- Binance coin has mimicked Bitcoin’s movements, posting 30% price hikes.
- Binance (BNB) still has a market capitalization of $52 million.
- The company is striving to become regulatory compliant for multiple jurisdictions.
- The regulatory pushback against Binance’s trading activities has barely influenced its price movement.
The Chinese government has imposed strict cryptocurrency exchange limitations to prevent frauds and scams from harming user finances. State regulators are becoming more aware of the risks associated with crypto. Crypto taxation could add $28 billion to yearly crypto taxes alone. While cryptocurrencies reside in a grey area, Binance Coin is withstanding the global exchange hegemony by vertically expanding in the crypto space.
From Exchange to Binance Coin
In 2021, Binance has registered an equal sum of achievements and setbacks alike. Binance Smart Chain was the catalyst for the developing meme coin mania. As Vice reports, Binance Smart Chain is a cheaper alternative to Ethereum, which allows faster token creation. As such, Binance offers a lower entry barrier for blockchain projects, regardless of their scope.
Data from BSCScan suggests that transactions on the Binance Smart Chain are overshadowing those on the Ethereum network. What’s more, the lower bar for entry has enabled Gen Z and limited knowledge retail traders to participate in and continue exchanging BNB tokens. Additionally, while BSC is one avenue for Binance to maintain their position, their exchange is their true pièce de résistance.
While BNB benefits from user demand by participating in crypto operations, whether it’s with dApps or speculation, Binance generates much of its profit through its exchange. Cryptoslate reports that Binance’s quarterly profits are close to $2 billion, as reflected by their crypto “Pioneer Burn,” which burned close to 1.3 million BNB tokens.
Binance is the largest exchange by trading volume, with $3.88 billion generated in average daily trades. Throughout the ICO boom of 2017 and 2018, Binance held the crypto spotlight as every listed coin managed to post notable gains. Thus was the “when Binance” meme transformed into community rhetoric, which has been since transferred to Coinbase over the past year. Despite their seeming lack of market interference, Binance has continued to hold a large share of the crypto exchange market.
On The Flipside
- Binance is increasing its regulatory compliance as governmental entities continue to push for cryptocurrency exchange regulation.
- Coinbase’s crypto trading regulations are not 100% regulated by the SEC.
- BNB needs to break through the $370 mark to flip the trendline over to bullish.
Binance Coin and Regulators
Binance has come under increased scrutiny from nation-state regulators. Growing pressure from regulators has pushed Binance to improve its regulatory compliance. Binance’s CEO stated that it’s “better to play within the confines” of compliance rules as the market continues to mature. Binance has been banned from undertaking any activities in the U.K, and has received several warnings in countries such as Thailand, Japan, and even the Cayman Islands.
Although data shows that negative news consistently impacts the crypto market, the price of the BNB token has hardly been impacted. On the contrary, the token has increased in value by 30% since the low experienced on July 20th. A plausible explanation is Binance’s method of managing damages. Changpeng Zhao, Binance’s CEO and founder, has hinted at the possibility of stepping down as CEO in favor of becoming “someone with a strong regulatory background.”
Binance’s offering is quite unique compared to the other top 16 exchanges in terms of products. Binance has halted some margin trading offers and high leveraged positions to adhere to compliance rules and become more regulatory-oriented. Binance is also expanding its physical locations to match compliance standards, including setting up an official headquarters.
Where Is It Now?
As data suggests, Binance coin (BNB) wasn’t exempt from the effects of the May 2021 crash. BNB lost more than 50% of its all-time high value, and yet, the recent negative perception towards Binance hasn’t impacted its price. Despite market turbulence, Binance has still posted returns of 1000% for 2021.
BSC developer security concerns are being addressed through a $10 million bug bounty program. It is clear that Binance is committed to retaining its share of the market by improving the quality of its products and expanding vertically to encompass all that blockchain offers.