Two Years In, Binance Shows No Signs of Slowing Down
It seems hard to believe Binance is only just turning two years old. The rise of the world’s biggest cryptocurrency exchange has been nothing short of stratospheric. Barely a day goes by when some new Binance innovation doesn’t make the news. No other exchange can claim to be so prolific in releasing new features.
Most recently, two pretty significant new developments have emerged.
Extending Fiat-to-Crypto On-ramping
For much of its history, Binance has made its name as a pure crypto-to-crypto exchange with one of the biggest range of altcoin pairings available. However, perhaps in a bid to compete with Coinbase, it’s now stepping up its game in the fiat-to-crypto on-ramping.
Most recently, the company announced the public launch of Binance Singapore, which allows users to buy into BTC, ETH, or the platforms native BNB token, using Singapore dollars. This came after the initial soft launch in April. The press release also alluded to Binance’s plan to “grow the Singapore blockchain ecosystem” together with Vertex, it’s local partner in the launch. This launch comes hot on the heels of the news that Binance is planning to open a regulated US exchange together with FinCEN-regulated BAM services as a local partner. At the same time, Binance took steps to geo-block US users from its platform, which surely indicates that the exchange is exercising caution towards the US regulators.
Long-Awaited Margin Trading
Another of this week’s announcements is the public launch of Binance’s Margin Trading platform. Margin trading enables traders to take short positions on assets, as well as realize gains at multiples above market fluctuations. The margin trading feature will be accessible through a newly optimized interface, and users will be able to move funds between their primary Binance wallet and their margin wallet without any transaction fees.
Margin trading was already in the pipeline after it emerged in beta on an invitation-only basis back in May. Although it only appeared to be available on Binance’s spot markets, a derivatives offering seemed to be the inevitable next step. Binance CEO Changing Zhao (CZ) confirmed this at the recent Asian Blockchain Summit in Taipei, telling the crowds that they would soon have access to long and short positions with 20x leverage.
Could the Latest Binance News Buck the Markets?
The launch of margin trading, and soon a futures platform, offers up some interesting scenarios for the crypto markets overall. Given the size of Binance’s user base, it could cause a surge on Bitcoin if traders decide to speculate on the length of the current bull run. However, the opposite could also happen. In May 2018, the Federal Reserve Bank of San Francisco published a letter pointing out that the start of the 2018 Bitcoin bear market coincided with the CME/CboE launch of Bitcoin futures to institutional investors. The letter implied that enabling these investors to take short positions caused the market to crash. Therefore, could Binance’s margin trading launch end up having a similar effect? It would be bad news for the crypto markets if so, and not just because of it would put an end to the current bull run. Overall, it seems like bad news for an industry based around decentralization that one exchange could end up having a disproportionate effect on the crypto markets overall. Some corners of the crypto universe are already in discussion about whether or not Binance is too powerful, so bringing about a downturn could cement that view. Regardless of the market impact on BTC, it seems that these two latest developments will be only good news for the BNB token, which defied market trends in 2018 and has only increased further in 2019. Market sentiment seems largely positive, even despite a temporary dip caused by the news that Binance was closing its doors to US clients.
Even with the rapid pace of development so far in 2019, there is still plenty for Binance’s supporters to look forward to. The launch of the Binance blockchain and decentralized exchange DEX offers plenty of scope for further expansion into more dApps and token listings. The futures platform could potentially add more trading pairs over the coming months.
Perhaps most intriguingly, Binance’s Strategy Officer Gin Chao confirmed that the company is also in discussions with Facebook about potentially listing the Libra cryptocurrency. He further elaborated that Binance is considering becoming a validator node on the Libra network. Assuming the regulators allow Zuckerberg’s plans to come to fruition, this would be a massive coup for Binance, as the current list of blockchain and crypto participants is thin, to say the least. Furthermore, it would put Binance in the position of one of the few firms bridging the gap between blockchain and big tech.
Overall, the rapid pace of development in 2019 has cemented Binance’s position as the world’s top cryptocurrency exchange. “Top’ in this case doesn’t necessarily have to mean volume. It refers to the company’s ability to continue innovating and expanding, making headlines week after week. At just two years old, it seems that Binance is well and truly into its stride.