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Could cryptocurrency exchanges be the next big thing to invest in crypto?

Published Nov 02, 2021 08:00AM ET
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The fascination with cryptocurrency has grown exponentially over the past decade or so as investors flock to the innovative projects’ tokens, meme tokens, and NFTs. However, one specific area has only recently captured the investors’ eye despite being one of the most crucial links to the crypto ecosystem - exchanges.

This April, Coinbase (NASDAQ:COIN) became the first cryptocurrency exchange to launch its stock to the public, under the ticker, $COIN. With the Kraken exchange now also planning an initial public offering (IPO) on NASDAQ, investors now have a direct investment channel to invest in crypto exchanges. Not only can you invest in crypto exchanges but now you can easily create and run your own crypto exchange that is accessible, open, and cheap for all using open source platforms such as HollaEx.

The advantages of running your exchange
Apart from the trading fees generated for the crypto exchange as volumes increase, running your exchange gives extra benefits, to the exchange itself and the community around it.

Similar to stock exchanges and brokerages, crypto exchanges offer traders intermediary services and liquidity that allows traders to buy, sell, and trade assets seamlessly. Nonetheless, traditional finance exchanges are geographically and regulatory bound while crypto exchanges are more flexible providing services globally.

As volumes and profits rise across the exchange ecosystem, new innovations and utilities have been introduced to the field. These innovations have given crypto exchanges an upper hand in their dealing over their traditional partners. For instance, crypto exchanges such as Binance and OKEx have built launchpads to help projects raise capital through special public sales, commonly referred to as initial exchange offerings (IEOs). The public sale is similar to initial coin offerings (ICOs) but involves the exchange listing the project’s token on its launchpad for trading rather than directly offering it to the public.

IEOs has since birthed IDOs, or initial DEX offering, which entails launching the token on a decentralized exchange. Despite its advantages and gaining massive support from the DeFi community, launching an IDO raises its own challenges such as low participation from the community and a lack of control in the coin’s branding. IEOs excel well in these areas - check the performance of tokens launched on the Binance launchpad!

Building your exchange to enjoy the above would be quite a hassle hence the introduction of easy-to-use software systems such as HollaEx.

How to build your crypto and digital asset exchange
Launched in 2020, HollaEx is an open-source exchange network platform that empowers creators, businesses, developers, liquidity providers, and traders to participate in a digital marketplace by creating their own exchange. The platform provides users an easy-to-use software toolkit, HollaEx Kit, allowing them to run crypto and digital asset exchanges. The dev team provides a white-label software service that allows users to build and host their exchange or opt-in to quick to deploy cloud exchange plans.

“Aspiring businesses who aim to establish their own crypto exchanges only need to provide their domain names, logos, list of coins, and to focus on the management and operations of the exchange,” said Simon Gegen, a HollaEx core contributor.

As investors continue to try their hand at cryptocurrencies, solutions such as HollaEx still show there is much room for smart people to invest in crypto infrastructure. Besides the money made from transaction fees, exchanges offer a wide range of advantages to the crypto ecosystem via new innovations and features.

Final thoughts
In a universe increasingly being built in the metaverse, exchanges have (and will) played an important role in the financial system. In the future, billions of users will need on-ramps to access their favorite tokens, digital assets, non-fungible tokens, and access any decentralized service they wish through exchanges.

Inventors ought to take a closer look at crypto exchanges as an investment option, Simon added, whether it’s an already established exchange, or launching your own exchange with open-source crypto exchange software and other white-label providers such as HollaEX, Argo SE, or Exclusive Change Capital.’

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Could cryptocurrency exchanges be the next big thing to invest in crypto?

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