INDUSTRY SPOTLIGHT

Crypto Exchange

Step into the high-stakes world of crypto exchange. Seize untapped opportunities and build robust strategies to attract the necessary crypto exchange funding, overcome hurdles, and outpace rivals while riding a wave to decentralized prosperity.

Innovate with crypto today, excel in the new economy tomorrow

Integration of blockchain technology, high-frequency trading algorithms, and secure wallets, coupled with an increasing interest in DeFi and NFT, is driving the growth of the crypto exchange industry, making it a new frontier of digital finance (with 600+ apps available). The sector offers abundant opportunities for startups—DeFi products, staking and yield farming, NFT marketplaces, and mobile applications and wallets—yet harbors numerous challenges.

Gaining a foothold becomes challenging

Be ready to tame the Wild West. Yes, regulations like MiCA, KYC, and AML are in place, yet the crypto exchange industry is still far from being properly regulated. And the recent lawsuit against Binance starkly highlights this.

Plus, watch out for potential security pitfalls. The crypto exchange sector has become a hotspot for cyberattacks, with hackers keen on exploiting any weak points they can find. The data strikes: in 2022 alone, security breaches resulted in a staggering $1.1B loss. Thus…

An idea alone isn’t enough to succeed

With a track record of exceptional service in fundraising, crafting robust market-entry blueprints and financial models, and driving the growth of 600+ startups across 80+ industries, including the crypto exchange sector, at Waveup, we know how to transform your idea into a viable business. Dip your toes in this burgeoning industry by checking our crypto exchange market research.

9x growth
The crypto exchange market is expected to grow nine times, hitting a staggering $337.1B by 2032.

 

$100M
Is the average daily trading volume on crypto exchanges.

5x

The total value locked in DeFi is over $51B, having increased five times since 2020.

15K

Companies globally accept cryptocurrency as payment.

40%

Increase of the NFT trading volume in 2023.

VENTURE LANDSCAPE

In 2022, the crypto exchange venture capital reached $1.70B

Key verticals: 

  • Exchange Platforms
  • DeFi
  • NFT
  • Wallets & Custody Solutions

Leading crypto exchange venture capital firms

Write to us to know more

WAVEUP VIEW

Challenges crypto exchanges face

Navigating the crypto exchange landscape presents multifaceted challenges, from regulatory hurdles to security complexities.

Complying riddle

Despite the implementation of MiCA regulations, KYC, and AML requirements, the crypto exchange industry is still compared to the Wild West. The fluid nature of the legal landscape leads to uncertainty and judicial repercussions, as happened to Binance this year. In June 2023, the SEC sued Binance for channeling customer funds to a Zhao-controlled firm to exaggerate trade volumes, lying about its anti-market manipulation safeguards, and illegally operating a securities exchange in the US. The company pleads guilty, accusing regulators of not providing clear guidelines. Yet, it has already lost some customers and partners. Coinbase and Kraken have withdrawn their support, while Visa and Mastercard–stopped processing payments. Thus, developing robust compliance programs and adopting comprehensive KYC and AML regulations are vital for crypto exchange startups.

Safety Vanguard

Always keep a watchful eye on your crypto exchange project’s security. As sly cyber foxes are looking to exploit any chink in the armor. It’s no surprise that crypto exchanges hold a significant value, being a tidbit for hackers. A case on the radar: In March 2022, Ronin, an Ethereum blockchain sidechain fueling the famed play-to-earn game Axie Infinity, fell prey to a cyberattack, having lost over $600M in assets. And of course, Ronin isn’t alone in this scenario: BitMart suffered a $200M blow in December 2021, followed by Nomad and Wormhole waving goodbye to $190M and $300M in 2022 correspondingly, highlighting a grim trend in the sector.

Taming the market

Market volatility strikes hard. The crypto exchange market witnessed another tumultuous phase in the 2022′ crypto winter,’ leaving investors shell-shocked. The collapse of FTX, a high-profile crypto exchange, has led to scrutinized SEC checks, becoming one of the reasons for almost a 90% drop in crypto funding compared to 2021. However, compliance with the SEC regulations contradicts the decentralized nature of the whole concept, taking ‘crypto’ out of ‘cryptocurrency.’ Overall, the rapid shifts between bull and bear markets, notably seen in 2021 when Bitcoin’s price was swinging between $29K and $64K within a few months, pose a stiff challenge for crypto exchange startups attempting to gain a foothold in this wildly fluctuating landscape.

