Market Report

Binance rakes in 446 million USD in profit last year despite crypto winter



Binance, Like Coinbase, Outperformed 2018’s Crypto (Nuclear) Winter Crypto heroes

The world’s largest cryptocurrency exchange, Binance, raked in nearly 500 million USD in profit last year despite the bear market. The Block compiled that Binance made 446 million USD in profit last year, just shy of the 500 million USD the exchange had expected.

Binance makes a profit despite the bear market

The Block looked into Binance’s finances, deduced and procured through publicly-available statics, and concluded that the exchange made 446 million USD in profit last year. Even though the profit recorded is not as impressive as the 201 million USD Binance made in the fourth-quarter of 2017, it still performed excellently considering the crypto market has lost more than 70 percent of its value.

The profit recorded by Binance is impressive considering it was launched barely two years ago and has no venture funding. However, Binance’s profits have been on the decline since the second quarter of 2018.

In the second quarter of 2018, Binance, headed by Changpeng Zhao, made 166 million USD in profit. The profit plunged to 80.9 million USD in the third quarter, then 49.6 million USD in the last quarter of 2018. The company has been operational for six quarters now, and has brought in approximately 655 million USD in profit.

The data compiled showed that roughly 71 percent of annual profits generated last year occurred in the first half of the year. The decline in profit coincided with a decrease in trading volume, which has been felt by all crypto exchanges. In October, Binance began to donate listing fees to charity, and this could have affected its fourth-quarter earnings.

Despite the declining profits, many would argue that Binance is performing excellently. In August, Dovey Wan, a crypto-friendly partner at Primitive Ventures, pointed out that Binance outperformed Deutsche Bank in the first quarter of 2018.

Binance has continued to expand its services. In the recent weeks, Binance relaunched its Launchpad program, introduced payment using credit and debit cards, started an over-the-counter trading desk, and launched some fiat-to-crypto exchanges.

Coinbase might have rivaled Binance

It is speculated that one crypto exchange has challenged Binance in terms of profits last year. The San Francisco-based Coinbase exchange expected to record 456 million USD in profit last year, according to a document reviewed by Bloomberg. However, it is still unknown if Coinbase was able to hit its target.

Coinbase recently made the Forbes’ fintech top 50 list. In the fourth quarter of 2018, the company secured 300 million USD in funding from Tiger Global, Y Combinator, A16Z, Polychain Cap, and some other crypto-friendly venture groups. Coinbase is now considered as the most valuable company in the Bitcoin ecosystem after being valued at 8 billion USD.

Coinbase has been focusing on expanding its services globally, rolling out institutional services and launching more crypto products. The exchange recently added support for Circle-backed USD Coin, a revamped version of Earn, PayPal withdrawals, and crypto-to-crypto trading, amongst others.

Coinbase also added numerous crypto assets to its platforms, including ZCash (ZEC), Basic Attention Token (BAT), Maker (MKR), and 0x (ZRX).

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