About the house edge will be %1. I know I have to provide different things to users. If I won't do that, people probably prefer to Bustabit.
I don't think that house edge is the problem. There have been many casinos with almost 0% house edge but no one has succeeded over the ones that have 1% or higher house edge. It's also super easy for bustabit to change their house edge and make it match yours, so it's not a big deal. I think that you have to offer something unique and different, something that will be hard for bustabit to change and will require lots of hard work from them. To my mind, a crash game with one of the best UI/UX and animation effects with some new unique features will be the key for your success.
Remember, it's easy to copy UI but it takes hard work and dedication to copy features. From the rest of your post, it feels like you are on a right track.
True, 1% is just reasonable, new comers doesn't have to play with the house edge since the bigger casinos could adjust easily. More unique approach especially in the marketing side and that includes promotions already would be more suitable for new casinos. @OP figure it out, you are entering in a competitive market, I'm sure you already have good strategy in line to reach out your potential gamblers..
you don't only focus on the casino's design (UI), house edge or anything related as there's more to it, these are just basic but the most challenging part is how to introduce your casino so you'll get their attention and would try to experience the new crash game you are making.
Just try to observe what other casinos are doing to be popular in the forum, for sure you can get an idea.