As a leader in the technology industry, Musk's most successful "one order" may not be Tesla. In the recent wave of market drops, Tesla's market value has fallen by nearly 40% compared to the high.
It's cryptocurrency. Compared with the global stock market that has been declining, digital currency seems to be much stronger, and the price of Bitcoin is still hovering around $50,000.
Just as the stock market rose sharply, the brokerage platform benefited. Cryptocurrency exchanges have become the biggest beneficiaries, especially the top platforms.
Data from CryptoCompare shows that trading volume on major exchanges jumped more than 35% to $2.4 trillion. Among them, Binance had the largest transaction volume in February, reaching 761 billion US dollars, an increase of 66% over the previous month.
In addition to scale, strict, lenient, and volatile regulatory policies are also key variables that influence exchanges' re-ranking.
The good news is coming. After global corporate leaders and financial celebrities have turned their fans and black fans on Bitcoin, the US-based digital currency exchange Coinbase is knocking on the door of Nasdaq. Under the highly sought after market value, the market value has passed the 100 billion U.S. dollar mark, which has once again polished the label of compliance with mainstream digital currency exchanges.
However, unlike traditional securities firms that are subject to strong controls, the globalization and decentralization of digital currencies also destined the battle of exchanges to be a global battle without borders.
In this "world war", what are the key variables that dominate the outcome of the battle? Is Binance's position as the world's top trading volume stable or unstable?
Gates turned fans, Ma Yilong brought the goods, Bitcoin soared, and the exchanges lay profit?
A few years ago, when Binance founder CZ tweeted, "If you sell Bitcoin for less than $10,000, slap yourself", the comments were full of ridicule.
Later, he revised the figures from 10,000 U.S. dollars to 100,000 U.S. dollars and 249,000 U.S. dollars, but the ridicule became less and less.
Although the big names in the global corporate and financial circles, their belief in blockchain is not as fanatical as entrepreneurs such as CZ.
But, at least, their faces have changed for the better.
Gates is one of them.
During the year-long bear market in 2018, Gates claimed that if there was an easy way to short Bitcoin, he would go short Bitcoin.
But recently, in an interview with CNBC, he claimed that his attitude towards Bitcoin has turned "neutral".
Although Munger, Buffett's lifelong friend, has not considered starting Bitcoin for the time being, he does not oppose thinking of Bitcoin as an "artificial gold substitute."
Musk's attitude is a big turn. Many years ago, a friend gave Musk 0.25 bitcoins, but he quickly lost the password.
But in 2021, Musk began to publicly sing more digital currencies, at least igniting two or three waves of digital currencies.
On February 8, 2021, Tesla was revealed to have used $1.5 billion to buy Bitcoin. The price of the currency rose by 20% on that day and reached an unprecedented high of $58,300 on February 22-the price of a Bitcoin for the first time. More than 1 kilogram of gold.
The profit of Tesla's currency speculation has even crushed its main car-building business-by mid-February, Tesla had made more than $1 billion in currency speculation, exceeding its net profit of auto manufacturing for the whole year of 2020.
Musk does not favor Bitcoin alone. On March 5th, Musk tweeted again, claiming that "Doge (Dogecoin) is spelled Egod (meaning electronic god)."
Tesla is not the only company that has heavily invested in Bitcoin.
According to statistics from the portal bitcointreasuries.org, as of the beginning of March, a total of 42 companies held Bitcoin worth more than 65 billion U.S. dollars, including 19 listed companies in North America/Europe.
Although the currency price has risen and fallen sharply, some people have burst their positions and some have become rich. But regardless of ups and downs, as more and more individual and institutional investors enter the market, the trading volume of digital currencies has been rising.
Statistics from the research institution CryptoCompare show that in February of this year, the trading volume of cryptocurrencies jumped to US$2.7 trillion.
The cryptocurrency exchange (which can be regarded as a broker in the digital currency field) that builds channels and builds roads will naturally become a steady winner.
According to information released by Binance, the world's largest digital currency "broker", throughout 2020, the number of institutional accounts opened by this Chinese-controlled and the world's largest bitcoin "broker" has soared by 46% in 2020.
As the tide rose, by the end of February, the market value of Binance's token, Binance Coin, had become the third largest global digital currency after Bitcoin and Ethereum, with a market value of more than 260 billion yuan.
Its founder, CZ, predicted in December last year that Binance's full-year net profit for 2020 is expected to reach 1 billion U.S. dollars (6.4 billion yuan). An analogy is that the net profit of China's largest domestic brokerage giant CICC in 2020 is 6.828 billion yuan to 7.552 billion yuan, which is the same as Binance.
Moreover, in December when CZ made the above prediction, the price of Bitcoin had just approached $20,000. Today, the price of Bitcoin has doubled, which means that Binance’s transaction scale, revenue, and net profit are expected to double in 2021. .
Not only Binance, but also Coinbase will benefit.
