So, you’ve been a foreign exchange (FX) dealer for the past few years, but the game has lost its sparkle.
Currency fluctuations just ain’t what they used to be. Currencies just sit there for months on end doing absolutely nothing. How’s a broker supposed to make an honest living?
But, fear not! What about turning your broker skills towards a new market with daily fluctuations like a Disneyland roller coaster? Try your hand at broking cryptocurrencies! Yes, Bitcoins, Ethereum, and some many other individual cryptocurrency units are the new kids on the block. And the market is wide open for inter-deal broking. Fees are certainly dropping, but the volume of transactions is rising at an incredible rate.
While the number of new cryptocurrency deal launches approach one thousand in number, it is the seasoned currencies like Bitcoin, Ethereum, Ripple, Litecoin and Monero that have potential futures. In fact, many of the new cryptocurrency new issues are immediately transferred into these more established units, or into fiat currencies like the US Dollar, British Pound or Euro.
Establishing your own cryptocurrency brokerage is not necessarily that difficult to do. One of the newly-established cryptocurrency exchanges adopts you as an intermarket broker who takes physical delivery of specific amounts of cryptocurrency. The exchange finds a counterparty who want to buy that number of units, do the trade and pocket the commission. Just like in the old FX days!
Initially, the challenge will be to have enough buyers and sellers to match. However, that’s also not an insurmountable problem as established exchanges such as Poloniex or Coinbase, with whom you are linked via electronic interface, will provide you with another buyer or seller automatically. You take the commission from the side that you brought to the deal, and the exchange takes their cut for the party they supplied. Naturally, the optimal trade will be to take commission from both sides, which you will be able to do eventually as you build up your own customer base.
Standard commission rates range from 5 to 25 basis points per trade, so a transaction of 100,000 USD will provide from 50 to 250 USD commission. Some exchanges can also provide new brokers with a market-making robot that they can use within the established exchanges themselves. You put up the cash to trade against the retail traders on the exchange which can bring increased revenue to your broking operation.
Cryptocurrency trading is less than ten years’ old, and the field is wide open for those with the correct skills to make a profitable income on the market. FX brokers are ideally suited to this type of work, and with their expert knowledge of the trading and broking business, they are likely to capitalize on this market very quickly indeed. Once they have their heads around the new technology and methodology such as blockchain and currency mining, then brokering this field is likely to be the next growth industry in the cryptocurrency market.
Please read more about Cryptocurrency license Estonia