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Cryptocurrency use cases have grown in the last couple of years. For some users, cryptos are investments while others use them for operational and transactional purposes. Crypto businesses revolve around these purposes. Those who choose to use crypto as an investment, like Tesla buying BTC worth $1.5 billion in 2021, hodl and use it as a hedge against inflation. Others create crypto tokens and attract investments through ICOs and STO funding methods.
Conversely, some platforms allow users to exchange their crypto — ETH to USD or other fiat currencies — at a transaction fee. With the rise of decentralized finance, financial investment services, including crypto lending and NFT marketplaces, are now a thing.
In this piece, we look at 5 best crypto business ideas you can capitalize on to make money in the crypto space.
1. Crypto Exchange
Today, successful exchange platforms like Binance and Coinbase are worth billions of dollars. These digital marketplaces earn money through fiat deposit fees, trading fees, and crypto withdrawal fees from the makers and takers. Developers pay listing fees to allow their tokens to be traded on the exchange platform. Listing ensures your exchange platform has a diverse asset selection.
Besides, as an exchange owner, you can earn huge profits from professional traders taking part in margin trading and staking on your platform. Initial exchange offerings (IEOs) help developers raise capital on exchange platforms and increase the exchange’s liquidity eventually.
However, starting an exchange platform requires you to take care of licenses, which are quite ambiguous since the industry is relatively young. Thus, there have been multiple non-compliance cases, some leading to billions of dollars in settlement payments — Binance’s 2023 case in the US.
2. Crypto Lending and Borrowing Platform
Crypto lending is one of the newest innovative financial services gaining momentum in the blockchain industry. To start a crypto business that allows users to borrow crypto loans, you need to focus on security and compliance. Whether it's a complex platform or a simple P2P lending platform, ensure to offer non-custodial loans that run on smart contracts to guarantee security.
Similar to traditional bank loans, a crypto lending platform lends out the deposited crypto to borrowers or invests it in other businesses. Similarly, the platform requires borrowers to make monthly payments. However, the terms are a bit different. For instance, the borrowers may be required to deposit 100% in crypto collateral before receiving crypto loans.
What’s more, crypto lending platforms can be centralized or decentralized. The decentralized platforms make the borrowing process seamless by offering smart contracts with inbuilt valuation systems that monitor crypto volatility constantly. This ensures the lending platform doesn't make any losses due to loan defaults.
Crypto lending and borrowing platforms rarely go bust — due to the margin calls placed when lending — but when they do, it’s always catastrophic. This is common when institutional borrowers (hedge funds) are involved. This recently happened to Voyager Digital and BlockFi in 2022 after Singapore-based crypto hedge fund Three Arrows Capital defaulted.
3. Crypto Games and Collectibles
The interaction of blockchain technology and gaming has been a fascinating evolution for the gaming world. While it's still in the nascent stages, reports suggest that the crypto games and collectibles market size is expected to grow past $500 billion by 2030. This makes it an ideal crypto business idea to try out.
The popularity of Web 3.0 games has been driven by non-fungible tokens (NFTs) that represent in-game collectibles — skins, characters, virtual land, and weapons. These items can be traded and transferred across the metaverse of the gaming world. Even better, they have value outside the game environment, opening up new revenue streams for players and game developers.
What’s more, creating Web 3.0 games with play-to-earn models allows players to earn NFTs that they can trade for crypto leading to higher retention rates. As a game developer, you can earn revenue through initial NFT sales or via smart contracts programmed to distribute a percentage of each NFT resale.
While crypto games and collectibles have created new revenue streams, there are environmental concerns relating to blockchain energy consumption. Besides, regulatory concerns still plague the commercialization of in-game rewards.
4. Cryptocurrency MLM Business
Crypto Multilevel Marketing (MLM) businesses have emerged to help crypto developers promote their initial coin offerings. Crypto MLM software combines decentralization with network marketing, enhancing security and reducing the need for intermediaries.
Similar to traditional MLM, where one earned commission when people purchased a company’s product or service using their referral link, MLM software rewards people who help market and issue crypto tokens. However, unlike traditional MLM, crypto MLM software brings about transparency and trust. Users are confident that their commissions are accounted for since every transaction is recorded on a public ledger. Besides, automation of payouts reduces the risk of errors and disputes during payments.
You can try out a crypto MLM software that helps onboard businesses dealing with user data encryption or better yet one that allows crypto wallet integration of an organization’s sales team to enable seamless commission payouts.
That said, crypto MLM businesses face an inherent problem due to market volatility. Crypto market fluctuations impact the value of commissions, which may put off participants.
5. Crypto ATM
ATMs have long served as an easy means for us to access and deposit funds into accounts linked to a specific bank. Similarly, crypto Automated Teller Machines (ATMs) allow crypto holders to exchange their coins for fiat currency and vice versa. Currently, there are over 34,000 Bitcoin ATMs globally, highlighting their growing popularity in the remittance industry. It’s no surprise since crypto ATMs offer faster and cheaper transactions and are more transparent and secure.
Source: Pixabay
The main revenue streams of Crypto ATMs include transaction fees ranging between 5% and 15%, transaction surcharges, and partnerships with businesses that accept crypto payments. The transaction surcharges fall between 1% and 4% of each crypto transaction made.
Despite the numerous benefits, crypto ATM businesses face multiple risks. For instance, they are frequently targeted by fraudsters due to crypto’s anonymity. Besides, they are not regulated by the federal government and hence not insured. Loss of funds or theft from crypto ATMs can be catastrophic for the business owner.
Conclusion
The crypto industry is growing rapidly as more companies integrate blockchain tech into their operations. This growth has led to multiple opportunities for entrepreneurs looking to dive into the crypto business. From crypto exchanges to NFT gaming platforms, there are countless areas you can invest in and earn a fortune.
That said, crypto games and collectibles look like the most ideal crypto business today thanks to the size of the global gaming market and its growth potential.
