Bitcoin Forum

i just did a simple calculation, about 35k bitcoins are traded on GDAX every day. At its current price of $6900 and a trading fee of 0.3%, the exchange puts about $700,000 in its pocket EACH DAY and it is ONLY for bitcoin. After including all other cryptos, this number can go up to more than $2MM. Since the exchange is active 365 days a year, the exchange's annual revenue can reach almost $1bn!!

Well that is how exchanges live and survive and earn money. But not all exchanges have a high success rate. Exchanges spend  huge of amount promoting their website and have paid a number of people to be known and to gather more clients. Without clients exchange will bound to fail. I remember the exchange live.megacrypton, it disappeared from the web since only a few users are trading.

Aside from the huge income, the exchanges also make sure that all coins in their site is moving and so they create transaction flows which sometimes are risky and cause them to loss a significant amount of btc.

right mate,you have got the right impression on how the crypto moves in every exchanges not just bitcoin but as what OP said other altcoins also..we must consider how they need to popularized their platform anit cost advertisers too,for them to gain another set of investors and clients .this is not all about incomes theres an opposite side of gaining and thats the overhead expenses,and the people on their backs to push them to mainstream..yeah thats right that they have earning good bucks but not that huge as what OPs thinking

Don't forget that exchanges are surely spending big money on website development, taxes, employees, miscellaneous fees, web security, all those stuff. Especially the security aspect. An exchange can easily easily go bankrupt or at least lose a huge sum of money with a single successful hack. Take a look at what happened to Mt.Gox and Bitfinex in the past. Security is not something they should just "meh, lets just spend a few thousand bucks on this". But it's true though, they do make a lot of money. But they also definitely spend a lot of money. It's definitely unnerving being a constant target for hackers.

they do make a lot , like really a lot but there is some expenses of course also the legal stuffs require money
but even after expenses they make a lot of money , still we don't see a single exchange with good support system so basically they are making tons of money and not giving a damn when their customers need them  :(

Well, Coinbase made $1 billion in revenue in 2017.  :o

>>>Source : https://www.investopedia.com/news/coinbase-made-over-1b-revenue-last-year-report/

Coinbase has more brokerage accounts, over 13 million, than the trading giant Charles Schwab.  :o

Kraken, reportedly added around 50,000 new users in a day at the end of 2017. The volume handled by these exchanges are

enormous. Now, you can see why these exchanges are adding more and more Alt coins to their service.  ::)

I cannae wait for some robust and simple decentralised exchanges to pop up. People are rushing headlong into enabling cartels once again and they're growing in power and influence by the day.

Exchanges now can make or break most coins. That's not how it should be.

the exchange makes a lot of money, but it does not have enough staff to answer the support tickets, the exchange has a lot of money but there is no phone number and no legal accessor, the exchange has a lot of money but there are no physical offices and licenses. becomes a very worrying situation of how it is possible that someone who owns an exchange that makes huge profits has no desire to have a physical office, telephone number and staff enough to provide quality support services.

I would like someone one day to create a thread with details of how many staff each exchange has to know what exchange we have to use and what exchange we have to avoid.

Yes, cryptocurrency exchanges earn a lot everyday especially those exchanges that have a huge volume of trades, 0.3% trading fee is a small amount for a single trader but if there are lots of people who use their platform and sum all of it, it is sure a huge amount of money, but I agree on what other say here, they also spend a lot of money (for better system security, advertisements, pay their employees, etc) to make a competitive services and for people to choose or trust them with their money. And of course exchanges are still business so they will always find a way to make more money.

That looks like a very fascinating number. Nut certainly they have their own expenses aswell. Anyways, they make a hefty margin on transactions and thats a fact. To have this going smoothly, allot of machinery and manpower goes into it. Also, more and more exchanges are coming up and taking a stake in the market. This figure suits a big exchange point but the story may not be same for every exchange.

Also they need to look into taxes and all the legality of running such a business in the country. Its allot of work, and what they make out of it is well worth it. Because 0.3% seems to be extreamly less and this has been possible only because of their expertise and work.

Still they aren't able to implement a proper support system, let alone proper servers which can handle the traffic. I don't know where they are putting all this money they are earning. Cause it sure isn't on improving the platform and serving their customers better.

The money goes straight in their pocket. They can afford to piss off a minority. They know the majority will continue to pile in. This is what happens when choice isn't diverse enough.

It needs to get past the growing pains and gold rush stages and only then will they concentrate on serving customers properly. Right now the mania covers a multitude of sins.

