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The narrative around the world’s largest crypto exchange, Binance, is changing; the company is accused of trying to create a monopoly by many users, and it is compared to Amazon and other behemoths of the traditional financial sector. Is there any truth in these assertions?

By a article per The Guardian, Binance is poised to consolidate a monopoly in the crypto industry. The Changpeng “CZ” Zhao-led company has diversified its products and subsidiaries to capture market share from traders, investors, stakeholders, non-fungible token (NFT) users, and more.

Binance BNB BNBUSDT Amazon
The price of BNB is moving sideways on the daily chart. Source: BNBUSDT Tradingview

Building the Amazon of Crypto

His disappearance was good for Binance. In recent weeks, Binance’s fiercest competitor, FTX, has collapsed. The bankrupt company filed for bankruptcy in the United States.

The Guardian article claims that the crypto exchange dominates “50% of the entire crypto market and as a result, it sets the price for bitcoin and other cryptocurrencies.” Additionally, the article claims that the crypto exchange has the highest Bitcoin (BTC/USDT) trading volume.

The author claims that Binance “manipulates” the Bitcoin spot price and uses trading software to liquidate its clients’ positions. Thus, the crypto trading platform can take the reins of the crypto market and enforce its monopoly. However, the article makes several unsubstantiated claims.

Moreover, the author claims that Binance will increase the price of BTC to attract users to the platform. The price of cryptocurrency moves in tandem with traditional markets, and it is likely to continue its downward trend for as long as macro conditions dictate.

Despite these facts, the article presents the rumors and speculations surrounding Binance and its CEO. On several occasions, CZ expressed surprise at FTX’s collapse and denied that the company had any significant involvement in recent events.

Additionally, CZ believes that the industry is not benefiting from the implosion of exchanges, customers and institutions losing money, and people losing faith in the fledgling industry. In an interview with TechCrunch, the executive said the following about his involvement in the collapse of FTX:

I still don’t think I have that much influence. I think we were the straw that broke the camel’s back. It’s not a really strong straw. There are a lot of things that have been built there. I may have just been the last thing that pushed him.

The data indicates that the exchange is profiting regardless of what CZ thinks of FTX and the creation of a monopoly. The trading platform absorbed a significant portion of its failing competitor’s open interest and trading volume, as shown below.

Could the collapse of FTX play against Binance?

In the interview with TechCrunch, CZ acknowledged their efforts to raise an “industry recovery fund”. This intuitive aims to raise millions to support fledgling industry and related projects.

In this sense, CZ claims that almost “every project you hear about in the news” will go to Binance to receive financial assistance or to form a partnership. This status quo highlights the ubiquity of CZ and its company in the industry.

However, the ghost of FTX might drive out its competitor in the years to come. On the latter, CZ added:

Many consumers are really impacted financially, they have money stuck on FTX etc. This will really shake trust and credibility in the industry. We will have a lot more education to do. We need to increase the transparency of our businesses – significantly. That in itself is probably a good thing.





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