Cryptocurrency exchanges have been plagued by the criticism of charging hefty transaction fees and commissions, time and again. It seems as though the business models of these trading platforms cannot overlook the transaction costs charged from the traders. After all, the fee charged adds up to the company’s profit. However, the concept of a zero-fee trading model has been thought about and is being well executed by firms like Robinhood, COBINHOOD and the new player in the market, Change.
A study showed that only 8% of the American population has invested in cryptocurrencies. Globally, the number is even smaller. The reluctance of investors to turn towards cryptocurrencies can be reasoned with the prevalence of volatile markets, high trading fees and overpriced transaction costs, synonymous with digital exchanges. These conditions have led to the establishment of zero-trading fee digital exchanges that facilitate maximum participation in the crypto markets.
Change, a cryptocurrency company based out of Singapore, recently announced its venture as a zero trading-fee currency exchange. A mobile application has been developed by the firm for buying and selling of the crypto coins. The platform supports various virtual currencies like Bitcoin, Litecoin, Ripple, Ether, and Tether. The performance of the company is yet to be monitored but this is not the first time the zero fee model has been put to use.
Robinhood, the Menlo Park-based company founded by Vlad Tenev and Baiju Bhatt in 2013 was the first to incorporate the zero fee model in its core business operations. Despite the profits and cash flow generation of the firm being questioned by the critics, Robinhood emerged out to be one of the market leaders.
Tenev and Bhatt also strive to make the platform as user-friendly as possible. Tenev was quoted as saying, “There’s complexity under the hood, and our goal is to make it as seamless as possible in the process and make that complexity go away.”
COBINHOOD, a similar initiative is a thriving company and claims to have the largest trading volume despite the underlying concept of zero trading-fee. With new successful companies coming up with such plans, the horizon of the crypto world will only broaden. Zero fee exchanges could be the future owing to how attractive they seem to the hesitant investors.