Strip out the money crypto exchanges spend on marketing and growing the business, and their gross margins are incredible, in the 90% range. That’s because when you buy or sell Bitcoin, the exchange is just making a ledger entry on its own system recording who owns that Bitcoin, or a fraction of it.
The exchange doesn’t move the Bitcoin, build anything or operate anything, so there’s very little operating cost tied to the trading platform. That’s why Ticker Tape is very fond of Kraken. We’ll likely do a third round if we can get one together before the company goes public.
Key points
- Excluding growth and marketing spend, crypto exchange gross margins are in the 90% range.
- Trades are mostly ledger entries, so operating costs are very low.
- Ticker Tape likes Kraken’s model and may do a third round before its IPO.
Accredited investors: learn about current opportunities at tickertapeinvestments.com.