So if you think that is too easy then go and start and crypto exchange and earn money as one or $2B per year. :D

It is not eary right you need to see the work behind all those exchange and they also have expenses and only few exchanges can earn these kind of earnings in future many competitors will come into the field so they also have to upgrade to withstand the new rivals.

Yes they earn much money.
But they also have very big responsibilities to hold people's money billions dollars.
I think they deserve it.

Many significant crypto exchanges (such as Bitfinex) are operating in foreign countries and serving US customers illegally or otherwise acting in a shady manner.

When you don't have a lot of options except for suspicious exchanges, you search for the exchanges which are just shady and not clearly scams.  And you make a judgement on whether or not they're scams very quickly, because you're probably a newbie whose mate told him that Bitcoin was going to make him rich over the next week, so you don't care if 0.3% or so is sliced off your BTC stash.

IMHO big fees on crypto exchanges will go lower in the nearest future. Big algotrading companies can't play this games with such fees. They can give great volume to exchanges. So waiting for big players and lower fees.

With the amount of work which goes into keeping these exchanges up and running for people to be able to trade their coins and get money I think they deserve every penny they are getting. They have employees they have to pay and maintaining a site that has millions of users and millions of visitors everyday is no easy feat and they should earn what they are earning for their work.

HA! you think they would pull out such business to collect pennies and dimes? noooo, they think big and earn big lol

This explains why these exchanges are really powerful as they are the ones who provide platforms for trading. I always wanted to start an exchange of our own but the competition is really intense.

exchanges like Coinbase are always going to exist and be necessary since they are working with fiat and fiat requires a centralized place such as these exchanges.

additionally decentralized exchanges are not yet offering same options as centralized counterparts and sometimes are even slower too. which is why they are not yet that popular.

Some exchanges are gaining high money..Yes it is true..
But do not just look at the money they earn..This job has great challenges and risks.

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Yes they earn a great amount of money from the trading which people do on their platform I research on some exchanges that they earn 15$ for every bitcoin traded on their exchange and most of the exchanges here have a trading volume in millions so they are earning huge.

FALSE.

Most exchanges are earning huge amounts of money from LISTINGS, binance is asking for more than $500,000 for a single listing. Kucoin, more than $100,000. And Bittrex.. Pff, i do not even want to talk about it.

But yes, Binance is earning more than 3 million dollars a day, i dont remember where i saw a chart about this.

It's a business and every business have to make profit,  so you know how much a bank make on hourly bases just by charging us transaction fee and sending 0s and 1s from one person to another?  You have to check all this before looking at the fee an exchange made,  this money is also used to maintain their website in other to make it free from hack,  exchange gets major attack.

Wow, thanks for the calculations, actually I never thought about that and it's actually impressive, I didn't have a clue the are making so much money!

You are right to say crypto exchanges make big money, especially the big ones. But the operation costs are high as well. For example, the exchanges have to employ experts to secure the website, wallets and crypto currencies stored in the exchanges. There are other costs such as advertising.

yeah that was a big pot of money, and thats why they call it Hyper Investment and it was so rough to get it in and earn that so much
need a more patience to investing in that thing and a lot of calm with emotion

Interesting calculation and good income at the stock exchange. With the development of bitcoin, these figures will only grow. Imagine how many exchanges will be earned in a few years, and if bitcoin costs $ 50,000.

The exchanges are making a huge amount of profit without a doubt and since it is a global platform without any limitations, the opportunity is huge and many are taking advantage of it and i do not think that the exchanges will create fake volumes to keep the flow moving and if anyone does those things, they are just inviting trouble, if you start faking things, you will never succeed with your project.

Well, even if we're not doing the math here, everyone knows how crazy it is. But, "With great power comes big responsibility". Exchanges may not earn as huge profit as that if there are a lot of issues in your business. Consistency, Response, and Stability these things must be present in a certain exchange.

It isn't that surprising that exchanges make decent money and will continue to make more as the general public become aware of cryptocurrencies.  The amount they bring in will only increase with popularity.  Even small exchanges are making nice amounts.

This is quite interesting and we should learn from it. We should be doing business as per the current demand in the society and this can bring lot of profit in comparison to traditional businesses.

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you are thinking in us dollar not social support,

this is actually what also drives down the bitcoin price systematically because the exchanges have communal roots, so they "sell" their coins for communal currencies.

additionally there are more and more exchanges comming up

Yes true, they make so much in my opinion too. But i usually rationalize it based on the fact that 1. Exchanges have to maintain liquidity on all digital asset listed 2. I learnt that the amount of money needed to keep the exchange secured from unwarranted attacks is substantial 3. Since 4th quarter of 2017, the amount of crypto traders have increased tremendously to the point that exchanges that must survive the surge must higher more personnel, most of the time tipple the number of personnel they had before. So i think these charges cover for these as well, and of course we everyone is in business to make money.

