The evolving rivalry between Binance and Coinbase
Although Cryptocurrencies are getting more attention than never before, to the point where new crypto-tokens are available in the market with each passing day, the competition between different cryptocurrency-related services platform has not reduced in any way, rather it has continued to increase. Every other platform is looking for different initiatives with which they can attract more customers and remain the best in the race for the most sought after Cryptocurrency platform of all time. For example, different cryptocurrency exchange platforms like Binance and Huobi have launched their loyalty-building tokens to offer greater discounts to its user base.
Similarly, the rivalry between two of the most well-known cryptocurrency exchange technologies, Binance and Coinbase, has intensified after Binance upped their game to bring its standards at par with Coinbase. Binance recently announced that they will be accepting credit card payments to sell crypto-tokens, a feat that was not possible up till now on its platform. They achieved this through the partnership they build with a payment processing platform known as Simplex. This surprise move by Binance stirred up a competition with the likes of Coinbase, Bitstamp, and other exchanges that provide crypto-tokens in exchange for fiat currencies.
Binance has been in the news during the previous years and has astonished the crypto-markets with its quick success story. Recently, it became the largest crypto exchange in terms of volume and has surpassed different exchanges on its way to the top. Binance security standards has also displaced the likes of Bittrex and Poloniex who were once considered major threats to the coin, and its user-interface and the range of different altcoins offered on the platform has completely outshined them.
What was missing on Binance’s platform up till now was a lack of fiat-crypto trading options only. For example, during the crypto-run of 2017, Coinbase came out to be by far the best performing trading exchange as it supported direct fiat-to-crypto trading. Buyers could easily and instantly buy Bitcoins (and other very limited altcoins) directly form US dollars. However, to buy a range of altcoins, the same Bitcoins were then used on Binance’s website to trade on different altcoin-Bitcoin pairs.
Now, in a masterstroke, Binance has provided direct trading in terms of fiat currencies on its platform, thus eliminating the likes of Coinbase from the loop. The users can find the complete functionality on one platform, from fiat-to-crypto trading to the availability of a large range of altcoins. Surely, this will send down ripples into the crypto-market, pulling more trading volume to Binance’s platform – a process that has been taking place, albeit slowly, since August 2017.
To put things into perspective, Binance shared less than 10 percent of total volume traded in August 2017 among the six largest cryptocurrency exchanges (officially trusted by Blockchain Transparency Institute). This figure swelled up to more than 50 percent in early 2019, leaving behind Bitfinex in second place, with around 20 percent share. Binance’s popularity took a huge positive turn in January 2018, when Bitcoin’s price went downhill and people rushed to invest their money in different altcoins. At that time, Binance was offering a range of altcoins on its platform. Since then, Binance has maintained its spot at number one e and has been on the path of steady growth.
It would not be wrong to say that Binance initially cashed in due to the wide range of altcoins it offered. With the provenance of fiat-to-crypto trading as well, the platform will now be competing in a different marketplace.
Interestingly enough, data suggests that Binance’s credit card transaction fees are lower than that of Coinbase and Bitstamp. Binance will charge a transaction fee of 3.5% or $10, whichever is higher, while Coinbase charges 3.99% of the transaction amount in fees. Bitstamp is a costlier option as it charges 5% of the total transaction (Smith, 2019).
However, it must be noted that the figures provided above apply to transactions being carried out through credit card payments only. At the moment, although Coinbase and Bitstamp both support bank transfer even with outrageous nominal charges, Binance is yet to inculcate that into its platform. Binance does not support bank transfer right now. Bank transfers, however, are a very time-consuming process and are usually not recommended for a fast-moving crypto-market. Credit card payments take less time in processing and might save the buyer a substantial amount of money.
All in all, enabling credit card payments on its platform is a significant leap forward for Binance. With a very happening year for the company, as it launched Binance Jersey and Binance DEX, and acquired TrustWallet, the future looks very promising for the company. Its success is being reflected by the price valuation of its native token BNB, which has recently managed to make its place in the top ten cryptocurrencies by market capitalization.
Smith, K. (2019, February 08). bravenewcoin. Retrieved from bravenewcoin: https://bravenewcoin.com/insights/binance-vs-coinbase-competition-escalates-as-binance-enables-card-payments