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BNB Smart Chain Shines In Q1: Triple-Digit Surges In Key Metrics

The Binance Smart Chain (BNB Chain), developed by the world’s largest cryptocurrency exchange by trading volume, Binance, experienced significant growth and performance in the first quarter (Q1) of 2024. 

As highlighted in a recent report by Messari, Binance Smart Chain has surged in market cap, revenue, average daily active addresses, decentralized finance (DeFi), total value locked (TVL), and average daily decentralized exchange (DEX) volume. 

BNB Outperforms Bitcoin In Q1 2024

During Q1 2024, BNB Smart Chain demonstrated notable market cap growth, soaring by 89% quarter-over-quarter (QoQ). It reached a market cap of $92.5 billion, securing the third position among all tokens, excluding stablecoins. Only Ethereum (ETH) and Bitcoin (BTC) surpassed BNB in market cap. 

Interestingly, the report notes that BNB’s performance surpassed that of Bitcoin, which saw a 65% increase in outstanding market capitalization over the same period.

BNB

Revenue generated by the Binance Smart Chain experienced a substantial boost in Q1. The network collected $66.8 million in revenue, marking a 70% QoQ increase. 

According to Messari, this surge in revenue was primarily driven by the appreciation of BNB’s price. Notably, Q1’s revenue exceeded that of any quarter in 2023. DeFi transactions, particularly gas fees, were significant in revenue contributions, accounting for 46% of the total.

Despite a slight decrease in average daily transactions, BNB Smart Chain experienced a 27% year-over-year (YoY) increase, demonstrating sustained growth in network activity. 

Average daily active addresses surged by 26% QoQ, reaching 1.3 million. Several protocols on the BNB Smart Chain witnessed increased transaction volumes and active addresses, with Tether’s USDT and decentralized exchange (DEX) PancakeSwap leading the way.

DEX Trading Volume Explodes

BNB Smart Chain’s DeFi TVL, denominated in USD, experienced a 67% QoQ surge, reaching $7.2 billion. This growth positioned the Binance Smart Chain as the third-highest chain regarding DeFi TVL, denominated in USD. 

However, when denominated in BNB, TVL decreased slightly by 12%. This indicates that the surge in USD value was primarily driven by BNB price appreciation and capital inflows.

BNB

Decentralized exchanges on the Binance Smart Chain witnessed a staggering 193% QoQ increase in average daily trading volume. The total DEX volume for Q1 reached $1.1 billion, with PancakeSwap emerging as the dominant DEX on the platform. 

PancakeSwap’s average daily DEX volume surged by 140% QoQ, surpassing other competitors and solidifying its position as the preferred DEX on the BNB Smart Chain.

Overall, Binance Smart Chain’s performance in the first quarter of 2024 showed significant growth across various parameters, reinforcing its position as an important blockchain platform. 

BNB

The exchange’s native token, Binance Coin, is currently trading at $607, reflecting a 2% price increase over the past 24 hours and a 10% increase over the past 7 days. 

These positive price movements bring the token closer to its all-time high of $686, reached in May 2021.

Featured image from Shutterstock, chart from TradingView.com

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BNB Price Soars As Binance Smart Chain Implements “BEP 336” Upgrade, Inspired By Ethereum’s Dencun

Binance Smart Chain (BSC), commonly known as BNB Chain, has announced the “BEP 336 upgrade”, inspired by Ethereum’s Dencun upgrade (EIP 4844), which aims to optimize data storage and processing on the blockchain.

The upgrade is expected to significantly reduce transaction costs, improve network performance, and drive the price of Binance Coin (BNB) towards its previous all-time high (ATH) of $686, reached in May 2021.

BNB Smart Chain Cost-Effective Data Solution

According to the protocol’s announcement, BEP 336 introduces an innovative concept called “Blob-Carrying Transactions” (BlobTx) that will change how large data blocks are handled. 

These temporary and cost-effective memory segments, known as blobs, can capture data blocks as large as 128 KB. By streamlining the transaction verification process, the network only needs to verify that the attached blob contains the correct data rather than verifying each transaction within a block.

