What is white label exchange software and should you launch your own crypto exchange?

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Cryptocurrencies are no longer a mysterious, intangible digital asset with an uncertain future. It’s been more than a decade since the first cryptocurrency — Bitcoin — was introduced. Although digital currencies didn’t exactly make paper money obsolete, they have penetrated daily life and established themselves as a viable payment method. 

Today, there are nearly 3,000 different coins one can acquire. You can buy all kinds of products and services with crypto, and even gamble with it! 

As more and more people embraced cryptocurrencies, their value grew exponentially. Upon its initial release in 2009, Bitcoin was worth less than a penny. Today, one BTC is worth somewhere around $7,700.

This dramatic increase in value garnered the attention of experts, traders, companies, and even individuals. People began mining, buying, and trading all manner of cryptocurrencies in hopes that this trend will continue and they’ll be able to profit from it. 

Most cryptocurrencies are volatile, meaning that their value can greatly differ from one day to the next. Simply hoarding these digital coins has turned out to be a risk not many are willing to take. 

Rather than simply buying and holding cryptocurrencies, traders now seek to make a profit by buying them at low prices and selling them when their value is at its peak. 

As you can imagine, trying to find people to buy or sell coins manually would be difficult, tiresome, and extremely time-consuming. Instead, trading happens on platforms called crypto exchanges. 

What are crypto exchanges? 

Cryptocurrency exchanges are digital platforms where users can trade their digital assets with a single click of a button. Depending on the specific exchange, traders can exchange their coins for different cryptocurrencies, or even for Fiat currencies like Euros. 

These platforms typically come with a variety of trading tools and useful features. They allow traders to monitor the movement of cryptocurrencies on the market and leverage accurate, relevant data to make smart trades, rather than simply relying on their gut feeling. 

There are three types of crypto exchanges:

1. Trading platforms

2. Direct trading

3. Brokers 

Trading platforms are typically websites that connect buyers and sellers across the globe. They feature the market prices of each digital asset available on the platform and make a profit by applying a small fee to each transaction.

Direct trading exchanges give traders the freedom to set their own exchange rates. This can be quite beneficial for day traders who are looking to snatch great deals whenever someone’s selling or buying crypto at a favorable price. 

Brokers allow people to buy digital coins at a preset price. They hold a variety of different cryptocurrencies and alt-coins and are a fast, hassle-free way to obtain the coins of your choosing. 

What is white label exchange software? 

White label exchange software presents a great opportunity to get your foot in the door of this billion-dollar industry, without the inherent risk of trading. It is a pre-built cryptocurrency exchange that leaves room for rebranding and customization. 

In other words, if you opt for a white label exchange software, you get a complete software solution, with all the tools, features, and functionalities of a modern crypto exchange, that you can sell under your own brand. 

Essentially, you get to launch your cryptocurrency exchange in just a few hours, without ever having to worry about any of the technical stuff such as: 

• Coding

• Feature development

• Testing  

• Customer support

Now, you might be wondering why someone would offer you a complete solution that you can resell at a profit. The reason is quite simple — the company can focus on software development without having to worry about marketing the products to the end-users. Instead, they can redirect their time, money, and efforts into developing other software. 

Resellers, however, don’t have to bother with any of the technical stuff. They can simply focus on what they do best — promoting and selling the crypto exchange to their audience. In the end, both the company that developed the white label crypto exchange software and the reseller can generate a decent profit. 

Features to look for in a white label exchange software

If you’re interested in reselling cryptocurrency exchanges, keep in mind that not all platforms are created equal. There are hundreds of crypto exchanges out there, but most of the trading takes place on several exchanges. 

The ones with the highest daily volume are: 

• Binance

• Hotbit

• Coinsbit

Why is that? How come two-thirds of daily cryptocurrency trading happens on these three exchanges?

It’s most likely due to their reputation and functionality. Everyone wants to trade on a platform that has a decent amount of users. Traders will also always opt for an exchange that provides more features and valuable tools that make trading easier. 

When browsing through different white label exchange software, it’s crucial to pay attention to what it offers to the users. The best way to gain a competitive advantage and stand out in the sea of cryptocurrency exchanges is to offer higher functionality than other platforms. 

