Binance remains king as Coinbase feels strain of bear market

Binance lead size in crypto The exchange game is enough.

A simple look at the chart below, which plots the volume against Coinbase and FTX over the past few months, has hit this house.

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While the above is spot volume, there are also derivatives to consider. Although it controls Coinbase, the comparison to FTX is similar – Binance is well clear.

This largely shows how influential Binance has become as the number one exchange of choice. Despite Coinbase set to take the throne after going public in 2021, Binance remains at the top.

I remember curious about how much the public IPO would do to Coinbase’s image at the time, hoping that filing with the SEC would improve its reputation for safety and security, especially among novice investors.

I thought this could provide a catalyst for Coinbase to gain more market share, as adoption among institutions has increased and trade-fi investors increasingly flock to the virtual currency world. I believe that I underestimated the innovation of Binance, as well as the advantages inherent in it No to be public

Just a year after going public, Coinbase laid off 18% of its workforce – a whopping 1,100 people. Meanwhile, Binance not only continued to hire its employees, but also continued to advertise for open positions.

In fact, since Coinbase went public in April 2021, Binance’s token (bnb) has outperformed it significantly coin 82% off and 52% off on BNB. Interestingly, it has also performed better Bitcoin in the same time period.

risk of rapid spread

Coinbase seems to have expanded very quickly.

Coinbase CEO Brian Armstrong said, “While we did our best to get it right, in this case it is now clear to me that we have over-hired.”

Meanwhile, the inherent advantage of being a private company is that Binance does not face the constant scrutiny of financial markets, nor is it likely to sacrifice long-term growth in pursuit of short-term victories, which will ultimately be the right course of action. Not there. ,

The infamous Super Bowl ads are another example of a wrong decision. The Super Bowl was nicknamed the Crypto Bowl as a host of crypto commercials — Coinbase, FTX, and more — appeared on TV screens around the world, worth millions of dollars.

Binance, again, took a tough pass. And again, it looks like a presentational move today.

FTX acts as a lender of last resort

What about FTX? His recent move to act as a lender of last resort has been remarkable, garnering praise from across the industry. Personally, I think it’s less a Good Samaritan move, and a more opportunistic business case. Nonetheless, FTX has operated extremely well over the years, moving from strength to strength.

For me, FTX and Binance have differentiated themselves from the multitude of exchanges, and now there is a huge difference. It is especially clear now that the bear market has turned, one that is unprepared, as Coinbase is exposing its layoffs.

FTX received a lot of press in the form of bailouts for extending lifelines to companies – either through FTX or Sam Bankman-Fried’s Alameda Group, with a group of companies involved. One of the most notable was a bid for troubled lender BlockFi.

While BlockFi management originally condemned Bankman-Fried for being opportunistic rather than philanthropic – there was, and still is, a narrative that SBF pursued to protect companies rather than selfishly – I’m not sure it matters.

The bottom line is that FTX has been in a position to try and capitalize on the contagion-driven mess so many companies found themselves in. If that’s not a sign of strong planning and a formidable balance sheet, I don’t know what is.

native token

Lastly, a quick look at their native tokens is simply necessary to see how well both FTX and Binance have performed. I plotted the token of FTX, fttand Binance’s token, BNB, against Bitcoin – the ultimate crypto benchmark.

Looking at the returns since the launch of FTT in July 2019 (BNB was launched in November 2017), tokens from both exchanges have outperformed Bitcoin. BNB is up 900% and FTT 1268% since July 2019. In the same time frame, BTC is only up 100%.

While not a perfect barometer, I sometimes think of tokens as equity in a company, with the massive caveat that they are highly correlated to bitcoin and the broader market (as are the businesses themselves, to be fair). .

conclusion

In the end, I think both Binance and FTX should be happy with their management and plans, despite the downturn. Crypto is a highly volatile market and the good times cannot last forever. But with a gameplan, these two giants are ready to weather the storm, well placed when the money comes back to the sector.