How Crypto Exchange Make Money?

Cryptocurrency is a virtual currency bought, sold, and traded against different forms of crypto currencies or fiat currencies at crypto exchanges. Crypto exchanges provide these services to crypto traders at associated costs, and nearly every transaction in a crypto exchange generates revenue. Crypto exchanges are essentially businesses, and they are extremely profitable. The top crypto exchanges globally are earning billions of dollars a day.

Crypto Trading

Whenever there is any buying or selling at a crypto exchange, a percentage of the value of that particular transaction goes to the business. This is a fee that the exchange charges the buyer and the seller for utilizing the trading avenue provided by the deal. Such a transaction can only occur at a crypto exchange, given the special technological platforms required for crypto trade. Even though the amount per transaction may be small, it adds up to huge numbers given the massive trading volumes at crypto exchanges.

Crypto Currency Withdrawal Fees 

Traders who have accounts in crypto exchanges often need to withdraw their digital currency to proceed with transactions, similar to how customers of conventional banks withdraw money. The amount may be removed from the crypto exchange in cryptocurrency or fiat currency based on the trader’s requirements. Crypto exchanges generally charge a fixed amount against every single withdrawal transaction, a constant specific to that particular exchange based on the services they provide. This charge is usually the same for every withdrawal transaction, regardless of the withdrawn amount. This fee contributes heavily to the earnings by crypto exchanges since every trader starts their cryptocurrency from the business for further usage.

Crypto Currency Interest Revenue

Like traditional banks offer loans to their account holders and charge interest against the loan, which goes into the bank’s funds, crypto exchanges also offer loans to their account holders for digital transactions and charge interest against the provided loan.

Crypto Loyalty Programs

An increasing number of large businesses today, such as airlines, restaurants, retail stores, and shopping outlets, offer loyalty points to their customers. These loyalty programs make up a large portion of their overall business. The loyalty points across different companies can often trading crm be merged and used collectively or interchangeably to provide larger amounts for the receiving customer to utilize. Recently, to provide more flexibility so that loyalty points can be used more easily and for a longer period, organizations are offering loyalty points in crypto coins. These crypto coins can be used by the customers, similar to the usage of cash currency. With every new organization opting for such a crypto-based affiliate program, there is a subsequent increase in crypto trade, which inevitably channels through crypto exchanges, thus increasing their commerce and adding to their earnings.

Given that all cryptocurrency traders operate through crypto exchanges since it is impossible to execute transactions in the crypto world via conventional financial institutions such as banks, stock markets, or firms, crypto exchanges have become a very lucrative business that is exponentially on the rise. Moreover, the crypto referral program is another reason for its fame.

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