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Cryptocurrency Exchanges Are Fighting to Escape Binance’s Shadow

It’s impossible to assess the cryptocurrency landscape without considering Binance. It looms large over the industry, dictating trends, soaking up liquidity, and compelling new exchanges to fight tooth and nail for market share. Most exchanges aren’t gunning to become the next Binance. But they must all exist in its shadow while striving to carve a niche of their own.

Also read: New List Claims 1.9 Million Bitcoin Held by Centralized Exchanges

Binance Is a Giant That Won’t Stop Growing

This week, a new exchange ranking system revealed that 1.9 million BTC worth around $14 billion is stored on centralized exchanges. A good chunk of that resides with Binance, where 2.5 million trades are conducted daily. Earlier this year Binance made headlines when it moved $1.3 billion of BTC in a single transaction. Its spot exchange dwarfs the competition, though its futures exchange which launched in September still lags behind the market leaders.

Barely a day seems to go by without Binance rolling out a new product or feature. This week, for instance, it announced zero-fee tezos staking. The move was seen as a direct challenge to custodians such as Coinbase, which charges 25%, and which charges 33%. “Staking will become a user acquisition service similar to what Coinbase Earn is doing,” ventured The Block’s Larry Cermak. “Exchanges will eat the costs to attract new customers.”

New Exchanges Are Having to Get Creative

New exchanges looking to lure customers from giants such as Binance, Coinbase, and Huobi face a dilemma: should they emulate the formula that’s worked so well for Binance, or chart a different path and pray their boldness pays off?

Cryptocurrency Exchanges Are Fighting to Escape Binance’s Shadow

Stormgain is a new crypto exchange that finds itself in this unenviable position. Its CEO Alex Althausen told that exchanges that replicate the status quo are setting themselves up to fail, saying: “The market doesn’t need another dozen Binance or Coinbase clones. There’s nothing wrong with introducing features that have proven to be successful elsewhere, but your exchange needs to have a USP that will enable it to make a name for itself.”

“With Stormgain, we’ve focused on giving traders tools that will empower them to make smarter decisions, and to ultimately increase their profitability. This includes things like free demo accounts to simulate trading, including the use of margin with up to 100x leverage, and trading signals for specific cryptocurrencies, which are directly integrated into the trading platform.”

Cryptocurrency Exchanges Are Fighting to Escape Binance’s Shadow

Emirex is a Dubai-headquartered company that oversees Bitcoin Middle East Exchange as well as Digital Commodities Exchange for tokenized commodities. Its co-founder Irina Heaver told that there is still room for emerging exchanges to prosper through focusing on the needs of regional investors. “There will always be a need for global exchanges,” she said, “but they will struggle to adapt to meet the needs of traders in specific jurisdictions. We’ve found through listening to the concerns of our customers that there’s a demand for services that cater to their technical ability, product familiarity, languages and fiat currency requirements.”

“Localization and understanding the uniqueness of the local markets is the key. From liaising with businesses in the Middle East, and fielding demand for tokenized representations of traditional assets such as commodities, for instance, we’ve been able to create a platform that’s tailor-made for that, and are now expanding into trading tokenized bonds and sharia compliant sukuks. This is something which international exchanges simply aren’t equipped to do.”

Has Binance Become Too Big to Fail?

Four days ago, Upbit became the seventh major exchange to be hacked this year when $50 million was drained from its ETH cold wallet. In May, Binance suffered a similar fate, losing $40 million of cryptocurrency. That was small change to the exchange, but given the amount of cryptocurrency it holds, including staking and lending assets, it remains a prime target for attackers. Binance has since tightened up its procedures, but if lightning were to strike twice and strike harder, the crypto market would react accordingly.

The ideal solution is for users to store more of their crypto in noncustodial wallets and for decentralized exchanges to improve to the point where they can compete with CEXs. For now, the best that can be hoped is for traders to avoid putting all their eggs in one basket. Smaller exchanges carry their own security trade-offs, naturally, and it will take time for newer entrants to build up trust and liquidity.

Of course, it’s easy to criticize the king. Centralization concerns aside, Binance is widely regarded as a net good for the cryptosphere, having improved the landscape in a wealth of ways. Nevertheless, bitcoiners have reason to remain wary of exchanges that become “too big to fail.” Years ago, another exchange held that mantle. Its name was Mt. Gox.

Do you think Binance has gotten too big? Let us know in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Kai Sedgwick

Kai’s been manipulating words for a living since 2009 and bought his first bitcoin at $12. It’s long gone. He’s previously written whitepapers for blockchain startups and is especially interested in P2P exchanges and DNMs.

Kai Sedgwick , 2019-12-05 06:30:51 ,

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NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

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