The introduction of blob transactions within the BSC, which is particularly beneficial for opBNB – the layer 2 network of the BNB ecosystem – offers several advantages. Blobs reduce network space consumption, resulting in lower storage costs and more affordable gas fees for users, similar to Etherem’s Dencun upgrade. This storage strategy allows for efficient data handling while managing blockchain bloat, ensuring data integrity and availability throughout its lifetime on the chain.

BEP 336 also includes two additional components. The Blob Market establishes a fee market for blobs, ensuring regulated storage and transmission costs based on network demand. The Precompile Contract adds a layer of security by verifying that the data in a blob matches the reference in the blob-bearing transaction.

While BEP 336 draws inspiration from Ethereum’s EIP 4844, it is tailored to meet BSC’s unique requirements. Notably, BSC’s design mandates that blobs be managed exclusively by the BSC client, distinguishing it from Ethereum’s approach. Moreover, BSC implements a dynamic gas pricing mechanism for blobs, ensuring reasonable transaction costs with minimum and maximum thresholds.

BEP 336 Integration With Phased Roadmap

BSC has outlined a phased roadmap for the integration of BEP 336. Beginning with the Testnet launch in April, developers can test and interact with the upgrade in a “controlled environment” to address potential issues. 

The subsequent Magnet phase in May will focus on further testing and optimization to ensure the “robustness” and “scalability” of BEP 336. Finally, in June, the mainnet hard fork will mark the official deployment of BEP 336 on the BSC mainnet, ushering in a new era of efficiency and cost-effectiveness for the network.

According to the announcement, the benefits of BEP 336 are expected to impact developers and users within the BSC ecosystem significantly. Gas fees will be reduced considerably as certain data types no longer require permanent storage, making transactions more affordable. 

The temporary storage mechanism will keep the blockchain lean and bloat-free, enhancing overall network performance. With lower costs and improved efficiency, BEP 336 aims to make the BSC ecosystem more accessible to a wider audience, including developers and newcomers to blockchain technology.

BNB

The announcement has boosted Binance Coin’s (BNB) price by over 8%, resulting in a current trading price of $588, just 15% below its all-time high of $686. 

In case of further price gains, the next resistance walls for the BNB price are placed at the $600 level and the $608 mark, which could prevent the token from further price appreciation in its mission to reach its current ATH. 

Featured image from Shutterstock, chart from TradingView.com

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BNB Quarterly Burning: Over 2 Million Tokens Vanish, Valued At $636 Million

In a recent announcement by Binance, the BNB Foundation declared the successful completion of the 26th quarterly Binance Coin token burn through the BNB Chain. The burn, which included Auto-Burn and the Pioneer Burn Program, eliminated a significant amount of the exchange’s native token from circulation. 

BEP95 Initiative Results In 210K BNB Permanently Burned

During this latest burn event, the Auto-Burn process removed 2,141,487.27 BNB from circulation, equivalent to approximately $636 million in USD. 

It is worth noting that the Auto-Burn mechanism operates independently of Binance’s centralized exchange (CEX), providing an auditable and objective process, according to the exchange’s statement. 

Additionally, the Pioneer Burn Program contributed by removing 1542.15 tokens from circulation. This program permanently eliminates an amount of BNB equal to the provable lost funds of eligible users. 

Since the introduction of BEP95, an estimated 210,000 tokens have been permanently burned under this mechanism. As announced, the Pioneer Burn Program helps maintain the integrity of the ecosystem and ensures that lost funds do not influence the circulating supply.

Furthermore, BNB Chain’s Real-Time-Burn mechanism continuously reduces the token supply. This mechanism enables burning a portion of BNB Chain’s gas fees in real-time, further contributing to the ongoing supply reduction efforts.

Completing the 26th quarterly BNB token burn marks another significant milestone for the BNB ecosystem. The independent Auto-Burn mechanism, combined with the Pioneer Burn Program and Real-Time-Burn mechanism, showcases BNB Chain’s approach to reducing token supply and fostering long-term value. 

Robust User Adoption

In addition to its quarterly token burn, BNB has recently displayed notable strength and progress, as revealed by Token Terminal’s on-chain data. 

With a circulating market cap of $47.86 billion, BNB Chain has experienced a 30.45% increase in market capitalization. This surge in value reflects the growing confidence and demand for the token among investors. 