Ever heard of Binance? ;) the guy behind it became a billionaire in 7 months! https://www.forbes.com/sites/pamelaambler/2018/02/07/changpeng-zhao-binance-exchange-crypto-cryptocurrency/#68a20d051eee

no matter how the trusted exchange earn, it keeps that they must pay for the whole system manager, security, partners, maintenance and others.
im sure with this transparent transaction, the exchange didn't really get as we expected. also the security is the most vulnerable issue of exchange, keep it is not as simple as we think. keep the security is like keeping their the partners

Considering all of the unseen costs is something very few people do but I feel that it's still safe to say that exchanges are making ludicrous amounts of money. Right now there is still so much potential for competition in terms of service that competition on fees isn't that major. Once software etc improves further to a stage where there can be little improvements then for newcomers to compete they'll only be able to offer lower fees.

I am sure it is not so good as it looks. Behind those money there a lots of taxes wich have to be paid and I am talking of more than 50%.They have to spend lots of money for paying their employees. Such a big exchanger wich was thousands of customers daily needs dozens of employees to make sure that everything goes as planned.

They have to spend money of security because that id one of the most important thing. If they website is hacked by someone they could lose everything and I am sure they have the best people to make sure that is not going to happen.

Lets dont forget about paying taxes to government because that is absolutely inevitable when so much money are passing through their company. I dont know where their company is created but they surely pay some pretty big taxes anywhere they would be.

They also have to spend money for promotion wich is also important even if they already are number 1 exchanger.There are a lot of other things that should be taken in consideration because the profit that you calculated is way to enormous

Of course it's crazy, but nobody is preventing others to open their own exchanges, to gain the necessary reputation and to parecipate to this rich market. Of course, you need to have the know-how to do something like that.

it is not a crazy thing, with the amount of exchange that much I think it's fair because bitcoin users more and more years. with so much more exchange giving ease to all bitcoin users.

amazing, bitcoin has a large volume in the GDAX exchanges, I think GDAX is a big market. not a bad option to trade.

but high bitcoin volumes in GDAX will not be able to withstand bitcoin and other coins from bad market conditions.

This is very surprising and yes the crazy too because this calculation is far away from my expectations that how can a exchange earns such a lot from a single cryptocurrency naming bitcoin, though BTC is very successful and sustainable cryptocurrency but still an exchange earning such a huge amount in a year is really surprising.

yeah i already know about this since long ago.
exchange gain so many profit from daily trading with little effort.
thats why i agree if goverment taxes exchange just like japan goberment,instead taxes bitcoin holder.

Irrespective of the expenses that has to be taken care of, CRAZY is quite acceptable and in order to qualify the amount that bitcoin exchange earn. It seems unbelievable in most cases, but the most interesting part is that is is REAL.

I don't think they are crazy at all they were meant to be a place where you can get comfortable with your marketing skills and in exchange of all this the site owner or I can say the exchange owner will get a commission from each of your actions. No matter what you do even if you are practicing with your money then also this item is going to earn money from your actions. Trading works and table to everything so that you can choose their exchange for all of your transactions. On the other hand is quite natural if you can gather like 100000 uses and you can say all of them to put 100 satoshis that you are going to get a lot of money.

they never go bankrupt, when you run the money thats the savest and most profitable business of the society, as it is its power centre, just look at the worlds established financial centres, wallstreet manhattan, london, frankfurt

they never suffer from risks, they always stay rich and those that own property there always stay wealthy. as countless people try to move there to offer those their goods and services.

its a great thing that cryptoeconomics decentralises their power and their position, it will spread wealth all over the world make it more decentral and most importantly create a more save and stable basis for all those that are participating in the other sectors of the economy

regards

Bitcoin is still in the basic phase of development and hence there are no geographical boundaries. On the other hand, there are tremendous opportunities with low competition at the moment. Exchanges are providing the opportunity not only to buy and sell crypto but also to trade in multiple cryptocurrency pairs and for every trade exchanges levy a little fee. It's the business of high volume and low fees on a global scale.

