3. February 2023

Binance’s Market Share and BNB Token Value Questioned: Is the Strength Real?

• Binance is currently the largest bitcoin and crypto exchange in the world with 27.50% market share of the bitcoin supply on exchanges and 595,864 BTC worth $10.58 billion belonging to their customers.
• Binance’s BNB token is one of the better performing tokens when valued in bitcoin terms this year.
• Questions are growing around Binance’s practices, solvency, BNB token value and the overall state of their business, leading to speculation as to whether the recent “strength” is legitimate or not.

Binance, the world’s largest bitcoin and cryptocurrency exchange, have seen a substantial rise in their market share of the bitcoin supply on exchanges in the last few years. Having only had 7.82% market share of the bitcoin supply on exchanges in 2018, their share is now 27.50%, with the bitcoin balance on Binance now totaling 595,864 BTC, which is 3.1% of outstanding supply, worth $10.58 billion. This bitcoin belongs to their customers and reflects the exchange’s growing strength in a decimated industry. Binance now controls approximately 60% of the spot and derivatives volume in the entire market.

Furthermore, Binance’s BNB token, the native currency of Binance’s own Ethereum-competing Layer 1 blockchain, has also been one of the better performing tokens when valued in bitcoin terms this year.

However, in the wake of the FTX collapse, questions are growing around Binance’s practices, solvency, BNB token value and the overall state of their business. The lack of transparency in the industry has led to speculation as to whether the recent “strength” of Binance is legitimate or not. Some of the questions that have been raised include: what is the full extent of Binance’s liabilities? What is the true value of their BNB token? Are the trading volumes on the exchange real or artificially inflated? What is their risk management strategy?

These are all valid questions that Binance needs to answer in order to ensure the trust of its customers. For now though, it remains to be seen whether Binance’s recent “strength” is everything that it seems or just a facade.