BNB Chain’s financial metrics are equally impressive. The platform has witnessed a revenue growth of 30.47% over the past 30 days, generating $1.72 million in revenue during this period, as seen in the chart below. 

Binance BNB BNBUSDT

Extrapolating this data to an annualized basis, the chain’s revenue is noteworthy at $20.96 million, reflecting solid financial stability and sustainable growth.

The data from Token Terminal also highlights BNB Chain’s increasing user adoption and developer activity. The platform has seen a surge in active daily users, with a 30-day average of 1.42 million, representing a robust 48.6% growth. 

The Binance Coin price performance has been steady, with a 2.14% decrease over the past 24 hours, while showing a positive trend over more extended periods. 

The token recorded a 4.38% increase in the past seven days, and over the past 30 days, it achieved an impressive growth of 30.51%. Furthermore, BNB’s performance over the past 180 days has been significant, with a growth rate of 29.92%.

BNB

Featured image from Shutterstock, chart from TradingView.com

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Binance 2023 Report Reveals: 40 Million New Users Added, Total Registered Users Reach 170 Million

In its recently released 2023 review report, Binance, the world’s leading cryptocurrency exchange, showcased significant growth despite facing legal disputes and regulatory scrutiny. 

The report highlighted the evolving crypto market, increasing institutional interest, and the company’s commitment to compliance and user experience.

Binance’s 2023 Review

Despite a volatile year for the market, Binance emphasized that digital asset regulation had taken a direction toward greater clarity and harmonization in some regions. 

The exchange acknowledged the challenges but noted that Web3 adoption and institutional interest continued to grow steadily, demonstrating the industry’s resilience and long-term potential.

Regarding growth within the company, Binance Square, formerly known as Binance Feed, was introduced as a social platform designed to be the central hub for Web3 content. 

According to the report, the platform experienced substantial growth, expanding from 1,200 to 11,000 creators and attracting over 1.6 million active daily users. Binance Square aimed to facilitate conversations and enable users to generate “compelling content,” fostering engagement within the Web3 community.

In October, Binance Futures launched its Copy Trading feature, allowing users to replicate the trading strategies of expert lead traders. This feature provided a monetization avenue for trading experts and added a social aspect to the trading experience of the platform users.

Binance

Furthermore, Binance continued its support of fiat currencies, reaching 69 supported fiat currencies with 30 fiat channels available globally. 

Binance P2P, the peer-to-peer trading platform, expanded the number of supported payment methods to 970 and fiat currencies to 112. The report highlights that the platform facilitated 18% more trades with 39% more users than the previous year.

The report further noted Binance’s commitment to compliance, with a significant investment of $213 million in its compliance program, a 35% increase from the previous year. 

Binance allocated substantial resources to develop in-house compliance tools, including a case management system and an internal transaction monitoring engine. 

Is Binance Leading The Way In Crypto Venture Funding?

Per the report, in 2023, Binance focused on enhancing user experience by partnering with localized KYC (know-your-customer) vendors and implementing various electronic ID (eID) solutions globally. 

The exchange added support for 298 new ID and proof-of-address documents across 64 countries, streamlining the onboarding process for users.

To make Web3 “more accessible,” the report notes that Binance launched its Web3 Wallet, which aims to provide a “secure” gateway into the world of decentralized finance (DeFi). The platform aimed to address usability barriers and attract new users by offering improved product and user experience across DeFi, blockchain gaming, and SocialFi.

Ultimately, while the crypto venture funding market faced challenges in 2023, Binance Labs emerged as one of the most active participants in the crypto venture capital (VC) space, particularly in the DeFi and Web3 gaming sectors, according to the exchange.

Overall, Binance’s 2023 Review Report highlights the company’s focus on compliance, user experience, and expanding Web3 offerings as key to continued growth despite ongoing legal issues and regulatory enforcement actions.

Binance

As of the current update, Binance Coin (BNB) demonstrates a significant upward trend in price action, surging to $330. This surge represents a 21% increase over the past seven days.