Those figures are without a doubt very high for normal people like us, but for a business like that it's to be expected that they get those kind of profits, I have always thought that the fastest way to make money is to go directly where the money is and there is no business that gets closer to that than banking and exchanges, have you seen how powerful are the banks? This is one of the reasons of why satoshi created bitcoin, and while we do not have bitcoin banks we have exchanges which are becoming big enough that by themselves they can alter the price if they want.

very good calculation. even if bitcoin is trading at $ 20,000, could reach more than 1 billion, but with note bitcoin sales in every other market should be stable.

the percentage of profits with high volume makes GDAX must retain service to all GDAX exchange users, otherwise, it will be like MT.GOX.

if you look at the bigger exchange like binance, you can more shocked.
in binance, the average daily volume for bitcoin transactions is about $200mil-$300mil.
if the fee 0.1%, it has $200k income per day. Just only from bitcoin transactions!  :o :o

Bitcoin is a investment wherein its market value in the whole world changes every second,  minute and hour. Through this it can obtained a income or loss in just a sinhle moment.
Yes it is crazy because no one knows when the company eill earn income or loss.

yeah when it decentralized and transparent in any kind of isses we can seeing it circulation ofcourse, i think is normal when we are seeing some thing like that, because right now bitcoin is an economic macro

This is a business. Every business should be profitable, if you know how many banks make an hourly basis simply by collecting transaction fees and sending from 0 to 1 from one person to another. You should check all this before looking at the exchange fees made, this money is also used to maintain their website in other to make it free from hack and exchange gets market attack from its investors. 8)

Yeah its really crazy that only exchanges are earning good , that's why with just very short period of time , so many exchanges popped up .

it is just a fact. big exchanges is earning much profit by trading volume.
more volume = more fees. no wonder they can reward expensive cars in many events.
this is showing us that many peoples already using cryptocurrency for trading.

yeah that's why Zhao Changpeng just need 7 months to become billionaire from almost noting haha
I suppose you wanna do same?
sadly it is't easy and many troubles will come from authority and hackers too.

A large sum of money from the trades people make on their platforms. Some of the exchanges they get are about $ 15 for every bitcoin traded on their stock and most of the exchanges here have trade volumes up to millions so they earn a great income. 8)

remember, sometimes hackers can stole money from it, so it is not easy business, safety is most important thing in it, so u have to pay a big price for the good security

All those money and they can even invest some on their support system? Most of the exchanges have the shittiest support system you will ever see. Just employing few more staffs to handle their customer support won't actually hurt them, but nope they won't do that.
Anyways, they do earn a lot, but they also spend a lot to cover their expenditures like upgrading their system, security and what not.

Exchanges are truly making huge money from transaction charges. The scenario painted by the poster stands and by the time they remove all the running cost incured, you will find out that they still have much left. Besides, they don't answer to government that much, like banks or other financial/payment outfit whose activities are checked from time to time in order to protect customers. So many people's cryptocurrency have been stucked on various exchanges for months and yet unresolved, which means that the exchanges can also sit on some people's money for ever.

I think that number is bigger and harder to imagine. This shows that trading volumes from bitfinex, bittrex, binance can be up to hundreds of millions of transaction fees a day. The volatility of the explosion, this number also increased.

Maybe they can't hold it forever but the process to retrieve the money back could be very long term and painful too. It's true that they are obliged with different rules and laws but still some of them are doing their business on the edge of the law so this may have some bad consequences for users.
But let's be honest, cryptocurrency users are those who enable huge profit to exchanges, they just use this business opportunity.

This is why crypto busines such as exchange is a serious business and you can make your fortune from almost nothing just like Changpeng Zhao.
Yeah I admire his intelligence and business mindset and how he did well for a very short period of time. His life is now decided and he can just sit everywhere he wants while making big bucks everyday. Making your own exchange isn't so easy and the hardship starts from the beginning.

this is surprising, indeed these exchangers are making hell of money as transfer charge on a daily basis. even when bitcoin price is down, they don't reduce the charges. 

This your calculation makes its kind of so straight forward but in the real sense, its not as straight forward what you consider is only the revenue which might not even be up to that before the need to start factoring cost which can eat into that revenue really fast. Before the payment of staff who have to be on rotation to work 24hours due to the nature of the clients they service all around the world, the amount they have to incur to ensure that the site available at every time, what of the cost of security, wallet maintenance, hosting, licences, legal fees based on retainership, heavy equipments, database management and other ancillary costs. Its more than what we imagine.

It does seem crazy especially when you compare oh a first year tier 1 exchange to a bank that has been in operation for over 145 years time. Look no further than Binance vs Deutsche Bank. https://www.ccn.com/binance-surpassed-germanys-biggest-bank-deutsche-in-profitability/

Why did you look GDAX ? Look another bigger exchange like binance. You will surprised more!
cryptocurrency has a very big volume in the market to trade now. The big exchanges will have a very very good incomes because the market growth.

