For months, I have been looking for some way to invest in cryptocurrency exchanges. The way they are positioned allows for more “riskless” profit, even if cryptocurrencies go back into a bull market. They collect fees on the way up and the way down, which is a lot less risky and makes for a good hedge against cryptocurrencies crashing again.
The issue is that for many reasons (regulation, capital requirements, location) there aren’t many good options to invest in cryptocurrency exchanges.
Judging the Risks
Frankly, the biggest risk I see with investing in a cryptocurrency exchange is that it gets hacked. We’ve seen this happen in the past few years (Mt. Gox) and several even just this year (Cryptopia and Binance). This doesn’t even account for the fiduciary mismanagement that has occurred with QuadrigaCX and Bitfinex.