Featured image from Shutterstock, chart from TradingView.com 

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Binance Coin (BNB) Blazes Ahead: Predictions Point To New All-Time Highs In First Half Of 2024

Binance Coin (BNB), despite experiencing a significant decline earlier this year due to market volatility and the SEC lawsuit against Binance and its founder Changpeng Zhao (CZ), has shown remarkable recovery and promising prospects. 

Recent data indicates a resurgence in the BNB price, driven by the growing usage of decentralized applications (DApps) on the Binance Smart Chain (BSC). 

Additionally, BNB’s fundamentals, including impressive market cap figures and increased revenue, further contribute to the positive momentum. 

BNB Price Rally Fueled By DApp Adoption? 

After witnessing a sharp decline from its yearly high of $350, BNB experienced a drop to the $203 level following the SEC lawsuit against Binance and CZ. However, recent price movements show signs of recovery and bullish sentiment. 

Over the past 24 hours, BNB has gained 4.5%, and its performance in the seven, fourteen, and thirty-day time frames demonstrates an upward trend, with gains of 20%, 24%, and 38%, respectively.

One of the driving factors behind BNB’s price rally is the increasing use of DApps on the Binance Smart Chain. Data from DappRadar reveals a surge in DApp volume, currently at $4.83 billion, representing a 12% increase. 

The BNB chain boasts an ecosystem of 5,120 DApps and has recorded 4.89 million transactions, reflecting a 12.73% surge in the past seven days. These figures indicate a growing demand for BNB as it serves as the primary token within the BSC ecosystem.

BNB

Comparing BNB to Ethereum (ETH), DappRadar data highlights BNB’s superior performance in various indicators such as contracts, total unique active wallets (UAW), decentralized finance (DeFi) total value locked (TVL), and non-fungible token (NFT) volume. 

The BNB chain has held the top position over the past 24 hours, showcasing its usage and adoption. This outperformance contributes to the positive market sentiment surrounding BNB and bolsters its price.

Binance Coin Market Cap Surges To $48 Billion

Further boosting the Binance Coin prospects, Token Terminal data reveals impressive market cap figures for BNB, with a circulating market cap of $48.02 billion, marking a 14.18% increase. 

Additionally, BNB’s fully diluted market cap stands at the same value, reflecting a 28.32% growth. The revenue generated by BNB in the past 30 days has increased by 28.51%, reaching $1.47 million. 

Furthermore, BNB has recorded significant fee growth, with a 27.98% fee increase over the past 30 days and an annualized revenue of $187.56 million. These fundamentals contribute to the positive sentiment surrounding BNB.

Overall, Binance Coin has staged a strong recovery, demonstrating a notable price rally driven by the increasing usage of DApps on the Binance Smart Chain. However, there is a bold prediction by a crypto analyst that could further boost the sentiment and excitement surrounding the token.

Binance Coin To Reach New Yearly High? 

According to Captain Faibik, a prominent crypto analyst on X (formerly Twitter), Binance Coin is poised to achieve a new yearly high in the first half of 2024. 

This prediction is based on an analysis of BNB’s 1-week chart, revealing a breakout from a descending triangle pattern, signaling the end of the macro downtrend and initiating a new uptrend phase for BNB.

Looking at the chart below, Faibik suggests that BNB’s price could potentially experience an impressive uptrend of 171% in the initial weeks of 2024. This surge would propel the token’s price above the current all-time high (ATH) of $686. 

BNB

However, several resistance levels must be overcome for this projection to materialize. Notably, at the current trading price of $307, BNB faces a significant seven-month resistance barrier, which currently hinders its ascent to the $314 level, the next resistance level in the near term. 

Analyzing the 1-day chart, it becomes evident that reaching the all-time high level would require surpassing additional macro resistance levels, including $329, $402, $450, $563, $607, $639, and $653.

While the theory proposed by Faibik holds promise, the actual realization of Binance Coin’s new yearly high in the early months of 2024, along with a sustained uptrend, remains to be observed. 

BNB

Featured image from Shutterstock, chart from TradingView.com 

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BNB Price Faces Critical Juncture: Head-And-Shoulders Breakout Or Bearish Dip Below $200?

The Binance Coin (BNB) price is crucial as market analysts offer differing viewpoints on the cryptocurrency’s potential direction. While one analyst presents a bullish case, anticipating a breakout and surge beyond $300, another raises concerns about a dip below $200.

