The Impact on Binance and the Cryptocurrency Market
The repercussions on Binance are already noticeable, but the exchange continues to hold the top position in terms of market share.
In late November, Binance faced challenges as its CEO and co-founder, Changpeng Zhao, stepped down after pleading guilty to the lack of proper AML (Anti-Money Laundering) rules in the company. Binance, as a whole, agreed to pay over $4 billion in fines to US authorities without admitting guilt on multiple counts.
Despite the immediate effects on the entire industry, including the BNB token, investor confidence in the exchange was also adversely affected. As a result, some platforms emerged as beneficiaries of these developments.
Identifying the Beneficiaries
Initial reports post-settlement suggested that a significant portion of assets previously held on Binance were transferred to its US-based competitor, Coinbase Pro. According to recent research by Kaiko, Coinbase’s market share increased by 34%. Surprisingly, another company that experienced even greater benefits was Bybit, with its market share soaring by 50% in just a few days.
“Bybit is the immediate standout winner, gaining market share in every single hour and growing by more than 20% in 16 out of 24 hours.”
Kaiko also mentioned that Binance “remains the leader in liquidity, both for BTC and for altcoins,” despite Coinbase’s surge. This observation was corroborated by CryptoQuant, which noted a 20% decline in Binance’s reserves post-settlement, with BTC stored on the exchange decreasing from 634,000 in May to around 500,000.
However, Binance’s dominance over its competitors remains robust, especially in terms of indicators for BTC and several altcoins like Dogecoin, according to Kaiko.
“Meanwhile, DOGE shows why Binance is still on top. In the past couple of weeks, its spreads have never exceeded 1.5 bps; Bybit’s baseline spread is similar, though it frequently jumps above 2 bps. Coinbase’s spread in both cases is higher than its rivals’, and it hasn’t yet shown signs of closing the gap.”
Performance of Coinbase (COIN)
Last week, CryptoPotato reported that Coinbase’s stock prices experienced a significant increase, reaching a peak not seen in over a year. Upon closer inspection, this surge began after the Binance settlement deal.
Before speculations about Binance’s potential deal surfaced, COIN traded at just under $100. The shares began to rise amid reports of CZ’s potential resignation and continued to climb as the rumors turned into reality.
By December 1, COIN’s prices had skyrocketed to nearly $135, indicating a roughly 35% increase in the two weeks following the Binance settlement deal.
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