading company, here are some catchy names that you can choose from;
- Lenard Jones Bitcoin Exchange and Trading, LLC
- X – Generation Bitcoin Exchange and Trading, LLP
- Excel Bitcoin Exchange and Trading Company, LLC
- Investment Solution Bitcoin Exchange and Trading Platform, Inc.
- Intel Payments Solutions Bitcoin Exchange and Trading, LLC
- Joint Deal Bitcoin Exchange and Trading, LLP
- John Capstone International Bitcoin Traders, LLC
- Jake Murphy Bitcoin Exchange and Trading Co.
- Jerry White® Bitcoin Exchange and Trading Platform, Inc.
- Eric Pearson Bitcoin Exchange and Trading, Inc.
- Cashton Bitcoin International Company
- Money Guaranteed Cryptocurrency and Digital Payment System Ltd.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is imperative to create a budget for insurance policy covers and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your bitcoin exchange and trading business.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own bitcoin exchange and trading business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own bitcoin exchange and trading business, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successful run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
11. Get the Necessary Professional Certification
Aside from the results you produce, professional certification is one of the main reasons why most bitcoin exchange and trading companies and freelance bitcoin traders stand out. If you want to make an impact in the bitcoin exchange industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career and up-to-date in this competitive market.
These are some of the certifications you can work towards achieving if you want to run your own bitcoin exchange and trading company;
- Certified Bitcoin Market Trader Program
- Certificate in Commodity and Currency Trading
- Certified Currency Trader
- CMT/pro Trader
Please note that you cannot successfully run a bitcoin exchange and trading company in the United States and in most countries of the world without acquiring the necessary professional certifications and business license even if you have adequate experience cum background in the bitcoin exchange and trading services industry.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own bitcoin exchange and trading business in the United States of America;
- Certificate of Incorporation
- Business License and Certification
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract documents
- Company Bylaws
- Memorandum of Understanding (MoU)
13. Raise the Needed Startup Capital
Aside from the bitcoins, cryptocurrencies and other forms of digital payment required to trade with, starting a bitcoin exchange and trading business can be cost effective if you choose to run the business from your home, share office space with a friend or make use of a virtual office. Securing a standard office is part of what will consume a large chunk of your start – up capital, but if you choose to start the business on a small scale, you may not have the need to go source for fund to finance the business.
When it comes to financing a business, one of the first things that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for start – up capital for your bitcoin exchange and trading business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
The fact that you can operate your bitcoin exchange and trading business from your home does not mean that locations have little influence on the success of a bitcoin exchange and trading company. If you have taken your time to study the bitcoin exchange and trading cum financial consulting industry, you will realize that financial consultancy agencies are willing to pay expensive rents in order to stay in a busy business district; a place where business activities and financial activities are at its peak.
It cannot be overemphasized that the location you chose to open your bitcoin exchange and trading business is key to the success of the business; hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and investment lifestyle.
If you make the mistake of renting or leasing a facility for your bitcoin exchange and trading business in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.
15. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technologies or equipment needed to run this type of business except for customized bitcoin exchange and trading software, social media management software applications and other forms of digital payment system related software apps. You will also need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves).
When it comes to choosing between renting and leasing an office space, the size of the bitcoin exchange and trading company you want to build, and your entire budget for the business should influence your choice. If you have enough capital to run a standard bitcoin exchange and trading company, then you should consider the option of leasing a facility for your office; when you lease, you will be able to work with long – term planning, structuring and expansion.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, you would need a Chief Executive Officer or President (you can occupy this role), an Admin and Human Resource Manager, Bitcoin Traders/Financial Consultants, Programmers and Software Developers, business Development Executive/marketing Executive, Customer Service Officer or Front Desk Officer and Accountant.
Over and above, you would need a minimum of 8 key staff to effectively run a medium scale but standard bitcoin exchange and trading company. Please note that there will be times when you are expected to go out of your way to hire experts to help you handle some high – profile internet based currency consultancy contracts especially from big corporations.
If you are just starting out you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you, which is why you should make plans to partner with other programmers and software app developers that operate as freelancers.
The Service Delivery Process of the Business
On the average, the way bitcoin exchange and trading companies work varies from one agency to another, but ideally, a bitcoin exchange and trading company is expected to first and foremost build a robust company profile before biding for bitcoin exchange and trading contracts from corporate organizations (major players in cyberspace who deal in bitcoins), it will give them an edge amongst their competitors.
