Binance Volumes Collapse. Is Crypto in trouble?
The latest buzz news in crypto is that Binance has lost its title as ‘leading exchange’ to rival Okex, as well as a host of other exchanges by recently suffering a 50% collapse in daily volume. But what’s actually happened? Has the star of crypto lost its gloss?
I am known for being an ‘exchange guy’, and I believe this is fascinating news and should be drawn to the attention of anyone interested in this business.
So what caused this to happen to Binance? Are they having issues that we don’t know about?
The simple answer is No. Binance’s CEO, Changpeng Zhao, has reported that everything is business as usual.
However, for most of us, this isn’t a satisfying explanation for why exactly their volume has collapsed so dramatically, while many rivalry exchanges claim they have not been impacted. On top of this, coinmarketcap.com have reported daily volume is still trading at $12 billion.
The answer is obvious.
Binance is one of the only exchanges presenting real trading volumes, while the others, including the total, is based on ‘fake trading’.
Just consider the facts:
1. The market is undergoing the lowest volatility for a long time, so consequently, traders are less active.
2. As a result, there is no new news that people are translating into a new direction, so trading has plummeted.
3. Of the news that is mediated, there is nothing that challenges and changes the existing negative views of Retail traders or investors to do more. Ironically in fact, it persuades them to do less.
4. There is no news to get Institutional investors more involved.
Everywhere I travel, Binance is recognised as the market leader. Everyone uses it. These people do not create “fake trading”, so their volume is real. This means that if Binance drops by 50%, the total market should drop by 50%; which makes sense given the market conditions.
Yet the market has claimed volumes haven’t dropped, which means, as so many have proclaimed, that the volume of most exchanges; especially Asian exchanges, is fake.
Wash trading and the like.
My guess? If the volume is at $12 billion, then $10–11billion of that is fake! (90%+).
The reason being is simply because of marketing; it allows certain exchanges to attract more traders and more coin listings. I’m not going to name any exchanges in particular, but I bet you could take an educated guess.
So you might ask…will anything happen to stop this?
I hope so. But don’t think it really matters.
Why? Simply because the second Crypto Boom is about to arrive in 2019, and the major volumes will only go on credible licensed exchanges, not those ‘fake trading’ sharks. Alongside this, the volume will become more localised so people will only care what the volume [i.e. liquidity] on their local licensed exchanges is, rather than some overseas-based operation.
But back to the big question. What about the 50% collapse in volume?
Personally, I am not concerned in the slightest and expected this to happen. I consider it to be all part of the ‘consolidation’ or ‘shakeout’ process that normally happens between two strategic growth waves in an industry.
The point is that we are currently going through the stage that always occurs before the real Tidal wave hits. Particularly in crypto, experts always claim that before a Tidal wave, the air goes dead quiet. Birds become silent.
They call it, the “calm before the tsunami” [The Japanese word for Tidal wave]. The Biggest boom in wealth history, the Second Crypto Boom, is about to hit.
We are in the calm. Isn’t it exciting?!
