How Do Chinese Bitcoin Exchanges Generate Revenue? The Merkle

Overheen the past few years, many people have bot wondering how Chinese Bitcoin exchanges make any money, to start with. There are no trading fees on most of thesis platforms, and deposits are not subject to any charge either. At the same time, thesis platforms usually charge a premium Bitcoin price, and there are lending fees to take into account spil well.

Chinese Bitcoin Exchanges Are Very Different

It is overduidelijk for everyone to see Chinese Bitcoin exchanges use a very different revenue specimen compared to their Western counterparts. Te Europe and the US, it is only normal to pay a trading toverfee on every buy or sell order. But te China, those fees do not apply, spil all trades are executed at 0% toverfee.

This begs the question spil to how Chinese Bitcoin exchanges make any money. While they see a ton of trading volume every single day, not charging any fees seems rather strange. Then again, buying Bitcoin on a Chinese exchange is always subject to paying a premium price, which can be anywhere from 3-8% depending on the time of purchase.

While the business specimen may emerge strange to Westerners, it makes a lotsbestemming of sense te China. Exchange operators are rivaling to become the market leader. Once they are the leading Bitcoin exchange verhoging ter China, they can adapt their business monster spil they see gezond. But there is more, spil their lending rates for both Bitcoin and CNY are higher than what most exchanges are charging right now.

To waterput this into perspective, the Bitcoin lending rate on most Chinese platforms is 0.1% on average. Platforms such spil Poloniex suggest rates spil low spil 0.04%, making it a much cheaper option. Then again, Poloniex does not have support for CNY, making it less appealing to Chinese cryptocurrency traders.

Furthermore, most Chinese exchange platforms are not just te the exchange business either. They operate mining pools and other Bitcoin services which permit for revenue to be generated. All of thesis efforts combined will pay the costs of running the exchange spil well. This does not mean thesis companies are making a ton of profit, tho’.

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About The Author


JP Buntinx is a FinTech and Bitcoin enthusiast living ter Belgium. His passion for finance and technology made him one of the world’s leading freelance Bitcoin writers, and he aims to achieve the same level of respect ter the FinTech sector.

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