Let’s go over some of the most important features your exchange should offer:

1. Variety

2. Price movement and history chart

3. Spot trading

4. Margin trading

5. Fiat-to-crypto-trading

6. Marketing solutions

Variety 

Most people outside of the cryptocurrency world equate crypto with Bitcoin. Although it’s the forefather of blockchain technology and arguably the most widely known cryptocurrency by the general public, Bitcoin is far from being the only cryptocurrency traders are interested in.

A variety of other coins also have substantial trading volumes, some even higher than Bitcoin. To get as many people as possible to trade on your exchange, it’s crucial to provide them with a variety of coins to choose from. 

Apart from Bitcoin, some of the most popular cryptocurrencies among traders are: 

1. Ethereum

2. Ripple

3. Litecoin

4. Bitcoin Cash 

5. XRP

6. EOS

7. Binance Coin

When deciding which white label exchange software to go for, the first thing to look at is which cryptocurrencies the platform supports. This information is critical for most trades and will likely be the deciding factor between them creating an account on your exchange or looking elsewhere. 

Remember, you’re not looking for a white label Bitcoin exchange software, but a cryptocurrency exchange that supports dozens of different coins.

Price movement and history chart

The success of a crypto trader hedges on their ability to correctly predict the future prices of individual coins, and trade accordingly. The price movement and history chart facilitates those predictions by showing how a coin’s price fluctuates over time. 

The chart should depict the coin’s price movement history, starting from the last 15 minutes and going back to at least a month. 

Spot trading

For a day trader, timing is everything. They are constantly on the lookout for the best deals, and when they find one, they need to act immediately. Spot trading is a feature that allows them to place and close orders in real-time without any delay. It also enables traders to place large amounts of orders in an instant. 

What’s important here is to ensure that the spot trading feature is reliable and works without any glitches. That’s why it’s always best to always request a demo and test out the software yourself prior to committing to a purchase. 

Margin trading

Margin trading, also known as leverage trading, is one of the newer features exchanges started implementing that’s proving to be a hit among traders. It enables traders to expand their market positions by borrowing money to acquire cryptocurrency. 

This is an opportunity for you to earn extra revenue while giving traders on your platform a chance to increase their profit.

The method is called margin trading because the traders are required to put down an initial investment that’s a percentage of the total order value — called the margin. For example, if someone were to buy $200 worth of Bitcoin, with the leverage of 5:1, they would have to invest $40 of their own money. They would lend the rest from you, in hopes of making enough money in the future to earn a profit and pay you back, including the fees. 

Here are a few examples of different margins, according to different leverage and order total:

If the trader from the example above isn’t successful, and the value of Bitcoin starts dropping to the point where they would start losing your money, you would “call-in” their margin. In other words, they would forfeit the $40 investment, and you would close the trade.

Essentially, margin trading represents a gamble on the trader’s part. Regardless if they “win” or “lose” the gamble, you’ll still end up with a decent profit. 

Fiat-to-crypto trading

Another extremely useful feature you should look for is fiat-to-crypto trading. Whenever a new trader wants to enter the world of cryptocurrency, they first need to exchange Fiat currency (Dollars, Euros, Pounds) into digital assets. Why not enable them to do so on your platform? 

Marketing solutions

Some white label companies offer comprehensive solutions that include bundles of marketing materials. This can be anything from templates for an email marketing campaign, to blog posts you can leverage to nurture the relationship with your audience, or even mining programs you can recommend alongside the platform. 

Having marketing assets and materials provided will save you a lot of time and will facilitate the promotion of your crypto exchange. 

Always pay attention to everything that’s included with the white label exchange software to ensure you know exactly what you’re getting for your money, before you make the final decision.

What traders will look for before joining your exchange 

Apart from innate features a platform has, there are other aspects you can customize, that traders will be interested in: 

Reputation 

As you start marketing your exchange, prompt satisfied customers to provide positive reviews. Monitor the performance of your exchange to ensure everything is running smoothly, and there are no glitches that might hinder the trades. Before opting for a particular white label exchange software, check to see if the developers have included advanced security features to ensure the traders’ assets are well-protected.  

Fees 

Most exchanges make money by applying small fees on each transaction on their platform. When you’re just starting out, it’s always best to research what fees other exchanges are applying and entice traders by charging a bit less. Transparency is key here, so make sure to clearly display this information on your website.

