In a month that wreaked havoc in the crypto market due to the collapse of ¡®crypto Robinhood¡¯ Sam Bankman-Fried¡¯s FTX, the world¡¯s largest crypto exchange Binance has reasons to smile.?
Amidst the FTX fiasco, which has been followed by multiple crypto firms filing for bankruptcy, Binance saw a substantial boost of 30% in trading activity in November.
The catalyst for the FTX collapse was Binance¡¯s Chief Executive Officer Changpeng ¡°CZ¡± Zhao¡¯s November 6th announcement that the exchange was selling its holdings of FTT because the native token of FTX was too risky. FTX had operated the second-largest spot and derivatives exchanges, as per Bloomberg.
¡°Monthly trade volume jumped by 23% to $705 billion for the largest exchanges in November, bolstered by FTX-related volatility.¡± researcher Kaiko noted in a newsletter this month. ¡°The increase was mainly driven by Binance.¡±
The Bloomberg Galaxy Crypto Index tumbled about 18% in November, and the index is already down about 67% this year, as per the report.
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Crypto investors seeking to pull their funds from FTX sparked the contagion spreading across the crypto industry. Genesis Global Trading warned of bankruptcy if it could not raise enough funding. The difficulties at Genesis prompted crypto exchange Gemini to halt redemptions from its Earn product.?
Last week,?cryptocurrency?lender BlockFi announced that it had filed for Chapter 11?bankruptcy?protection along with eight affiliates in a court in New Jersey.??It cited FTX as its second-largest creditor, with a debt load of $275 million on loans extended earlier this year.
Binance disclosed its assets and wallet addresses where the exchange stores the customers¡¯ funds in an attempt to improve transparency.
¡°Binance may benefit, despite not having an official headquarters, because it has projected an image of strength through the crisis with the best liquidity of any centralized exchange,¡± according to the newsletter, as per Bloomberg report.
Also, the FTX collapse can benefit US-regulated exchanges such as Coinbase and Kraken, which have gone through significant layoffs. Trading volume from the exchanges was on the rise in November as well, while activity on smaller crypto exchanges fell, given the higher volume from users and institutions who have become wary of off-shore exchanges, according to the newsletter.
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