$1 billion of average daily volume. More than 500 active markets. Two exchange modes. Operations with fiat currencies. Lending and staking services. An academy with guides for beginners. A charity foundation. Incubators for new projects. IEO opportunities. Offices from Singapore to Uganda. And millions of happy users. That’s all about Binance — one of the most successful cryptocurrency exchanges in the world.
Changpeng Zhao (let’s call him CZ, too) has built a real crypto empire. And this story hides dozens of valuable hints for business owners, managers, investors, and regular traders. In this article, we’re going to dig deep into the history of Binance, check its milestones, and reveal success reasons. We want to understand this phenomenon. If you want to learn about the most impressive crypto business, join me!
It all started 41 or 42 years ago in Jiangsu province. Born in China, Changpeng Zhao moved with family to Vancouver in the 1980s. After college, he worked for the Tokyo Stock Exchange, Bloomberg, Blockchain.info, and OKCoin. He also has founded Fusion Systems in 2005. But the magic began in July 2017 with the Binance launch.
Thus, we think that factors that helped Zhao to kickstart his brainchild don’t come to luck only. They also include a rich experience of the CEO, a perfect sense of the momentum, prioritizing customers over other goals, and high flexibility. We will return to the last thing later. Now, let’s talk about the results.
Just after six months, Binance became the most popular exchange on this planet. It acquired 3 million users and reached a $2 billion valuation. The latter made it one of the fastest-growing unicorn startups ever. Compared to traditional unicorns, only Jet.com reached this status faster — in 4 months. Nevertheless, Binance will never be officially listed in this ranking because it’s barely possible to track the crypto exchange’s valuation.
Anyway, it’s a clear fact that Binance did something unprecedented. It shook the whole ecosystem. How? Pete Rizzo, a CoinDesk editor, defines two brilliant CZ decisions that led to this success. We’re going to agree with him and add one more reason:
- Ban of fiat currencies. Crypto trading linked to fiat was (and is) in a strange situation. Some countries stimulate it, others prohibit. But the USA with its game-shaping dollar is extremely cautious. In 2017, the crypto world was fed up with regulations so Binance delivers gallons of fresh air.
- More new crypto markets. A team behind the exchange gathered by CZ is professional. That’s why it was able to build an extensive infrastructure with perfect scalability. Even today, Binance follows this trend and tries to introduce the demanded coin pairs regularly.
- Timely leave from China. The local audience is a large piece of a crypto pie for every exchange. Paradoxically, but Binance skyrocketed because it refused to work with China. The exchange’s HQ moved to Tokyo and then to Malta. This decision saved a lot of resources from meaningless fights with regulators.
Moreover, Zhao made his move at the perfect moment. Q1 and Q2 2017 were times when the quickly growing crypto market lifted nearly all projects. Especially, customers appreciated true exchanges without dollar-binding and the US influence.
After such a successful start, Binance had to keep the pace. Well, it seems that it becomes even faster with each year. Just look at a few major announcements made by Binance in 2018 and 2019:
- January 2018 — temporary closure of new registrations due to high demand. This decision stimulated the interest even more.
- March 2018 — move of headquarters from Tokyo to Malta. As a result, Binance escaped toughen regulations and entered a new — European — market.
- June 2018 — the launch of a new crypto-fiat exchange in Uganda. Another brilliant move from CZ that opened African users the access to crypto trading.
- August 2018 — the first public acquisition ever. Binance has partnered with Trust Wallet and delivered secure mobile storage services to users.
- February 2019 — the launch of Binance DEX. A native decentralized exchange helped to attract the attention of true crypto geeks.
- July 2019 — the launch of a Singapore-based exchange. Another market, another audience, and crypto-fiat deals with the Singaporean dollar.
- September 2019 — the launch of Binance.US. CZ evaded American restrictions masterfully with the start of a new entity located in the USA.
- October 2019 — support of euro, ruble, hryvnia, and tenge. A clear trend according to which Binance moves towards Eastern Europe and Central Asia.
- November 2019 — support of the Turkish lira and acquisition of WazirX, an Indian exchange. More new markets and eastward expansion.
And this news shows another side of Changpeng Zhao. He — and his project, respectively — is adaptive. He can find growth opportunities even in the worst cases, as well as catch the most profitable deals. Avoid strict Chinese regulations in 2017 but reenter this market in 2019? Of course. Open a completely new exchange for American users after sanctions? Yeah, nice idea. Help Ukraine and Russia simultaneously? Why no.
In general, we think that Binance, as we know it today, was impossible without this feature of CZ. It may look like an evil face. But it’s vital for business.
The last point we want to cover is centered around Binance Coin (BNB) — a native exchange-based token. Arguably, it’s the most successful token of this type and one of the most profitable cryptocurrencies of 2019. Like other similar coins, it’s used as payment for various in-system services.
The two reasons for BNB surge are the consequences of CZ’s policy, too. Firstly, he made an offer the traders couldn’t refuse: all exchange fees paid with BNB are up to 50% lower. Secondly, Binance regularly burns tokens to maintain scarcity and keep demand high. As a result, BNB shows pretty steady price growth.
And, yeah, we understand that the most significant reason is the success of the parental exchange. But these things are connected.
The pace that CZ took this quarter impresses. Binance is introducing new partners, currencies, and features regularly so we can expect even more mind-blowing results soon. Rumors connect the exchange with the homeland — China. An entirely new crypto-friendly sentiment that is being actively pushed by the Chinese government may lead to a new Binance office in Beijing. Of course, this move will open a giant market.
The exchange will continue working on seamless customer experience by upgrading buy/sell functions, trading interfaces, and advanced features. Most likely, we will see new fiat support. Blog posts also hint that Zhao is interested in dApps and DAOs. Will Binance define the general crypto trends? Most likely. Will it control the entire market? We doubt that. Just because it’s all about decentralization.
Overall, we’re happy that the crypto world is diverse. Today, Binance isn’t the king of kings: it’s second by liquidity after HitBTC and somewhere in the top 5 by daily volume. It also keeps its unicorn status with $2 billion but loses this race to other crypto gods: Bitmain ($12 billion), Coinbase ($8 billion), Ripple ($5 billion), Canaan, and Circle (per $3 billion). To note, the largest brand overall is Sequoia with $1.7 trillion.
What’s next, you ask? The expansion will continue. But we’re protected from monopoly, thank Satoshi.