At the end of February 2020, the clearing price of Coinbase was US$373 per share. Based on this calculation, its implied valuation is about US$100.3 billion, which is nearly 75% higher than the first average settlement price of US$200 a month ago. , And the first batch of 75,000 shares were sold out on the same day.
Coinbase is listed, Binance has a global layout, and the leading exchange is going mainstream?
Almost all blockchain entrepreneurs are rejoicing in the listing of Coinbase.
This means that the traditional financial market with strict access control has recognized the mainstream and legal status of digital currency and digital currency exchanges.
Although Binance has no IPO plan for the time being, CZ is also happy to see Coinbase go public. "Coinbase has a high probability of success in listing, which is a recognition for the industry; after its success, it is equivalent to the SEC opening a fan to the entire industry. Door; users’ trust in the exchange will be greatly improved."
Coinbase was able to knock on the door of the SEC because it has been cautiously cooperating with US regulators, and compliance ultimately brought it a higher premium.
Binance came from behind and became the world's largest cryptocurrency exchange. It is also related to the establishment of a global compliance network . For non-compliant platforms, supervision is a killer, and for compliance platforms , Supervision is the starting platform.
On September 4, 2017, Binance had just been established for two months, and the 94 regulatory new policy that shocked the industry fell. At that time, many domestic exchanges were in chaos, and Binance, the latest establishment, was the first to respond to supervision.
Two days later, on September 6, Binance’s official website announced that it would suspend the deposit and withdrawal of certain currencies and restrict all mainland China IP transactions, which will take effect after the system upgrade at 0:00 Beijing time on September 7th. At the same time, the compliance actions of other domestic exchanges were "long overdue" after the end of September.
The lightning-fast compliance upgrade also allowed Binance to circumvent the huge shock wave of the 94 New Deal.
Compliance is the initiative of Binance.
As early as the beginning of its business, CZ has put compliance high above its head, "Binance has never been growing first and then complying. Binance has been developing in compliance."
Up to now, Binance has built the world's largest compliance network, with users covering 180 countries and regions and supporting 19 languages.
In March 2020, Binance obtained the PSA exemption license from the Monetary Authority of Singapore; in May, Binance invested in Tokocrypto, Indonesia's leading compliant crypto asset trading platform; in September, the compliance platform Binance Turkey was launched; Binance also complied with Germany Encrypted asset management and brokerage service investment company CM-Equity AG cooperates to operate in compliance in the European market; Binance America has so far obtained MTL licenses in 37 states and so on.
The accelerated globalization of Binance has also become an isolation zone for its hedging policy risks.
Since blockchain and Bitcoin are borderless, exchanges are naturally a global market.
Once all the bets are placed on the single market, it means that once the policy changes, the exchange will be quite passive. Under the globalized layout, with the sunrise in the east and the rain in the west, the exchange has more room for maneuvering and coping; it also has more confidence to cooperate with the tightening of supervision of the single market .
Compliance also allows many traditional mainstream financial giants to dispel their worries and are willing to give the green light of cooperation and co-creation. Binance can leverage its strength to accelerate its entry into the mainstream life of the masses.
The cooperation with Visa, the world's largest clearing giant, is a typical case.
In March 2020, Binance launched the Binance Visa card program for the first time. Only 4 months later, Binance's physical Visa card was launched in Europe. It can be paid in cryptocurrency at more than 60 million merchants around the world, and can be used for travel and shopping, etc. Wait.
Previously, there was a clear separation between digital currency and physical business, and the boundary was insurmountable. With the Binance Visa card, digital assets and the world of legal currency were integrated and linked.
"It can be used anywhere in the world where VISA cards can be swiped." CZ specifically emphasized that its services are expected to cover the North American market soon.
Taking the opportunity to lay eggs is not the end, and Binance has also started to build its own channels. On January 29, the Binance Pay beta version was launched, allowing users to directly use cryptocurrency to make payments. Previously, exchange accounts only had investment attributes, and their consumption functions will also be highlighted in the future.
Therefore, compliance is not only about the bottom line of the exchange’s survival and death, but also about the exchange’s breaking through the ceiling-the more compliant, the greater the development space, and the non-compliance, the more constrained the living space.
How to revaluate the exchange value?
The listing of Coinbase and the rise of Defi also provided a new yardstick for revaluing the exchange's value.
According to the analysis report of the cryptocurrency market website CoinMarketCap, based on traffic, liquidity, trading volume, and confidence in the rationality of the reported trading volume, among the rankings of cryptocurrency spot exchanges, the currency arrangement ranks first, and its The 24-hour transaction volume is almost 8 times that of Coinbase-to some extent, Binance is equivalent to the large Coinbase.
However, unlike Coinbase's eagerness to go public, Binance does not intend to go public for the time being. The only value carrier for Binance is Binance Exchange's token "BNB" (similar to brokerage stocks).