Exchange rates 

It’s not uncommon for different platforms to have different exchange rates. In fact, rates can fluctuate up to 10%, meaning a trader who is willing to browse different exchanges can save a lot of money. This is another way to draw in customers — simply offer better exchange rates than the competition.

Verification process 

Most reputable exchanges have a verification process in place that traders must go through when depositing or withdrawing funds. This process can sometimes last a few days, making traders lose a window of opportunity. Although it’s important to have one in place to safeguard your exchange against scams and security breaches, there’s no reason to make the verification process unnecessarily complex. 

Payment methods 

It’s important for your exchange to support a variety of payment methods. If it’s only limited to, say, Visa or wire transfer, you’re automatically losing a big portion of your customers. You can bet that they’d rather look for an exchange that supports their preferred payment method, rather than go through the trouble of opening a new bank account and transferring funds. Make sure your exchange supports at least a dozen different payment options — you want to make payments on your platform as convenient as possible. 

The pros and cons of white label exchange software

Please note that buying white label exchange software isn’t for everyone. Although it may be an excellent opportunity to create a passive, recurring revenue stream, successfully running a crypto exchange comes with it’s set of challenges. 

You must be aware of all the advantages and drawbacks of a white label crypto exchange solution, before deciding whether you should undertake this endeavor. Let’s take a look at the pros and cons of while label exchange software, so you can make the right decision. 

Advantages

The main reason to opt for a white label solution is, of course, the speed of deployment. Since the software solution is already built by a professional development company, all you need to do is customize it to reflect your brand, and you’re good to go. 

Although research can take quite a bit of time, once you find a white label exchange software you like, you can set up your exchange literally the same day. That’s one of the most appealing aspects of white labeling in general. You invest in a ready-made product, rebrand it as you see fit, and stand to gain a sizable profit.

Another major advantage of this approach is that you don’t require any programming knowledge. The software will already be fully functional and tested, so you won’t have to worry about the technical aspects. With that out of the way, you can focus on promoting the exchange and acquiring new customers.

Despite spending money to purchase the white label solution, you’ll simultaneously cut down on labor expenses. Just think about how much money it would cost to hire a team of professional developers to create a crypto exchange you envisioned. The process would also take months, whereas you can launch a white label exchange almost instantly.

With millions of dollars circulating the crypto exchanges, this white label solution has the potential to generate an immense return on your investment. Of course, the results will mostly depend on your marketing skills and the ability to draw in traders, but the fact stands that this is an extremely lucrative niche. 

Disadvantages

One of the considerations when deliberating whether to purchase a white label exchange software is the necessary up-front capital. The prices can range anywhere from $5,000 to $50,000, depending on the functionality of the platform and the level of customization it offers. 

On top of that, most white label exchanges will come with an annual or a monthly license subscription, which is an additional expense. You’ll have to get off your feet rather quickly and ensure you have a steady stream of traders active on your platform, or you might risk losing money. 

Another thing to pay attention to is whether the vendor provides support or not. If you run into any technical issues with your exchange and fail to immediately address them, the reputation of your business will tank. It’s nearly impossible to recover from such a blow, so it’s best to look for solutions that come with long-term support from the developer. The problem, however, is that these white label solutions are extremely difficult to come by. 

We’ve already stressed the importance of research, and how vital it is to ensure that the solution you choose has all the necessary features, provides the required trading tools, and employs the best safety protocols. You will have to spend quite a bit of time comparing different solutions and weighing your options. 

To help you get started and show you what to look for, here’s a list of the most popular white label crypto exchange solutions: 

1. Coinsquare

2. Shift Markets

3. Prolitus

4. IWando

5. BlockEx

Should you leverage white label solutions to start your business?

Now that you know what launching a white label crypto exchange entails, you should be able to answer this question yourself. Keep in mind that you are launching a business, so although all the technical work is done by the vendor, you’ll still have to invest time, money, and energy into it, to reap the benefits. 

If you’re still on the fence, here’s a quick summary of the pros and cons of white label exchange software solutions: 

If launching a cryptocurrency exchange doesn’t seem like a good fit for you, there are plenty of other white label alternatives you might want to explore. 

We offer entrepreneurs and resellers an opportunity to choose between a variety of highly-customizable software solutions. If you’re looking for a hassle-free way to start your business by leveraging top-end white label software, Sell Saas is the perfect place to start!