After reaching a settlement with the SEC, Binance’s market foundation, built over the past six years, remains strong and unaffected. This is further enhanced by the recent overall uptrend in the cryptocurrency market over the past two months. Despite being the “number one” globally, Binance continues to strive for success by maximizing user acquisition and retention.
Summary:
Binance, despite facing pressure from the United States, continues to dominate the cryptocurrency market. The company provides traders with independent custodial funds and has recently added Sygnum Bank and Flow Bank to its list of partners.
Table of Contents:
CEX leader Binance ranks first in multiple indicators
Binance’s inflow turns positive, surpassing $5 billion in the past two months
External market support strengthens Binance’s determination to survive
As the first month of 2024 comes to a close, centralized cryptocurrency exchanges (CEX) have provided comprehensive data for the entire year, showcasing their profitability. According to TokenInsight’s “Crypto Exchange Annual Report 2023,” DeFiLlama, and CoinGecko data, the top 10 cryptocurrency exchanges globally contributed a total trading volume of $34.26 trillion, a 16% decrease from 2022. Binance ranked first in both spot and derivative trading volumes, with OKX and Bybit coming in second and third, respectively.
In terms of market share, Binance’s share decreased from 54.2% to 48.7% but still maintains its dominant position. OKX occupies 16.1% and Bybit occupies 12.3%, both experiencing slight increases since the beginning of the year. Combined, they still fall short of Binance. Recent data from KaikoData shows that Binance’s market share has already recovered to 49% in the past two months.
Binance’s decrease in market share can be attributed to its enforcement actions with regulatory bodies such as the SEC and the Department of Justice in the United States. Particularly, since reaching a settlement with the Department of Justice and being fined $4.3 billion on November 21, there was a net outflow of $2.865 billion from Binance within 13 consecutive days.
Concerns have been raised about Binance’s financial strength. However, on December 4, funds started flowing back into Binance. In the two months of December and January, during the expected rise of Bitcoin ETFs, Binance’s net inflow reached $5.4 billion, reclaiming lost ground. The total asset value of Binance addresses on various chains reached $80.9 billion at the end of January, a 28.25% increase compared to the same period last year. Binance leads in terms of both size and growth.
These data demonstrate Binance’s stability in both internal and external aspects.
It has been two months since Binance reached a settlement with the Department of Justice in the United States. Apart from the impressive $4.3 billion fine, the Department of Justice described the platform as the “largest in the world,” without even using the phrase “one of.” This may indicate a higher level of regulatory positioning and responsibility. However, the impression of being the “largest in the world” is not exaggerated.
In 2023, Binance remained the largest cryptocurrency trading platform in terms of market share, despite the decrease from 54.2% to 48.7% at the beginning of the year. According to TokenInsight’s “Crypto Exchange Annual Report 2023,” this data still accounted for nearly half of the market share, with the remaining 51.2% shared among nine mainstream cryptocurrency trading platforms, of which only three had a market share exceeding 10%.
Since Mt. Gox opened the cryptocurrency exchange business in 2010, the rise and fall of exchanges have been a constant theme. The “three giants” that were frequently mentioned in the past are now represented by “B” and “O,” with “H” being replaced by the new “B.”
The current top three in terms of ranking represents a significant gap between the second, third, and first positions.
Based on data from CoinGecko (covering the first 11 months of 2023 and January 2024), Binance’s spot trading volume was $3.77 trillion, while OKX and Bybit had volumes of $0.54 trillion and $0.43 trillion, respectively. The combined volume of the latter two is less than one-third of Binance’s volume. In terms of derivative trading, Binance contributed a more substantial trading volume of $14.32 trillion, with OKX and Bybit contributing $4.96 trillion and $3.69 trillion, respectively.
In terms of total value locked (TVL) in addresses on various chains, according to DeFiLlama data as of January 31, Binance’s total asset value reached $80.9 billion, followed by OKX at $15.5 billion and Bitfinex at $13.7 billion, with a considerable gap between them.
Both Binance and OKX experienced inflows of over $1 billion in the past month, attracting significant capital. Other exchanges, including Robinhood and Bybit, also received inflows of over $100 million in US dollars during this period.
Looking at the TVL data, Binance’s value remained relatively stable at around $60 billion throughout 2023, with high liquidity in terms of inflows and outflows. In June and September of last year, Binance experienced two noticeable declines in TVL, reaching $58.8 billion and $58.1 billion, respectively, with outflows of $3.8 billion and $1 billion in US dollars.
These two declines were related to regulatory actions and partnerships. In June, the US SEC sued Binance for offering unregistered securities, while in September, Binance’s European banking partner Paysafe terminated their cooperation.
Interestingly, Binance’s TVL increased during this period, from $64.6 billion in October to $67 billion in November. Binance’s TVL reached new highs in December and January, reaching $79.6 billion and $80.9 billion, respectively, representing increases of 18.80% and 20.74% compared to November. In January, TVL grew by 28.25% compared to the same period last year. The months of December and January followed the pattern of outflows followed by inflows. The inflow values for these two months were $3.113 billion and $2.359 billion, respectively. Binance’s market share also rose to 49% during these two months.
In 2024, the impact of regulatory actions on cryptocurrency exchanges will continue, and competition among CEX platforms will persist. Over the years, the CEX landscape has constantly changed, with rising, falling, and disappearing exchanges. It is easy to see that platforms that maintain a strong desire to survive and respect for users and the market can become long-distance runners in this race. As long as the cryptocurrency market continues to expand, there will be no end in sight.
Despite the significant outflow of funds from Binance in November, creating opportunities for competitors to gain market share, market conditions have provided support for Binance to maintain its foundation. At the same time, the platform is making efforts to retain its position.
Even in the face of intense competition, this solid “number one” platform remains highly motivated and sensitive to user acquisition and retention. One visible example of this is the Binance Launchpool, which is considered to have the greatest wealth and traffic effects. In just January 2024, Binance Launchpool launched four projects, compared to 10 projects for the entire year of 2023 and five projects for the entire year of 2022. Binance locks in $5 billion to $6 billion of funds on the platform in a short period, attracting around 200,000 participants each time.
Following Binance’s lead, similar platforms on other exchanges have also accelerated their new project launches. For cryptocurrency holders, competition among trading platforms is always a positive development. Despite facing adversity, Binance maintains its leadership and leaves people wondering what kind of attractive initiatives it will introduce in the future to attract users and funds.
In 2024, the impact of regulatory bodies on cryptocurrency exchanges will continue, and competition among CEX platforms will persist. Over the years, the CEX landscape has constantly changed, with rising, falling, and disappearing exchanges. It is easy to see that platforms that maintain a strong desire to survive and respect for users and the market can become long-distance runners in this race. As long as the cryptocurrency market continues to expand, there will be no end in sight.
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