Part 1 – Introduction
TinyTrader, a provider of white-label cryptocurrency derivatives exchanges, outlines how to market a crypto exchange in its latest research article. Available through their mailing list, the document provides insight on the state of the market, opportunities, pitfalls, and trending strategies to dominate this burgeoning industry.
Their advice is predicated on ownership of a robust, secure, and scalable platform – in other words, their product. They direct readers through consumer segmentation, brand positioning, essential features, as well as guidelines for communication.
They explain why this is pertinent, even in a bearish market.
Part 2 – Market Overview
The crypto market, despite recent controversy, is booming.
The current bear cycle is due to global macroeconomics – caused primarily by institutional and bot traders, and bolstered by retail investors.
It’s that last demographic that matters.
Regardless of price action – adoption is rising. 300 million people (0.4% of the global population) own cryptocurrency, and that number is growing.
Despite this, there are just 600 exchanges in the world right now – profiting from volatility, not price action. Every deposit, withdrawal, trade, loan, and liquidation makes them money.
An exchange with 5000 users trading 1000USD per month has a max potential monthly revenue of $5M. Netted, that number comes down to about $1.6M… Still a hefty sum.
There are two reasons for this paltry number of exchanges:
Inability to develop a robust, secure, and scalable platform
Insufficient capital to maintain liquidity
These two things are giving incumbents the market edge, making it crucial for challengers to be considerate of:
TinyTrader’s strategies have been used to great effect by their clients, who have become market leaders. CoinW currently ranks #55 on the worlds top exchanges by trading volume. Here, we outline some of their advice:
Part 3 – Branding
What makes an exchange special? Identifying this results in effective branding – tied to its USP. Speed is key – in the rapidly evolving industry, copycats appear fast – affiliation with a feature, slogan, mascot, or ideology cements its place in the field.
Remember, only 0.4% of the world’s population trades crypto – engaging the other 99.6% presents opportunity and challenge. Their lack of trust is equal parts due to understanding of the pitfalls, and misunderstanding of the benefits of exposure to this market. When trying to acquire new users, branding and promotion need to make cryptocurrency feel accessible.
This will inform market positioning. The veterans of the industry have found theirs. It’s important not to overstep bounds, for fear of ruffling the wrong feathers and winding up in direct competition with an incumbent giant. Uniqueness is the key to success.
Part 4 – Growth
Growing a cryptocurrency exchange cryptocurrency exchange requires careful reconsideration of marketing strategy. This industry has grown fast and developed a subculture – it’s vital to adopt the lingo, but not at the expense of untapped markets, who may not be privy to industry terms.
Social engagement, therefore – includes equal parts technical and layman’s terms. It’s far easier to convert somebody than to convince a current user to adopt their product. Focus on fresh users when developing their strategy, copy and design.
Similar principles apply to content marketing. In cryptocurrency, there’s a ‘content problem’ – The majority of users have no idea how it works, and the ones that don’t have even less of a clue. The solution is education.
Binance is a great example of content marketing. They’ve invested in product documentation & educational resources. This has become an invaluable funnel for user acquisition because they’re owning simple questions – positioning themselves as an authority, and keeping their brand top of mind.
Once early marketing takes hold, so too will a user-base. This is the most precious marketing resource, and there are two ways to leverage this – community management, and affiliate marketing.
Building a community has an interesting benefit: free technical support. Gather users of varying expertise and they’ll organise themselves into two groups – experts, and laymen – sharing information amongst themselves.
This spills into affiliate marketing, rewarding experts for their work by offering in-app bonuses for recruitment. This reinforces their sense of community and positions them as leaders.
Another popular affiliate marketing method among top exchanges – Copy Trading. This allows new users to copy experts’ trades. It’s a genius acquisition strategy, as it drastically lowers the barrier to entry to their platform.
Gamification can be implemented in two ways: influencing users’ actions with a bonus mode, and by simplifying the trading experience to be more fun.
Bonus modes allocate tasks to users based on their short-term objectives, funneling them towards certain features in exchange for small rewards. Gamification simplifies their product and encourages compeititon – for example: ‘bull vs bear’, a futures trading mode that pits users against each other in fixed, winner takes all contracts.
The culmination of all of this is the data gathered – Trading history, UX patterns, and anomalies in usage can be used to inform strategy internally, or be sold to external parties as market insights.
Part 5 – TinyTrader
To know what it takes to make a trading platform successful, it’s crucial to understand:
That the market is young, volatile, and set for growth.
That the incumbent exchanges are benefitting from this.
The barriers to entry, as well as the features that make up a competitive exchange.
How to market it.
TinyTrader has vast experience in the field of launching and growing blockchain products.
This article is a condensed version of their new report:
‘Tiny Steps to Success – How to Market a Cryptocurrency exchange
Their platform makes it simple to start a robust, secure, and scalable crypto futures exchange – and their research provides detailed guides through marketing and growth strategies.
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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Michigan Journal USA journalist was involved in the writing and production of this article.