Binance’s Secret Sauce: The Rise of Bitget and the Changing Landscape of Cryptocurrency Exchanges

How did Binance Attract Users as Its Market Share Declined? Cryptocurrency Panic in China Triggered by Fake Screenshot, Resulting in Fallout for Matrixport. Coverage by Asia Express.

Is Binance gaining users amidst fake news crypto panic and falling market share in Asia Express?

CCdata Crypto exchange market share Dec 5 chart (CCData)

Cryptocurrency exchange Binance proudly boasts a 30% increase in its user count from the previous year, reaching a whopping 170 million users[^1^]. Despite its recent $4.3 billion settlement with the U.S. Department of Justice over money laundering charges, Binance’s expansion efforts seem unaffected[^1^]. The exchange has made significant strides in improving its on-ramp features, now supporting 431 tokens, 112 fiat currencies, and over 970 payment methods[^1^]. However, it’s important to note that Binance’s spot market share fell from 55% to as low as 30.1% by the end of the year, according to CCData[^1^][^2^].

The New Kid on the Block: Bitget Emerges

While Binance faces a decline in market share, crypto exchange Bitget has been making quite the buzz in the industry. Bitget, which was relatively unknown a couple of years ago, now commands a spot market share of 4% as of November 2023[^2^]. What makes Bitget stand out is its success in the derivatives category, earning higher rankings among exchanges[^2^]. The rapid rise of Bitget can be attributed to its strategic investments and rebranding efforts. With a $30 million investment in multi-chain wallet BitKeep and subsequent rebranding to Bitget Wallet, the exchange now boasts a combined user base of 20 million across its subsidiaries[^2^].

The Rise and Fall of HTX: From Alleged Revolts to Hacks

In contrast to Binance’s growth and Bitget’s emergence, HTX (formerly Huobi Global) has seen a decline in its spot market share[^2^]. HTX’s market share fell to 8% compared to its all-time high of 22% in 2020[^2^]. The decline can be attributed to various factors, including an alleged employee revolt over pay and working conditions, multiple hacks targeting its ecosystem, and related companies[^2^]. Despite these setbacks, HTX’s CEO, Justin Sun, has pledged to reimburse users for their losses and regain trust in the exchange[^2^].

The Fake News Panic in China: A Tale of Circulating Screenshots

An allegedly fake screenshot suggesting that police approved the seizure of cryptocurrencies owned by foreign individuals on a Chinese Web3 protocol has caused panic in the Web3 community in China[^3^]. The City of Fuzhou Public Security Bureau clarified that the circulating screenshot was false and urged citizens not to spread rumors[^3^]. However, the panic may have been fueled by past events, such as the shutdown of Chinese cross-chain protocol Multichain and the crackdown on Web3 executives by Chinese police[^3^].

Victory Securities: Trading Success and Crypto Revenue

Victory Securities, a Hong Kong brokerage, has achieved remarkable success in the crypto trading industry. After securing a virtual asset licensing regime from the Securities and Futures Commission, Victory Securities surpassed $10 million in monthly trading revenue[^4^]. This achievement is noteworthy considering that currently, only Ethereum and Bitcoin are available for trading on licensed Hong Kong exchanges[^4^]. The company’s executive director, Kennix Chan, highlighted that several of the company’s crypto divisions are already profitable[^4^].

Matrixport and the Bitcoin Crash

Matrixport, a Singaporean firm closely related to Bitdeer, faced backlash after releasing a report claiming that the U.S. Securities and Exchange Commission (SEC) would not approve a spot Bitcoin exchange-traded fund (ETF)[^5^]. The report’s author, Markus Thielen, suggested that SEC Chair Gensler’s apprehension toward crypto makes it unlikely for him to vote in favor of Bitcoin Spot ETFs[^5^]. Jihan Wu, the founder of Matrixport, clarified that the firm does not receive insider information from U.S. regulators and emphasized that the report was based on publicly available information[^5^].

Q&A Section

Q: How is Binance able to maintain growth amid legal challenges?

A: Despite its recent settlement with the U.S. Department of Justice, Binance has continued to expand its user count by focusing on improving its on-ramp features and increasing its compliance budget to meet regulatory standards[^1^].

Q: What sets Bitget apart from other crypto exchanges?

A: Bitget has experienced rapid growth in the derivatives category and gained a spot market share of 4% through strategic investments and a rebranding effort, positioning itself as a rising star in the industry[^2^].

Q: What led to the decline of HTX’s spot market share?

A: HTX faced multiple challenges, including an alleged employee revolt, hacks targeting its ecosystem, and related companies. However, the exchange’s CEO, Justin Sun, is committed to reimbursing users for their losses and rebuilding trust[^2^].

Q: How did the circulation of a fake screenshot create panic in China’s Web3 community?

A: The screenshot alleged the seizure of cryptocurrencies owned by foreign individuals on a Chinese Web3 protocol. Although the screenshot was later proven to be false, the panic may have been fueled by past events, such as the shutdown of Multichain and the crackdown on Web3 executives by Chinese police[^3^].

Q: What factors contributed to Victory Securities’ success in the crypto trading industry?

A: Victory Securities surpassed $10 million in monthly trading revenue after securing a virtual asset licensing regime from the Securities and Futures Commission. The company’s early profitability and the availability of Ethereum and Bitcoin for trading on licensed Hong Kong exchanges played significant roles in its success[^4^].

Q: How did Matrixport contribute to the Bitcoin crash?

A: Matrixport released a report suggesting that the SEC would not approve a spot Bitcoin ETF, causing market speculation and a subsequent price drop. However, the founder, Jihan Wu, clarified that the report was based on publicly available information, and the market reaction was beyond the firm’s control[^5^].

Conclusion and Future Outlook

The landscape of crypto exchanges is constantly evolving, with Binance, Bitget, HTX, Victory Securities, and Matrixport each facing different challenges and reaping various successes. As the industry moves forward, it is crucial for exchanges to prioritize compliance and security while creating user-friendly features and offering a wide range of assets for trading. It will be interesting to observe how these exchanges adapt and thrive in the volatile and ever-changing world of cryptocurrencies.

References

  1. Binance’s Secret Sauce
  2. Binance Gains Users, Market Share Falls
  3. Fake Crypto Seizure Screenshots in China
  4. Victory Securities’ $10M Monthly Crypto Revenue
  5. Matrixport’s Role in the Bitcoin Crash

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