The last few months have been uncharacterically calm in crypto: the lack of volatility shown only in the steady and consistent decline across the board in terms of trading volume and prices. However, Binance trading has flourished, with the company eating into the market share of their competitors and buying up a lot of the competition as they improve and perfect their line of products and services.
Trading volumes have declined across the board
Since the lofty heights of $69k, the Bitcoin price has continued to decline, and trading volumes have also fallen.
This phenomenon has been noticeable across the board, with some exchanges being hit particularly hard.
NFT marketplaces have suffered the most, with volumes on Opensea having fallen over 95% since their all-time highs.
Competition from new NFT marketplaces, such as Coinbase’s new venture, has also been dismal.
Binance trading volume continues to rise
However, unlike many of the large companies that have been suffering throughout this bear market, Binance appears to have been flourishing.
This, according to CZ, is because he has experienced bear markets before and learned from them. Famously, he sold his apartment in 2014 for 4,000 Bitcoin, after which there was a huge crash in the cryptocurrency, and the price fell 80%.
He held it throughout this period, and as of today 4,000 Bitcoin is worth approximately $75 million.
Binance introduces zero fee trading on large pairs
Competition in a free market tends to draw fees from middlemen lower and lower, assuming that they don’t have monopolistic power (which isn’t easy to achieve in the crypto space, given the decentralised nature and permissionless nature of innovation).
Binance has shown that, over the past few years, they are intent on forgoing profits in the present to ensure that they have more users in the future.
As such, they recently announced that for some pairs they would be reducing fees to zero. The exchange is very profitable in other areas and has conducted recent funding rounds in order to ensure that this practice is sustainable.
For retail traders, the difference between 0.1% and 0.15% fees isn’t hugely important, especially if the quantities of money involved are low and the asset class is volatile.
However, for large funds, institutions and traders, small differences can be hugely important. The announcement was particularly well-received by short term day traders, who can rack up a lot of volume in a short period of time, especially when they take out leverage.
Binance concentrates liquidity for stablecoins in BUSD
Last month, Binance took the decision to concentrate liquidity in stablecoin pairs by moving all stablecoins into BUSD.
The goal of this was to ensure that BTC, ETH and BNB in particular had much more liquidity for their trading pairs, and traders would be able to trade with far reduced slippage.
Although initially drawing some criticism at first, this decision has been shown to be highly popular, and has attracted a lot of larger players to Binance. Liquidity begets liquidity, and lower slippage is extremely important for those who wish to buy large sums of Bitcoin at once.
Binance is the most regulated exchange
When people think of the state of regulation in crypto, a common thought is that the industry doesn’t have that much regulation and a lot of the ongoing activities would be illicit were it not for regulators being more aware.
However, Binance has been extremely compliant with a hefty amount of legislation and regulation from all over the world and has more licenses in more jurisdictions than any other exchange or crypto company.
CZ’s mission to bring crypto to hundreds of millions of people over the next few years is being achieved by the thousands of people who work for Binance around the world, and the far greater number who are building using Binance Smart Chain.
Binance has made great efforts not only in terms of being compliant themselves in as many jurisdictions as possible, but also in terms of helping to shape the future of crypto regulation so that it is fair and reasonable.
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