Basically, most bitcoin traders get funds from investors who are interested in the cryptocurrency and digital payment system market, and they assist them in trading their bitcoin over a period of time as agreed by both parties. Despite the fact that trading bitcoin is highly risky, it is still a profitable venture hence there is an agreement between the bitcoin exchange and trading company and the client as it relates to the commission they are expected to make from the deal. Most bitcoin exchange and trading companies charge based on percentage/commission and also a fix consultancy/business administrative fee.
It is important to state that a bitcoin exchange and trading company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated business cum services process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
As a bitcoin exchange and trading company, you would have to prove your worth over and over again before you can be awarded any bitcoin exchange and trading contract from corporate clients. So, if you have plans to start your own bitcoin exchange and trading company, it will pay you to build first build a successful career in the bitcoin exchange and trading services industry.
People and organizations will hire your services to help them handle all their bitcoin exchange and trading needs if they know that they are going to get good returns on their investment. So, when you are drafting your marketing plans and strategies for your bitcoin exchange and trading company, make sure that you create a compelling personal and company profile.
Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to bitcoin exchange and trading services and the organizations you have worked for. This will help boost your chances in the market place when sourcing for bitcoin exchange and trading contracts.
As a matter of fact, your marketing strategy will center on reliability, swiftness, safety, pricing, secured payment platform, and above all excellent customer service. You should ensure that whenever your customers hire your services or make use of your facility, they will get excellent service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet, which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing efforts should be directed to internet users; your website should become your number one marketing tool.
Here are some of the platforms you can utilize to market your bitcoin exchange and trading services;
- Introduce your business by sending introductory letters alongside your brochure to all the programmers, investors, and internet – business people and organizations within and outside the United States
- Promptness in bidding for bitcoin exchange and trading contracts from corporate organizations
- Advertise your business in relevant financial magazines, radio and TV stations (make yourself available for bitcoin exchange, trading and cryptocurrency related talk shows and interactive sessions on TV and Radio)
- List your business on local directories/yellow pages
- Attend international bitcoin exchange, trading and cryptocurrency related seminars and business fairs
- Create different packages for different categories of clients in order to work with their budgets
- Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people would consider you an expert in the field)
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks
- Engage the services of marketing executives and business developers to carry out direct marketing
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you offer your bitcoin exchange and trading services at rock bottom prices is to purchase your bitcoins directly from the bitcoin miners in pretty large quantities and make use of effective maintenance schedules for your website.
Another strategy that will help you offer your bitcoin exchange and trading services at the right price is to ensure that you cut operational and maintenance cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products.
You can also try as much as possible to work with independent contractors and marketers; it will help you save cost of paying sales and marketing executives.
18. Develop Iron-clad Competitive Strategies to Help You Win
The bitcoin exchange and trading services industry is a competitive industry and you must come up with a unique and highly creative strategy to be able to outsmart your competitors in the industry. Part of what you need to do in order to stay competitive in the industry is to continue to make profits for your clients and exchange your bitcoin at highly competitive prices.
Organizations and people will always run to you if they know that you have a better option especially as it relates to producing results in trading and exchanging bitcoin for them. Another strategy that you can adopt is to ensure that your organization is well positioned; key members of your team are highly qualified and certified bitcoin traders and cryptocurrency consultants.
19. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a bitcoin exchange and trading company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
In promoting your brand and corporate identity, you should leverage on both the print and electronic media and also social media (the internet). As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and wide reaching.
Another strategy is to sponsor relevant community based programs, TV and radio programs, advertise your business in relevant magazines and newspapers. Below are the platforms you can leverage on to boost your brand and promote your business;
- Place adverts on financial magazines and related newspapers, radio and TV stations
- Encourage the use of word of mouth publicity from your loyal customers
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Badoo, Google+ and other platforms to promote your business
- Ensure that you position your banners and billboards in strategic positions all around your city
- Distribute your fliers and handbills in target areas in and around our neighborhood
- Contact programmers, investors, and internet – business oriented people and organization within and outside the United States by calling them up and informing them of your organization and the bitcoin exchange and trading services you offer
- Advertise your business in your official website and employ strategies that will help you pull traffic to the site
- Brand all your official cars and ensure that all your staff members and management staff wears your branded shirt or cap at regular intervals.