Cryptocurrencies have long made a serious effort to distance themselves from all sorts of traditional financial institutions. And while they have succeeded in doing that for the most part, it seems that crypto exchanges are now taking a page out of regular broker’s books.
Although cryptocurrencies are almost fundamentally different from more traditional types of investments, they do share plenty of similarities. In fact, some of the similarities that they share can allow cryptocurrencies to improve their business practices, as they use more tried and tested methods.
Of course, the method that they are specifically pulling from Wall Street is cutting fees, which has proven especially effective when trying to bring in customers.
The Major Crash of the Crypto Market
The crypto market as of late has surely seen better days, especially with the collapse of Terra and Luna, which are both responsible for erasing $60 billion from the market as a whole. And following that major crash, investor sentiment soured significantly, taking them away from the rest of the industry.
As investors cashed out and ran, nearly $2 trillion was wiped off the crypto market, as various major cryptocurrencies reached their lowest points in years. So, suffice it to say, it is one of the most difficult times to bring people into the crypto space.
With so much happening all at once, there is now a lot of pressure on crypto exchanges to make what is an otherwise unappealing market seem more appealing. And one of the ways that they decided to do that was by reducing their fees.
Getting ultra-competitive with Wall Street Tactics
Wall Street is famous for its incredibly competitive nature, always looking to bring in that next customer and that next wave of profits. And one of the ways that they would be able to bring in all of those clients is by offering very competitive prices on fees.
However, it’s important to understand that these companies would never take a loss by offering lower prices. They would be taking in so many clients at such a large scale that they could easily turn a profit. In the long run, they could even make a significant profit from these clients, since they could move them on to something much more profitable.
Crypto Exchanges now offer much lower fees
Crypto exchanges now are in a fight for survival, as they are looking for multiple ways that they could bring in more clients, even if they have to take them away from other exchanges. And if the company can take the loss on the little to no fees, they can simply make a profit by offering clients investments that make them the most money.