5 Steps to Start a Bitcoin Business Exchange in 2023

by James · February 22, 2023

Since its release, Bitcoin has developed so much that companies now base their activities exclusively on this cryptocurrency. And this should not be surprising as the demand for this coin has increased and we expect it to be accepted worldwide in the future. Of course, this has also contributed to the development of the coin, so you should check the bitcoin price today, as it is a good time to invest.

Regardless, Bitcoin is an excellent tool because it can boost your business. For example, business exchanges have increased recently as large companies began to accept bitcoin as a payment of choice. The only challenge here may be that Bitcoin is still not fully regulated and not all countries legally accept bitcoin transactions. But if you want to start a Bitcoin exchange business, here are the steps you should follow.

Table of Contents

Legal advice

As discussed, the only problem with Bitcoin is the need for more regulations and legal requirements. In some countries, such as El Salvador, Bitcoin has already become a legal tender, but the project needs to be clarified for the local population since their economy is already on the decline. The Central African Republic also approached Bitcoin as an official legal tender, but has frozen the deal until further notice.

With these in mind, you need to plan your Bitcoin business exchange thoroughly, because if you set it in a developing country where resources are scarce and people need time to get used to the technology, the proposition may fail. Therefore, it is necessary to get legal advice and ensure that all licensing requirements are met because a financial advisor will provide real tips and guidance on your business plan.

For your Bitcoin exchange to work properly, you must be licensed as a Money Transmitter business, follow SEC and CFTC rules, and comply with KYC (Know Your Customer) regulations, at least in the US.

Get financing

This step may be the easiest because, as a new business with high demand, you may be able to get funding quickly enough to cover all your expenses. To start your Bitcoin exchange business, you may need around $135,000 just for the development and launch stages. Having a good financial plan for the future is also necessary because this is the only way you will meet the demands of the market.

As a startup, you need access to capital to allow a proper runway. So be careful to get licensing only from genuine crypto exchange providers. Otherwise, you will be charged ongoing fees and they will not mention the legal obligations and cost requirements to maintain your business.

You can get funds through the following:

You can garner investor interest in your venture by offering unique digital assets;
Initial Coin Offering (ICO). If you offer an ICO, you may be able to raise significant amounts of funding;
Accelerator program. Such a project provides you with the necessary resources to develop your business prototype;
Angel investors. If your project is interesting enough, angel investors can help you with financing and additional assistance;

Establish all technological aspects

The next steps include finding a technology solutions provider and partnering with a payment processor. A technology solutions provider is essential for audit purposes, as regulators will inspect the entire source code at some point. At the same time, the payment processor you choose will make the difference between a stable business and a failed one. That’s because many different models provide different fee structures, and to be competitive you need the smallest transaction rates.

Finally, don’t forget to implement security best practices, as this will help you avoid data breaches and other malware. The options of offline cold storage, two-factor authentication and encrypted databases form the security base your Bitcoin business exchange must provide.

Beta testing

Finally, it’s time to go live via beta testing. Launching the project will ensure that your business has completed the most important steps to get closer to becoming a trusted organization for investors. However, you are not done with the tasks yet. The next step is to start your marketing and PR campaign to get more coverage and get as many people as possible to use your Bitcoin exchange. You can look at what your competitors are doing and use a similar approach, but make it more personal and align with your company’s goals.

The beta testing step is crucial to ensure your service is in a functional state. It also helps in analyzing potential gaps in the system as the users participating in this process include your target audience, which should be helpful for you to get an idea of the performance of your final product.

Provide customer support

You need to consider your customers more and provide customer support services. This is the essential step in your customer retention process because it allows them to get help when needed, which keeps them using your exchange platform. Of course, this means expanding your team or choosing a software product, but if you lack customer support services, your customers will leave as soon as they encounter a problem.

But if you really don’t have the funds or resources, you can at least create a dedicated page with questions and answers to the most basic problems people may encounter. You can also add more along the way if you see a problem persisting.

Other methods also work to support your customers on their Bitcoin investment journey, such as setting up a compliant hotline, monitoring customer interactions, or having a self-service procedure. In any case, it is best to have a friendly approach and understand that not all clients specialize in this domain and they need a chance to learn more about investing for a better financial life.

Ends

Starting a Bitcoin business exchange can be challenging. Nevertheless, since we are in 2023, the technology has advanced and more countries are adopting Bitcoin, your business should be welcomed and you will get the funding you need quite quickly. In terms of legal implications, Bitcoin will soon become one of the first globally accepted coins, so don’t worry about your business flopping.