Running a financial services business in the DeFi market is a smart way to take advantage of the growing trends in the Bitcoin sector, the market boom and other blockchain phenomena.
However, the question is which business model suits you more and how you can make money like start your own crypto exchange or brokerage.
This article is sponsored content and does not reflect the opinion of the CryptoDnes team. The material does not constitute investment advice and is provided by the respective company.
Stay tuned to know the difference between these two models and the latest trends in each.
What are crypto exchanges?
Cryptocurrency exchange platforms are online marketplaces where virtual coins and assets are bought and sold. They accept virtual money as payment methods or a combination of crypto/fiat funds.
Customers use these platforms to exchange their crypto holdings for fiat money. For example selling Bitcoin for USD. Additionally, those who want to dip their toes into the decentralized world can invest their fiat money to acquire their first cryptocurrencies. This way you spend USD to get Bitcoin.
Crypto exchange operators make revenue by charging transaction fees for each transaction, which can be a flat fee or a percentage of the amount transferred.
These businesses are constantly under the scrutiny of regulators. The US Securities and Exchange Commission is trying to prosecute various exchange platforms for selling unregistered securities.
What are crypto brokers?
Cryptocurrency brokers are businesses that allow users to invest in rising values of virtual coins, functional tokens, NFTs, and other blockchain-based assets.
Traders usually use these platforms to earn from cryptocurrencies without holding them. Instead, they pursue financial gain by opening market positions in multiple crypto coins.
For example, Bitcoin proved its worth as the best crypto investment, growing in value from $400 in 2014 to $10,000 in 2009 and later to over $70 in 000.
Which business model to choose?
Deciding on the right way to earn cryptocurrency depends on many factors, such as the location of your service, local regulations for starting a crypto business and current market trends.
The creation of a DeFi exchange platform fits perfectly with the latest trends in real ownership of virtual coins, as users prefer more transparency and regulation. You can make money by charging a cut every time a user buys or sells on your platform.
On the other hand, crypto brokerage platforms require significant investment as there are many things to consider such as trading software, payment gateways, legal considerations, functionalities for investing in DeFi and other.
Final thoughts
Starting your crypto business is a great way to take advantage of the recent crypto market boom and coin growth. However, choosing between an exchange versus a brokerage is the real challenge.
Crypto brokerage firms are more comprehensive and require significant capital to operate, while coin exchange platforms perform a direct function of selling and buying cryptocurrencies in exchange for fiat money or other blockchain-based assets.
This article is sponsored content and does not reflect the opinion of the CryptoDnes team. The material does not constitute investment advice and is provided by the respective company.
Read More: Crypto Exchange Startup vs. Brokerage: Which is Better?
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