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How Binance outperformed Coinbase in less than a year

How Binance outperformed Coinbase in less than a year

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Answer How Binance outperformed Coinbase in less than a year

The trading volume of the cryptocurrency market has been on a downward trajectory throughout this year. But this did not affect the growth rate of Binance, which is currently the best cryptocurrency exchange in the world by volume.

Malta-based Binance expects to generate around $1 billion in profits despite the market downturn in 2018. This is roughly $650 million more than Coinbase’s estimated $456 million in annual profits by the end of this year.

And while the market awaits a more accurate picture as both platforms submit their annual reports in the coming year, the surplus profit gap between Binance and Coinbase forecasts propelled Binance to the title of the most successful trading platform of 2018.

Read:Is the founder of Linux the founder of Bitcoin?

Size comparison

According to the Crypto Volume Index available at the Blockchain Transparency Institute, Binance leads the cryptocurrency exchange industry in terms of 24-hour trading volume. As of November, the platform has posted daily transactions estimated at $1.02 billion on its platform. At the same time, Coinbase recorded a volume of only $106 million. Other global platforms, including OKEx, Huobi, BitFinex, etc. have deployed more capacity than their American counterparts.

However, Coinbase tops the list when it comes to active users. The company has 421,909 active customers as of November 2018, while Binance ranks second with a total of 312,801 active users.

However, the BTI report points out that fake trading is one of the main factors behind the excess volumes of the major trading platforms. However, traders buying and selling assets at the same time can create misleading financial activity in cryptocurrency exchanges. Moreover, deals that participate in paid listings also generate fake volumes.

There are cryptocurrencies with a small market size that are speculated with amounts ranging from 5 to 60 BTC. The platforms then use these digital currencies to artificially inflate their volumes.

Read:The seventh largest bank in the world bans financial transactions in the crypto market

Fewer Cryptocurrencies on Coinbase

Compared to Binance, Coinbase has fewer “altcoins” listed on the exchange. The Bitcoin exchange has recently gained momentum after adding new cryptocurrencies such as: Bitcoin Cash, ETH, Ethereum Classic and Litecoin. Meanwhile, Binance has around 158 cryptocurrencies with nearly 400 trading pairs.

However, the regulations limit Coinbase’s business more than they do Binance.

Coinbase operates as a licensed money-sending business in the US, allowing it to regulate banking relationships with local banks. This means that the platform can facilitate crypto-to-coin trades for its customers. But only those assets that are either decentralized or regulated by the Securities and Exchange Commission (SEC) under their own securities law can be listed.

Read:Bitcoin rebounds to the $20,000 level and Ethereum is back to the $1,000 level

While the Binance platform does not have such divisions. The platform typically operates as a crypto-to-crypto trading platform and does not offer any “coins” trading option. This allows them to circumvent many of the legal aspects that Coinbase must face on a daily basis.

In the end, however, it is the profits that decide which one between them is the winner. Binance is so far the leader in this field and others are following, despite being a relatively newer and less experienced exchange.


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