Cryptocurrency exchanges have emerged as some of the most profitable businesses in the financial sector, generating staggering daily revenues that surpass even well-established traditional brokerages like Futu and Tiger Brokers.
Why Traditional Brokerages Are Eyeing Crypto
Recently, Futu Securities and Tiger Brokers announced their plans to enter the cryptocurrency market by launching their own digital asset trading platforms.
- Tiger Brokers confirmed that it is applying for regulatory licenses in the U.S. and Singapore to offer crypto services to overseas clients.
- Futu Securities stated that launching crypto trading is part of its expansion strategy for the second half of the year.
The primary reason? Exorbitant profits.
How Crypto Exchanges Make Money
Cryptocurrency exchanges generate revenue through:
1. Trading Fees – Typically 0.1%–0.2% per trade.
2. Contract Trading – Higher-margin derivatives like futures and options.
3. Listing Fees – Charging projects to list new tokens.
4. Withdrawal Fees – Costs for transferring crypto out of exchanges.
5. Token Issuance – Launching and selling their own platform tokens (e.g., BNB, HT, OKB).
👉 Discover how leading exchanges maximize profits
Profit Comparison: Crypto Exchanges vs. Traditional Brokerages
| Company | Q1 2021 Profit | Daily Profit (RMB) | Notes |
|---|---|---|---|
| Binance | ¥192 billion ($30B USD) | ¥200M+ | Largest crypto exchange globally |
| Coinbase | ¥50.1B ($7.715B USD) | ¥8.57M ($857K USD) | U.S.-listed exchange |
| Huobi | ¥32.5B ($5B USD est.) | ¥100M+ ($16.67M USD) | Major Asian exchange |
| Futu Securities | ¥9.29B ($1.42B USD) | ¥101M ($15.5M USD) | Traditional brokerage |
| Tiger Brokers | ¥1.33B ($204M USD) | ¥14.5M ($2.23M USD) | Traditional brokerage |
Key Takeaways:
– Binance’s daily profit (~¥200M) exceeds Futu’s quarterly earnings (¥9.29B).
– Tiger Brokers’ entire Q1 profit is less than Binance’s single-day revenue.
Case Study: Binance’s Staggering Earnings
Binance uses 20% of its quarterly profits to burn (destroy) BNB tokens, reducing supply and increasing value. In Q1 2021, Binance burned $600M worth of BNB, implying a total profit of $30B (¥192B).
For perspective:
– Tencent (a tech giant with 60,000+ employees) earned ¥478B in Q1.
– Binance (with ~1,000 employees) made 40% of Tencent’s profit—far more efficient.
👉 Learn how Binance dominates the crypto market
Why Are Traditional Firms Rushing Into Crypto?
- Massive Profit Potential – Crypto trading volumes are 10x+ traditional equities.
- Growing Institutional Adoption – Hedge funds, banks, and corporations now hold crypto.
- Regulatory Momentum – Countries like the U.S. and Singapore are formalizing crypto laws.
Challenges for Traditional Brokers
- Regulatory Hurdles: Firms must obtain licenses (e.g., U.S. MSB, Singapore’s PSA).
- Limited Domestic Access: Chinese brokers (Futu/Tiger) can only serve overseas clients.
How Exchanges Secure Licenses
United States (MSB License)
- Register a U.S. entity.
- Appoint compliance officers.
- Submit financial and operational records.
Singapore (Payment Services Act)
- Apply for a Digital Payment Token (DPT) license.
- Undergo strict anti-money laundering (AML) checks.
Current Status: