Binance Preparing to Capture Coinbase Market Share, Coinbase Ready For Battle
With the initial crackdown in China, Hong Kong based Binance cryptocurrency exchange looked to make a move to a friendlier place, landing itself an office in Tokyo, Japan. As you’ve heard by now, due to the recent crackdown by the Japanese government, Binance is once again looking for a new home and Malta seems to be the frontrunner for a new office location.
Malta is a European island located south of Italy in the Mediterranean Sea. It has a liberal outlook towards cryptocurrencies as it looks to attract more businesses and wealthy individuals to help expand their economy. This is a great opportunity for Binance as well, as it allows the team to gain more users and gain traction across Europe.
“We are very confident we can announce a banking partnership there soon..Malta is very progressive when it comes to crypto and fintech.” – ChangPeng Zhao, CEO of Binance
Binance looking to Take Market Share from Coinbase but not without a fight
Binance has well over 10 million active users and a daily trading volume north of USD$1.7 billion, putting it in elite status as one of the largest cryptocurrency exchanges in the world. While Binance is currently a crypto-to-crypto exchange only, the European island of Malta provides a liberal regulatory policy that has Binance looking to launch a fiat-to-crypto exchange with support from local banks. This will definitely lead to an influx of new users and if the service is competitive enough, Coinbase users may start jumping ship and moving over to Binance for their trading needs.
Binance is looking to be the world leader in all aspects of the digital age. With one of the largest crypto-only exchanges, the future roadmap contains some ambitious initiatives. Zhao has mentioned his intentions to create a separate Binance blockchain and launch a decentralized exchange (DEX), so the future definitely looks bright for Binance.
Coinbase is located in the United States, has over 20 million users, is available in 32 different countries, with over US$150 billion in total trades, and is one of the largest fiat-to-crypto exchanges in the world. GDAX is the advanced trading exchange for Coinbase and average daily volume is USD$ 374 million, which is significantly lower than the volume on Binance.
Coinbase understands clients may leave for Binance, which probably lead them to a recent announcement of their own. Coinbase has announced the intention to support the ERC-20 technical standard and eventually add ERC-20 tokens to Coinbase to trade with fiat currency pairs.
On the flip side, U.S. based Coinbase recently received an e-license by FCA, a U.K. regulator and looks to speed up transaction speeds, as well as creating a presence among European nations. With over 150 different cryptocurrency exchanges, Coinbase is looking at other ways to extend its reach globally and staying competitive.
One motive is growth via acquisition, which is on the Coinbase radar. While this may not be as ambitious as Binance, it still provides an alternative, given the number of other exchanges currently the market. Could you see a situation where Coinbase acquires Kraken? Or maybe OKEX or HitBTC? These are all different possibilities at this point, especially as it would present an immediate and significant increase in user base and presence in the altcoin trading space.
All said and done, the battle between the exchanges has definitely begun and we can expect many strategic and counter moves from both parties as they fight for market share. If Binance can add fiat-to crypto options in its exchange, Coinbase will definitely struggle to maintain current market share, so this could be the golden ticket for Binance to reach the next level in its conquest.
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