BNB Price Analysis

Crypto analyst Ali Martinez suggests that BNB price could be on the verge of breaking out of a head-and-shoulders pattern. 

Martinez emphasizes the significance of a sustained close above $261, which could catalyze BNB’s upward trajectory toward $310. With a 2.9% gain over the past 24 hours and a 12% uptrend in the last fourteen days, the recent price action aligns with Martinez’s breakout thesis.

BNB Price

Martinez analyzes the 1-day chart and identifies the $257 level as a crucial breakout point, signaling a potential shift in trend. 

If the sustained uptrend continues, BNB’s price could see a substantial 19.8% gain shortly, pushing the price toward $310. This projection remains just below BNB’s yearly high of $350 in April.

However, contrasting this bullish outlook, Daan de Rover, a crypto analyst, and YouTuber, highlights BNB’s downtrend structure in the 1-week chart. 

Bearish Outlook For Binance Coin

According to de Rover, the current BNB price action “looks weak,” raising concerns about the currency’s possible continuation of its downward trajectory, which began earlier this year. 

The analyst points to the “green box” on the 1-week chart, as seen in the graphic below, as a critical support level. If breached, it could lead to a deeper decline for BNB, falling below the $200 mark.

BNB Price

De Rover’s cautious view is further emphasized by the fact that dropping below $200 would mark a level not breached since the bear market and crypto winter. 

BNB Chain Records Positive Growth 

According to Token Terminal data, the circulating market cap of BNB stands at $39.83 billion, with a slight decrease of 1.56% observed. However, it is important to note that the fully diluted market cap remains the same at $39.83 billion, indicating a stable valuation for the cryptocurrency. 

BNB has witnessed a positive revenue trend, with a 30.37% increase in annualized revenue, reaching $16.46 million. The 30-day revenue figure also shows growth at $1.35 million, representing a 21.33% increase.

When assessing profitability ratios, the price-to-fully-diluted ratio (P/F) currently stands at 281.75x, indicating the market’s confidence in BNB’s potential. While there has been a slight decline of 18.2% in this ratio, it remains relatively high. 

The price-to-sales ratio (P/S) is also noteworthy, reaching 2,962.98x, although it has experienced a decline of 18.5%.

BNB Chain has seen a positive trend regarding fees generated, with a 30-day increase of 20.92% to $14.22 million. The annualized fees have grown substantially, reaching $173.07 million, a significant 30.15% increase. 

The future trajectory of the BNB price and its underlying blockchain remains uncertain. Whether the cryptocurrency will experience continued growth or succumb to a bearish sentiment is yet to be determined.

BNB Price

Featured image from Shutterstock, chart from TradingView.com

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BNB Plummets 10% Amid Binance’s $4.3 Billion Settlement And CEO’s Impending Resignation

Binance Coin (BNB), the native token of the Binance cryptocurrency exchange, has experienced a sharp decline of 10% following reports that Binance is preparing to settle criminal charges with the US Department of Justice (DOJ) through a $4.3 billion fine. 

Binance CEO To Plead Guilty

The Wall Street Journal has disclosed that Binance CEO Changpeng Zhao (CZ), commonly known as CZ, will plead guilty to violating criminal anti-money laundering requirements. 

Concurrently, Binance will also plead guilty to a criminal charge related to anti-money laundering violations, resulting in a significant fine. Furthermore, CZ is expected to step down as CEO, with Richard Teng being considered as a potential successor.

Changpeng Zhao is scheduled to appear before a federal court in Seattle to enter his guilty plea. This crucial legal step can further impact BNB’s price action as investors assess the implications of CZ’s admission of guilt regarding violating anti-money laundering requirements. 

The reported settlement involves Binance pleading guilty to a criminal charge related to anti-money laundering violations, leading to a hefty $4.3 billion fine. This substantial sum encompasses payments to settle civil allegations made by regulators. 

These developments occur in an increasingly stringent regulatory environment in the cryptocurrency industry. The recent charges brought by the SEC against Kraken further highlight the regulatory scrutiny faced by industry players. 

Additionally, market participants anticipate significant enforcement actions by the DOJ, which adds to the atmosphere of uncertainty and apprehension.

