Sirwin
Sirwin

Cold War on Crypto Market Dominance

By idiosyncratic | Idiosyncratic Crypto | 11 Aug 2023


Binance has been leading the crypto market since the early times of its debut. When it first appeared, there was a need for fresh blood as Polonex and Bittrex were not satisfying the customers in terms of the user interface, fees, and operations. However, both Kucoin and Binance were able to change the dynamics in the market dominance.

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Though both Kucoin and Binance were very successful, Kucoin was chosen for finding 100x - 1000x projects, like Mercatox exchange. However, the focus of Binance was low trading fees, buy-back-burn mechanisms for BNB, and utility for the native token. I started to purchase BNB for exchange fees and staking revenue from the first months of the project.

Although the history of Binance has never been crystal clear, we all remember the attitude of Binance in the case of Justin's attack, and I am not going to forget these days of my life. Somehow, with both the good and bad sides of Binance, CZ was able to manage the company and grow in the crypto ecosystem. Now, Coinmarketcap, Binance Smart Chain (2nd most active chain with high TVL), and the most popular crypto exchange are owned by him.

However, the paradigm is shifting in crypto. Crypto, especially Bitcoin and Ethereum, is the focus of institutional investors and they are targeting the first or second half of 2024 when the interest rates will reach their top levels and start to go down. Besides, in case of a "mild" or "hard" recession, the only solution that the central banks always do will be printing money!

From Retailer Binance to Institutional Giants

Do you remember the titles of the news regarding Binance over the last 2 months?
All of them are purely negative. On one side, Binance is under investigation, on the other side, Binance is accused of money laundering etc.

Frankly speaking, I do not give credits to any single one of them not because Binance is purely innocent but because media is used as a weapon to create some space in crypto market for approaching giants.

Have a look at the chart below:

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CoinDesk

The last three months were purely news-driven, FUD-based impact on the market share of Binance.

In an ideal decentralized crypto ecosystem, Binance should never have such high domination rates. However, this time the concern is not centralization but planned manipulation to overthrow a market leader.

Binance, however, remains the world’s largest crypto exchange by a wide margin. Seychelles-based OKX is second in market share at 5.44% and American exchange Coinbase (COIN) is third at 5.37%.

Just take a look at the difference in market share between the top 3 crypto exchanges. The market is by far led by CZ's Binance. Yet, behold for the shift.

Institutional Prerequisites

If we are expecting the arrival of institutional investors, we need to be honest with ourselves. The giants of the markets would never jump into the crypto with its own "untamed" rules. They are coming to tame (!) the market...

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Blockchain-based CBDCs and Bitcoin / Ethereum ETFs will never happen while the market is vulnerable to the impact of some exchanges or crypto celebrities.

The game plan is simple: If you want institutional money, follow my rules for crypto.

In the scenarios of the future of crypto, we need a huge space for the giants to have control over crypto as they have in the price of commodities, fiat money, and markets.

My humble expectation is to reach $7-8T market capitulation in the bull market but with more regulations, less freedom, and a limited number of impactful figures in today's crypto market.

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idiosyncratic
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