The scope for trading in cryptocurrencies has strengthened in India because of immigrants, finances, and government policies favoring the trade-in 2020. During the COVID-19 crisis, a significant amount of remittances have bolstered Indian finances but high transaction fees have given opportunities to the cryptocurrencies to simplify cross border-trading and instant settlements. That said, bitcoin trading platforms have seen a significant rise lately with a few of the exchanges witnessing a 545.56% rise this year. With newly registered users sky-rocketing for undertaking trading, the need for the crypto-broking franchise in India is likely to rise and it could incentivize whosoever wants to end up as the crypto broking franchise. That brings us to question who is a crypto-broking franchise?
A crypto-broking franchise or a sub-broker could be an individual or financial institution/company acting as franchise businesses that are authorized by the main trading broker or whales to perform bitcoin trading on their exchange on behalf of their customers and earn commission out of it. They are essential in bringing liquidity to the exchange and in doing so, they make trading efficient, profitable, and recurring always.
Why is the Need to Introduce Franchise Broker in Crypto-currency Exchange?
Optimum Liquidity
What would you say to a scenario when there are 3 good shops at a significant distance from one another but customers are choosing stuff from just one shop? It could be good, bad, or worse based on the price the shop charges, but you can do the evaluation only when you can compare and distribute the resources equally with other shops in the vicinity. That’s what the crypto-broking franchises do in India. The crypto-currency broker franchise registers with multiple exchanges and they analyze the prices via demand and supply and fix prices accordingly. So, the volatility of the market is getting mitigated by their presence.
Low Slippage and Optimum Spread Fees
Most investors and traders think that those exchanges with low value will give them more incentive to bring liquidity to the exchange, but the reality is the opposite. A low liquidity exchange means higher slippage and spread fees. With the crypto-broking franchise business, the ability to analyze the market and figure out in which exchange traders can get maximum liquidity gets simplified. In the process, they can distribute the buy-sell orders enabling lower slippage and rational spread fees to increase the profitability of the traders.
Better Pair Trading
A crypto broker franchise can broaden the reach of trading in multiple digital assets; thereby, broadening the scope of the investment portfolio. With most of the exchanges, the absence of trading in multiple pairs increases the slippage charges and higher fees in the form of spread. Cryptocurrency franchise broker add-in the liquidity to the exchange on their own, diversifying the investment portfolio of the traders. Hence, along with lower slippage and spread fees, the traders are also able to get a diversified portfolio of investment that they can invest in with the help of the crypto-broking franchise in India. Most of the bitcoin trading platforms have collaborated with cryptocurrency broking franchises to facilitate liquidity, benefits, and high returns for long term sustainability of the exchange.
What is the Benefit of the Crypto-broking Franchise?
The crypto-broking franchise often acts as the market-maker and for their role of bringing liquidity they have to pay very little transaction fees. The difference in the transaction fees or also known as the maker-taker fee gap is the incentivize that they get while acting as a crypto-broking franchise. On account of playing the role of liquidity injectors to the exchange via asset diversification, they can trade in considerable volume in asset diversification bringing considerable profits which even though are just 0.2% or 0.3% of the trade volume, but make up a lion’s share for the broker’s regular income portfolio.
How Can you Earn By Being a Crypto-Franchise Broking Firm in India?
Anyone can be the crypto-franchise broker or broking firm based on their scale of investments and profitability that they wish to achieve. Whosoever is either looking for a passive income or active yield making portfolio, they can enroll with any cryptocurrency exchange like PCEX Member and opt for being their crypto-franchise broker. Their key role will be to bring liquidity to the exchange by attracting traders who are willing to invest in cryptocurrencies like Bitcoin on the bitcoin trading platform. In the process, they can get commission and earn consistently by improving the volume of trade at the exchanges. The earnings of the brokers are settled as and when required to ensure higher liquidity in the hands of the broker.