Will CZ’s Statement Halt BNB Downtrend? 

Despite the shocking revelation surrounding Binance’s leadership and its impact on the crypto community, there may still be hopes for a potential recovery of Binance Coin and the overall crypto market as the case reaches its conclusion.

With CZ reaching a settlement with the US Department of Justice (DOJ) and pleading guilty to criminal charges, the exchange can breathe a sigh of relief, knowing that regulatory agencies have addressed their concerns and potential legal action.

Furthermore, this settlement could be seen as a victory for regulators, particularly in light of the ongoing legal battles between the US Securities and Exchange Commission (SEC) and Ripple Labs, which involve the cryptocurrency XRP. 

A favorable outcome in these cases could potentially boost confidence in the broader crypto industry and drive prices higher.

BNB

Currently, BNB is trading at $240, showing signs of recovery from its recent drop, which briefly touched $235 but managed to stay above the critical support level of $232. 

In further declines, BNB bulls will need to hold the support levels at $228, $217, and $214 to prevent the token from dropping below the critical level of $200.

However, suppose Changpeng Zhao and the new Binance CEO can provide a statement that reassures the community and instills a sense of calm. In that case, it may bring a renewed positive sentiment and potentially halt the current downtrend for BNB.

The unfolding of the situation, the next steps for the exchange, and CZ’s fate remain to be seen. The community and market participants eagerly await further developments and announcements shaping the future of Binance and its native token, BNB.

Featured image from Shutterstock, chart from TradingView.com 

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BNB Chain Q3 Revenue Takes A Hit: Fees Plummet By 40%

In a recent report by Messari, the analysis sheds light on the developments and challenges faced by Binance Chain (BNB), the blockchain created by Binance, the world’s largest cryptocurrency exchange regarding trading volume. 

The report highlights the separation of BNB Chain from Binance and various events and allegations that have impacted Binance and its associated entities throughout the third quarter of 2023.

Binance Chain Separation And Challenges

The Messari report emphasizes that BNB Chain has distinguished itself as an independent entity separate from Binance despite its origins as a product of the largest centralized cryptocurrency exchange. However, the market has not fully recognized this separation, leading to a lack of distinction between BNB Chain and Binance.

During the third quarter, Binance encountered numerous challenges, including losing partnerships, shutting down lines of business, conducting layoffs, and facing accusations of violating sanctions. 

BNB Chain

These events coincided with a downward pressure on the value of BNB, which experienced a 25% decline compared to the previous quarter. In contrast, the cryptocurrency market dropped by 9% during the same period.

The Messari report mentions that Binance, including its subsidiary Binance.US, was accused by the Securities and Exchange Commission (SEC) of engaging in unregistered offers and sales of “crypto securities”, including BNB. 

These allegations further added to the challenges faced by Binance and its associated entities during the third quarter.

BNB Chain Performance And On-chain Activity

Despite the challenges, BNB maintained its position as the fourth-largest cryptocurrency by market capitalization, with a market cap of $35.3 billion. The circulating supply of BNB decreased by 1.3% in the third quarter due to the token-burning mechanism employed by BNB Chain.

The report also highlights the impact of adverse events on BNB Chain’s on-chain activity. BNB Smart Chain’s revenue, measured in BNB, fell in line with the decline in BNB’s market cap, indicating a decrease in activity on the Binance Smart Chain (BSC). Daily transactions (-14%) and average fees (-12) in BNB also experienced declines during this period.

BNB Chain offers staking opportunities for cryptocurrencies such as Ethereum (ETH), BNB, Cardano (ADA), and others. The report notes that the total stake and eligible supply declined by 3% and 2%, respectively, while the average annualized staking yield decreased from 2.6% to 2.1% during the third quarter.

BNB Chain

The DeFi sector on the BNB Chain demonstrated strength compared to other sectors. The NFT space experienced increased secondary sales volume, unique buyers, and sellers. 

However, stablecoin transfers and GameFi experienced declines in volume. The report suggests that newer applications on BSC may have influenced the growth of unique buyers and sellers in the NFT sector.