How we can help

Startups
Fundraising advisory

From diligent industry analysis to storytelling and financial forecasts, we’re helping founders crystallize and structure key business fundamentals and translate them into a compelling investment opportunity framed in a winning crypto exchange pitch deck.

Investors
Due diligence and portfolio support

Evaluating potential investments, conducting due diligence, and supporting portfolio companies on their new fundraising rounds.

Established companies
Growth hacking

Discovering market opportunities in the market and developing execution strategies to build actionable and scalable blueprints for growth.

WHO WE ARE

Unlocking your next stage of growth

Waveup is a leading global advisory empowering companies to fuel growth, attract investments, and secure strategic partnerships.

We turn data into business insights that drive results, helping companies excel in the competitive B2C and B2B spaces across 50+ verticals, discovering and catalizing opportunities for growth.

Our investment consulting services for crypto exchange startups

Market intelligence

Fundraising support

Pitch decks

Financial models

Investor research

Growth consulting

Go-to-market strategies

Marketing/sales materials

Design support

Learn more

FAQ

What makes the industry appealing for crypto exchange financing opportunities?

High growth potential (a 9X growth is projected by 2032), large user base (over 1B), high-margin business model, and global reach make the crypto exchange industry lucrative for potential investors.

What is the current size of the crypto exchange market, and its potential for future crypto exchange startups?

The crypto exchange market is projected to hit a whopping $337.1B by 2032 compared to 2023 $37.1B. Owing to increasing cryptocurrency adoption, tokenization, DeFi integration, and a surge in innovation, the sector is brimming with various opportunities for startups to capitalize on.

How challenging is it to secure funding for crypto exchange startups nowadays?

Recent events such as a lawsuit against Binance, a 2022 crypto winter, and a 90% plummet in crypto funding have made it more challenging to secure funds in the crypto exchange sector nowadays.

How long does it take to create a crypto exchange pitch deck and a financial model for a crypto exchange startup?

Creating all the documentation typically requires two to three weeks. However, the exact duration may vary depending on the project complexity and the workload of our expert team.

What are the key mistakes crypto exchange startups make in their pitch decks?

Many crypto exchange pitch decks miss essential data to showcase a robust market potential and a clear answer to the ‘Why now?’ question. Another common mistake is the absence of a cohesive and persuasive investment story. Plus, not mentioning competitors doesn’t give the VCs a clear comprehension of how a startup is going to stand out.

What are the main challenges crypto exchange startups face, and how are they tackling them?

The crypto exchange industry is a fertile ground for both opportunities and challenges. Volatility, security, and regulatory concerns, along with fundraising issues, are the main challenges startups may face. Many companies work closely with legal experts, invest in robust security measures, implement risk management, and craft effective funding strategies.

How competitive is the crypto exchange market?

With over 1K crypto exchanges in operation that offer similar services and products, the crypto exchange industry is fiercely competitive. Moreover, the top dogs, such as Binance, Coinbase, and Kraken, account for almost 60% of the global market, leaving only 40% for the rest of the companies.

What services do you provide for investors who are either considering or have already invested in crypto exchange startups?

We help investors evaluate crypto exchange investment opportunities by conducting in-depth research and presenting valuable insights in a clear, visual format. Plus, we offer comprehensive fundraising services to crypto exchange and related companies in our portfolio.

Do you provide crypto exchange M&A support?

Absolutely! We provide support for your M&A objectives, whether within the crypto exchange field or other sectors. Our services encompass everything from the initial deal search and valuations to due diligence and collaboration after the deal is completed.

Do you make intros to crypto exchange VCs?

Of course! We specialize in connecting you with crypto exchange venture capitalists who align with your project’s needs. After a detailed evaluation of factors such as round size, team composition, and product, we provide guidance on fostering fruitful collaborations with investors, from the initial deal discussions to long-term partnerships.

Do you provide comprehensive crypto exchange market research on request?

Certainly! We offer customized market intelligence services for the crypto exchange industry, including comprehensive industry reports, competitor assessments, and extensive market research. Our strategic approach provides you with a substantial advantage. Leveraging data from reliable sources, we ensure you obtain a deep understanding of the crypto exchange landscape, encompassing its intricacies, market scope, and competitive dynamics.

Which crypto exchange startup funding stages do you assist with?

Our experts offer growth and fundraising assistance to crypto exchange startups at every stage of their journey, from the Pre-Seed stage all the way through to Series C and beyond.

Start your growth journey with us

Stepping into the crypto exchange landscape? We know the way. From end-to-end fundraising support to outsourced M&A guidance and growth blueprinting, Waveup will help you accelerate your journey to success. Drop us your email, and let's talk!

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