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The American gold rush was marked by a host of hard times and a few sudden millionaires. Men gave up everything to travel to California in hopes of striking it rich. But the man who really struck it rich during the gold rush was Levi Strauss, a simple tailor who made tough cotton pants for the miners.
In the 21st century, the digital gold rush has begun with the creation of cryptocurrencies, and particularly Bitcoin. Early adopters owned thousands of Bitcoin, and these few devotees are now massively wealthy.
As the market has grown, however, the major winners in the space have been companies and individuals who offer services to the Bitcoin faithful. Among these service providers, cryptocurrency exchanges are some of the most lucrative.
However, where profit can be made, competition is sure to follow. As the digital gold rush continues, some question exists as to who will win the war to dominate the cryptocurrency exchange market. A number of exchanges have sought to take a bite out of the market. The key, to date, has been a focus on creativity and value.
Creative conquerors
Creative offerings and marketing strategies have already appeared to work in bringing attention to exchanges. Consider, for example, the creative approach Binance took to bring attention to their exchange platform.
The company offered YouTube influencers a $100K prize for those who could create the best and most helpful video about how to trade on the platform. The result was a massive number of new traders, and a substantial number of videos, all of which focused on bringing new traders to Binance.
The traction from this simple but creative marketing plan produced a huge amount of news time, and subsequently, new users. Binance trading numbers increased dramatically with the increased traffic—a sure signal that creativity in the market will produce results.
Other smaller companies are offering creative solutions as well. For example, Nominex, a newcomer to the exchange world, is creating a referral program that will drive business in a similar way.
The Nominex Affiliate Program allows users to share a referral link with friends or spread the word about Nominex through media and community. Each referral receives a bonus, and there’s no limit to the number of referral levels users receive bonuses from. This is unlike any other exchange where those numbers are generally limited to 2 to 3.
Value proposition
Beyond creativity, as the number of exchanges on the market explodes, cryptocurrency traders are increasingly looking for genuine value. Beyond simply fast trades and low fees, traders are seeking a value proposition that moves beyond the simple offerings of early exchanges.
Again using Nominex as an example of a relative newcomer, the company has offered a series of token distributions for early adopters. First, for a month after the opening of the exchange, all users will receive 100% cashback on all trading fees, paid in NMX, the Nominex native token.
Second, after this first phase, the company will continue returning a portion of trading fees as a pool paid to users each day. These bonuses will be paid on a percentage basis of total transaction volume. For example, if a user had 1% of all transactions on a given day, he would receive 1% of the pool.
Other larger exchanges are seeking to create similar value propositions as well. Again, turning to Binance, the company has begun offering up to 8% interest on its BNB native token for those who use the platform’s credit card.
What’s more, the company has also offered to pump certain tokens and companies for free. The main incentive for Binance is to bring a larger user pool onto the site, and the smaller companies (like the recent addition of Perlin) benefit from having the juggernaut crypto exchange on their side.
Junk or jeans?
The future of the cryptocurrency exchange market is still up in the air. But the reality that the market will continue to grow and change can’t be denied. Nevertheless, the power for growth in the market must come from creative marketing concepts and genuine value propositions for users.
Just as in legacy financing options, companies must begin finding ways to differentiate themselves. Whether through referral programs, incentivized marketing, or bonuses on their respective networks, the future winners of the digital gold rush will be like Levi Strauss—selling the best products and the best prices.