Ultimately, the Messari report provides insights into the separation of BNB Chain from Binance and the challenges faced by Binance and its associated entities during the third quarter of 2023. 

Despite these challenges, BNB Chain maintained its market capitalization and continued to launch new products and implement technical upgrades. The report highlights the need for market recognition of the separation between BNB Chain and Binance and the impact of adverse events on BNB Chain’s on-chain activity.

BNB Chain

On the other hand, BNB has experienced a prolonged downtrend since reaching its annual peak of $350 in April. Subsequently, the token plummeted to $202 on October 9. 

However, recent developments have resulted in a positive trend, with BNB recording a profit of 5.2% in the past 14 days and 1.8% in the last 30 days. As a result, the current trading price of BNB stands at $223.

Featured image from Shutterstock, chart from TradingView.com 

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Binance Founder CZ’s Fortunes Plummet By $12 Billion Amidst Downturn in Crypto Trading

Changpeng Zhao, widely known as CZ and the founder of Binance, one of the largest cryptocurrency exchanges, has suffered a significant blow to his fortune. According to a recent Bloomberg report, CZ’s wealth plummeted by $12 billion due to the ongoing slump in crypto-trading activities. 

Per the report, this decline was primarily attributed to a sharp drop in trading volumes at Binance throughout the year.

CZ’s Financial Losses

The Bloomberg Billionaires Index revised its revenue estimates for Binance, slashing it by 38% after data revealed a decline in trading volumes at the exchange. As a result, CZ’s net worth now stands at $17.2 billion, marking a significant reduction from his previous valuation.

According to Bloomberg, CZ’s involvement in recent events that led to the bankruptcy filing of FTX further impacted his financial situation. In November, CZ announced the liquidation of a token linked to FTX (FTT) after reports emerged that Alameda Research, the hedge fund owned by Sam Bankman-Fried, the founder of FTX, held a large position in it. 

The announcement triggered a rush among FTX customers to withdraw funds, overwhelming the exchange’s infrastructure. As a consequence, FTX declared bankruptcy within a week, erasing Bankman-Fried’s fortune, which had peaked at $26 billion in March the previous year.

To estimate Binance’s revenue, the Bloomberg Billionaires Index relies on spot and derivatives trading data from crypto-tracking services Coingecko and Coinpaprika. 

Binance had witnessed a significant gain in market share earlier this year, reaching 62% of total on-exchange crypto trades during the first quarter. However, after a promotional zero-fee period for popular trading pairs ended, Binance’s market share slid to 51% by the end of the third quarter, as reported by research firm CCData.

Binance Value Plunges As Lawsuits And Allegations Take A Toll

Binance has also faced increasing regulatory scrutiny, isolating itself from the traditional financial system. The Securities and Exchange Commission (SEC) filed a lawsuit against Binance in June, accusing the exchange of violating regulations. 

Earlier this year, the Commodity Futures Trading Commission (CFTC) also took legal action against Binance for non-compliance with rules that allowed US users to access the platform. 

Allegations against Binance include inadequate money-laundering controls, inflated trading volumes, and mishandling of client assets. Binance has strongly disputed these claims and is currently contesting them in court. 

In June, Bloomberg’s wealth index reduced the value of Binance’s US exchange to zero after it announced the discontinuation of dollar transactions, resulting in a significant decline in trading volumes. 

Binance.US had previously been valued at $4.7 billion during a funding round in March 2022, while CZ’s net worth peaked at $96 billion in January.

The challenges faced by Binance are not unique, as regulatory uncertainties and rising interest rates have made alternative investments more appealing. Coinbase Global, another leading cryptocurrency exchange, experienced a 52% decline in spot trading volume in the third quarter compared to the previous year, according to Bloomberg. 

Binance

Despite the personal wealth challenges CZ faces, Binance Coin (BNB) has capitalized on the overall market recovery, showcasing substantial gains across various time frames. Currently, the token is trading at $225.2, maintaining its upward trend with a 2.2% increase over the past 24 hours.

Furthermore, BNB has demonstrated significant gains of 5.8%, 9.6%, and 6.1% over the seven, fourteen, and thirty-day time frames, respectively. These positive trends highlight the token’s strong performance in recent weeks.

Featured image from Binance, chart from TradingView.com