A year ago, the price of BNB was only US$20. At that time, in an online AMA, Binance co-founder He Yi said, "BNB is greater than Binance"!
He Yi’s confidence is that BNB not only carries the value flow of Binance’s entire platform ecology, but also begins to extend the application and payment of Binance ecology, "the future even feeds Binance itself", just like Ant Financial does to Taobao e-commerce. Same business.
When He Yi made his appeal, there were many doubts in the industry and outside the industry at that time, but a year later, the price of BNB broke the $100 mark, and it skyrocketed about six or seven times in February this year alone.
At present, the market value of BNB has become the third largest global digital currency after Bitcoin and Ethereum, with a market value approaching US$40 billion.
Another challenge facing the global cryptocurrency centralized exchange (CEX) is the rise of DEX (decentralized exchange).
The difference between the two is that in the links of deposit and withdrawal, order placement, order matching, fund settlement and withdrawal, CEX is matched by the trading platform itself, represented by Binance, etc.; DEX puts all the above links on the chain. , All operations are performed by smart contracts, and the transaction process does not rely on the endorsement of a trusted third-party platform.
On the whole, DEX has obvious security advantages over CEX. However, the current performance of the underlying public chain severely restricts the development of DEX, resulting in a user experience that is much lower than CEX. Therefore, at present, DEX and CEX have their own merits. Who will occupy the home field in the future? There is no conclusion.
But both are indispensable, but it is a consensus, "I am not the only DeFiist, I am not the biggest Amway person in CEX, I just believe that they play different roles in our ecosystem, and they are both important", CZ So determined.
From the second half of 2020, DeFi began to break through. From the very beginning, Ethereum "singled alone"-At present, Ethereum is already the second largest digital currency in market value after Bitcoin; and then to the successive additions of various public chains. , The market has gradually formed an ecological integration. Binance Smart Chain (BSC), which was listed in September 2020, is also one of them.
On the one hand, BSC almost fully uses the infrastructure of Ethereum to achieve the effect of being compatible with the Ethereum EVM, allowing developers to quickly migrate their projects from Ethereum.
On the other hand, as a latecomer, BSC can circumvent some inherent shortcomings of Ethereum.
For example, Ethereum’s recognized development bottleneck is network congestion and high transaction costs, while Binance’s public chain BSC is cheaper, faster, and more efficient.
Holding the two banners of CeFi and DeFi, Binance has established a hedging mechanism to avoid betting on the wrong treasure and choosing the wrong path.
Therefore, BSC is roughly equivalent to a "refreshed" Ethereum. As a latecomer, BSC has a gap with the "Defi King" Ethereum in terms of lock-up funds, number of popular projects, and overall market value. One of the most powerful competitors.
As of February 2, BSC ushered in 1 million unique addresses; on February 19, the 24 hour trading volume of DEX PancakeSwap, the largest in the BSC ecosystem, reached 1.95 billion U.S. dollars, and reached the top of the decentralized exchange trading volume rankings. , And the 24-hour transaction volume of the largest DEX Uniswap on the Ethereum platform is 1.29 billion U.S. dollars; recently, the daily transaction processing volume of BSC's chain exceeded 1.66 million, which has exceeded Ethereum.
In summary, to a certain extent, Binance is equivalent to the "Coinbase+ETH" of a few big numbers.
On the other hand, mainstream financial institutions' "black-to-fashion" of digital currencies will also increase the valuation of exchanges.
Even risk aversion, the pursuit of prudent insurance funds, pension funds, and even national sovereign funds have begun to feel that digital currency is "really fragrant."
The American insurance giant MassMutual purchased $100 million in Bitcoin in December 2020. The Norwegian government pension fund, the world's largest sovereign wealth fund with a scale of over US$1 trillion, indirectly holds 577.6 bitcoins.
Nikolaos Panigirtzoglou, managing director of JP Morgan Chase, judged that as other insurance companies and pension funds follow the example of MassMutual Insurance, the demand for Bitcoin will increase in the next few years.
Those conservative traditional financial institutions have also opened their doors.
According to the Wall Street Journal, in May 2020, JPMorgan Chase began to provide banking services to crypto exchanges Coinbase and Gemini for the first time. In the past, due to compliance concerns, banks have always stayed away from digital currency exchanges.
The "Bloomberg Encryption Outlook" March report believes that Bitcoin is transforming from a speculative risk asset to a global store of digital value. It is replacing the "old" reserve assets and becoming a powerful supplement to the U.S. dollar. This also means that the future will There are more and more institutions that will include Bitcoin in their asset market.
The above report even boldly concluded that "US$100,000 may be the next price threshold for Bitcoin." A report released by Goldman Sachs on March 8 also predicts that the price of Bitcoin will exceed $100,000 during the year.
In short, the world war of cryptocurrency exchanges has just come to the midfield. The final moment of the decisive battle is far from coming, but the signs of victory and defeat have already begun.