True, crypto exchange makes big money, but operating costs are also high eg the bursa should hire experts to secure websites, purses and crypto currencies stored on the exchange. There are also other costs such as advertising. 8)

the 0.3% fee is a standard and normal fee for any exchanger out there. the number of benefits they do need to keep the exchanger safe, running well and certainly not just die. but the profit figure you count is a gross profit. an exchanger needs to pay for website development, website security, employees they own, etc. so yes this is a business, while there are many demand and people need, there will be a group of people who take advantage of it.

They have expenses as well like for staff and servers. Also, do not ignore the chances of a possible hack and the money they have to spend to protect against it.

It is a medium to improve the platform or service their customers better and here you can earn through exchanges have a trading volume in millions. For a novice it is not easy to know the exchanges which are just shady and not clearly scams.

Just shows nobody is going to run a exchange for nothing however to become a trusted exchange they have to put the work in.

I do not really think how much is gained from the bigger exchange, because as long as the exchange is safe and the fee of each transaction is still reasonable I think it is appropriate for them to get.

This is the truth, Only few exchanges are truly successful and other are actually running on loss considering the amount they invest on Advertising and paid for influencers to attract more people. and yes, while some are like that, some are making a fortune out of that.


WOW, this is remarkable, There are it's befits by being one of the first and most secured wallets which offers trading platform too.

We are so excited about cryptocurrency but it's exchangers that makes me angry mostly. The transaction fees is too high especially when someone want to withdraw in btc. Some take as much as 100000 satoshi as withdrawal charge.

Yes, exchanges are generating a huge revenue but on the other hand, they also have the expenses in that proportion to run their routine operations. On the other hand, they also have to bear the risk of price volatility in the case of crypto to fiat transactions so, considering the list of expenses, I don't see anything wrong in their business model.

those statistics indeed very crazy because for those who involved in crypto exchange business probably they're already became an rich people but i think not all exchange have high profit such as that even not popular exchange have to closed their service because lack of costumers moreover currently the competition between exchange to other exchange will be very tight and build exchange with trustable reputation is not an easy

They also have to pay taxes on it, pay high salaries to the developers, spend big money on advertisements and also insure their exchanges in case of a hack. After all this there is only mediocre return that the exchanges make, but yeah if they function properly for few years than they can earn big bucks by then.

The exchanges deserve to earn much money from trading activities since they provide a platform for trading. Cryptocurrency exchanges are integral part of  the world of cryptocurrency,  exchange sites play a crucial role in  the successful functioning of the various assets or tokens used. Hence I think it is really cool if they earn much money from their hard work

Yes exchange have a huge earning from people who are using their website to trade ,
But they are also using that money to improve their website or to keep their website trustworthy,
They need money to keep their transaction smooth and to upgrade their system and security from time to time to keep their clients safe. 

Bitcoin exchange earnings are now compared to 150 years old Bank called deutsche bank and binance profits are same

I also thought about that. It makes me want to gather all my IT friends and make an exchange with lowest posible gas/transaction fees, haha. Or at least an app, but we are lacking of connections, dedications, and resources. Also most of them were not into crypto so it's burried plan.

Yes, the percentage that takes the stock exchange is simply predatory! I hope the new OAX exchange breaks this tradition)

Nothing can get in the way of others to open their own exchanges and this should be able to get the reputation it needs to participate in such a pass. Of course you can have the knowledge to be able to do such a thing later. 8)

Believe it or not but Binance makes more profit than Deutsche Bank

People are just insatiable. They should be helped to learn. :'(

Crypto Exchanges now are more profitable than banks  ;D

Bit of a necrobump, but thought I'd contribute this. Binance are currently making over $1m per day in transaction fees. However lot of the money from an exchange (any that offer referrals) is actually handed back out to the exchange users via referral schemes. Still, they probably end up with at least 50% of the number that you described. It's a wonder how these exchanges ever go bankrupt, or even when they get hacked they should easily be able to refund their customers out of the millions they've made.

Good analysis from the OP. I thought I was the only one thinking same thing. No wonder several exchanges are emerging day after day. That is why I marvel each time I hear of big exchange hacking. I think these exchanges are buoyant enough to be able to secure the platform.

Not crazy trading volumetric Binance is much higher

The more people are interested in the cryptocurrency market, the volume of trading will increase day by day, I am not surprised.

I do not assume they're loopy in any respect they had been supposed to be an area where you may get cozy with your advertising talents and in change of all this the web site proprietor or i'm able to say the trade proprietor will get a commission from every of your movements. regardless of what you do even in case you are training together with your money then also this object is going to earn cash from your movements. trading works and desk to the whole thing so you can pick their trade for all of your transactions. however is pretty herbal if you could gather like a hundred thousand makes use of and you may say all of them to position 100 satoshis that you're going to get a lot of cash.