Crypto Brokerage Boom: Futu and Tiger Brokers Enter the Market
Recent announcements from Futu Securities and Tiger Brokers reveal their strategic pivot toward cryptocurrency services, with plans to launch dedicated trading platforms.
Key Developments:
- Tiger Brokers confirmed applications for regulatory licenses in the U.S. and Singapore to serve international clients
- Futu Securities indicated Q3 2023 as their target launch window for crypto trading services
The Profit Powerhouse: Crypto Exchange Economics
Cryptocurrency exchanges have emerged as the most lucrative business model in digital assets, leveraging:
👉 High-volume trading fees and commissions
2023 Q1 Profit Comparisons:
| Exchange | Net Profit (USD) | Daily Earnings (USD) | Key Metric |
|---|---|---|---|
| Coinbase | $771.5M | $8.57M | 56M verified users |
| Binance | $3B | $33.3M | 346% user growth QoQ |
| Futu | $129M | $1.43M | 789K active accounts |
| Tiger | $18.9M | $210K | 376K funded accounts |
Binance's daily profits eclipse Tiger's quarterly earnings
Revenue Streams That Fuel the Gold Rush
Core Income Sources
- Trading commissions (0.1%-0.2% per transaction)
- Futures/options trading (higher-margin business)
- Listing fees for new tokens
Ancillary Profit Centers
- Withdrawal fees
- Staking services
- Platform token economies (BNB/HT/OKB)
Industry Insight: One mid-sized exchange reportedly generates $9M monthly from just 1,000 active derivatives traders.
Traditional Finance Eyes Crypto Profits
Established financial institutions are accelerating crypto initiatives:
- Global Banks: Goldman Sachs, Standard Chartered, DBS Bank
- Brokerages: Futu, Tiger adapting hybrid models
- Payment Firms: PayPal, Square integrating crypto services
Regulatory Strategy:
All new entrants emphasize offshore operations, pursuing licenses in crypto-friendly jurisdictions like Singapore and Wyoming.
The Licensing Landscape
United States Framework:
- FinCEN MSB license (mandatory for crypto businesses)
- State-level requirements (e.g., NY BitLicense)
- SEC compliance for security tokens
Singapore's Payment Services Act:
- 300+ applications pending (including Alibaba, Binance)
- Strict capital and AML requirements
- No fixed approval timeline
FAQ: Understanding Exchange Economics
Q: How do exchanges generate such high profits?
A: The combination of high trading volumes (trillions annually), multiple revenue streams, and low overhead creates exceptional margins.
Q: Why are traditional brokers entering crypto now?
A: Client demand, revenue diversification, and the maturation of regulatory frameworks make timing optimal.
Q: What risks do crypto exchanges face?
A: Regulatory uncertainty, cybersecurity threats, and market volatility present ongoing challenges.
Q: How does Binance maintain its dominance?
A: First-mover advantage, global liquidity pools, and continuous product innovation sustain its leadership position.
The future of digital asset trading appears robust, with institutional participation signaling mainstream acceptance. As traditional finance converges with crypto markets, investors stand to benefit from increased competition and professionalization of services.
👉 Discover how leading exchanges optimize their trading ecosystems