Who can become the king of global exchanges?

The listing plan of coinbase was postponed from the end of March to April, but this does not affect that IPO is becoming the capital operation mode of choice for crypto asset trading companies.In March alone, two more platforms revealed their desire to list on NASDAQ.

The rise of bitcoin price has brought about "out of circle" effect. For crypto asset trading platform, it seems to be a good choice to get the favor of mainstream financial markets.

But binance binance, which is regarded by coinbase as a strong rival, has not been attracted to the listing.This platform, which believes in decentralized finance, still focuses on the development of public chain and the expansion of the defi market, and regards "opening" as the other side of the future financial market.Coinbase's puritanical adherence to U.S. financial regulation rules won the IPO opportunity.

Binancebinance has chosen to divide and rule in the crypto asset market: CEX business is distributed globally, and licenses are sought in places with rules. in dex business chain, binance smart chain BSC benchmarking Ethereum, exploring open finance.

As a representative platform for compliance, coinbase has become the wind vane for the listing of crypto asset trading platform.Binancebinance is more original blockchain, demonstrating another development path to the crypto asset exchange industry.

As March is coming to an end, the two super players have brought the format of the crypto asset exchange to different directions, and are also changing the pattern of the global exchange market.

Coinbase is valued at $100 billion and sees binance as a strong enemy

On March 21, the direct listing plan of coinbase, the U.S. cryptocurrency exchange, will be postponed to April, with the original plan of listing on NASDAQ at the end of March, according to the news agency.

The postponement of the listing plan did not affect the market's positive outlook on the value of coinbase.

Prior to that, coinbase disclosed on March 17 that according to the weighted trading price of class A shares in the first quarter of the year at $343.58, the latest private market valuation of class A shares was about $68 billion, nearly 12 times higher than that in the third quarter of last year.

If the total number of shares issued on form S-1 submitted to the securities and Exchange Commission (SEC), that is, coinbase's issued class a common shares, class B common shares and class a common shares planned for public IPO, 300836880 shares have already made its market value in the private market more than 115.7 billion US dollars.

Coinbase under the overvalued value has its revenue support.According to the S-1 form, its revenue in 2020 will be about 1.3 billion US dollars, and in 2019 it will be 530 million US dollars. in 2020, its profit will be about 320 million US dollars, and in 2019, it will have a loss of 30.4 million US dollars.

Such revenues and valuations are inevitably compared with the other three well-known crypto asset trading platforms, binance, firecoin and okex.What makes coinbase most wary is binance, which says in the S-1 table that we also compete with many companies that only focus on the cryptocurrency market and have varying degrees of compliance, "such as binance.」

The tension of coinbase is not hard to understand from the perspective of the camp.According to the previous disclosure made by CZ, the founder of binance, the profit of binance will be between 800 million and 1 billion US dollars in 2020 and 577 million US dollars in 2019.

We media Wu said that according to the evaluation of the blockchain, coinbase's earning power is not only far inferior to binance, but also may not be as good as firecoin and okex. "Of course, the data of the three major exchanges are disclosed by themselves, not the data after audit, which is likely to be exaggerated.」

From the perspective of revenue composition, it is very likely that binance's earning power will surpass coinbase.
The most important source of exchange revenue is the transaction fees paid by users. The number of users, the tradable assets and the trading volume of each asset determine the transaction fees.

From the BTC transactions provided by both coinbase and binance, the trading volume of binance is far higher than that of coinbase.According to coingecko, a third-party data platform, binance generated $4.849 billion of total trading volume in BTC's 24-hour trading volume index on March 30, and coinbase was $1.305 billion.The former is 3.7 times of the latter.

Comparison of binance & coinbase's spot market performance

More trading pairs mean a richer source of transaction fees.The 295 tradable assets on binance constitute 1000 trading pairs, contributing more than 24.725 billion of daily trading volume to binance on March 30. coinbase currently only supports 50 kinds of crypto asset transactions, providing 152 transaction pairs, creating more than $3.322 billion of daily transaction volume.During the same period, the number of visits to binance was more than 154 million, and that of coinbase was 21.05 million.

Coinbase earns limited fees in the spot market for crypto assets.What is more troublesome is that it is strictly controlled by us regulation and cannot expand more profitable derivatives trading products such as futures and options.In the last year or two, binance has expanded its global centralized trading business from the spot market to derivatives trading, and has taken a large share of the market.

According to coinecko data, on March 30, binance's 24-hour position in derivatives trading was $8.434 billion, with trading volume exceeding $41.455 billion. Both indicators ranked first on the list of derivatives trading platforms.
On the track of crypto asset trading platform, coinbase regards binance as a strong enemy.

There are different purposes in dealing with compliance

Coinbase does not want to put more crypto assets and portfolios on the shelves, as it says, "because of our regulatory status in multiple jurisdictions and our commitment to legal and regulatory compliance, we have not been able to offer many popular products and services.」

However, it should be noted that strictly abiding by the financial regulatory rules of the United States is the premise for it to be listed in the US stock market.In other words, if it wants to seek capital operation in the traditional financial market, it must abide by the access rules of that market.

Like Puritans, coinbase abides by the bottom line of financial regulation in the United States. In addition to the anti money laundering requirements, coinbase does not issue Taiwan dollars, does not go beyond the token money that violates the regulatory requirements of the United States, and does not carry out derivative transactions with a lot of thresholds.This regular trading platform finally won the favor of the traditional financial market and issued IPO tickets for it.Once it is listed directly, it will become the real "first stock of crypto assets".

Coinbase did not deviate from its goal of starting from the United States and listing in US stocks.

Different goals lead to different directions.In the past three years, binance, a rival of coinbase, has chosen another path and adopted a more flexible strategy for compliance.In the corresponding centralized trading business, it selectively strives for compliance and access in the mainstream market countries and regions, and opens up wasteland and expands land where the regulatory policy of crypto assets is not clear.

In the United States, where the financial regulatory policy is strict, binance did not give up and set up the binance US station there.

Not long ago, on March 11, it was reported that the US Commodity Futures Trading Commission (CFTC) was investigating whether binance provided derivatives trading to us users without permission.In response to this rumor, binance said that binance.com exchange does not serve U.S. users, while binance us, which serves U.S. users, has no derivatives business.

In response to the "compliance" requirements of us regulation, binance is cautious, and its recent actions have released a positive attitude.This month, binance hired two former FATF executives as its regulatory and compliance advisers.

As early as March 12, according to the news agency, binance hired former U.S. Senator Max Baucus as an adviser.The 79 year old politician, who was an ambassador to China in the former President Obama administration, is a Democrat from Montana. He has been a senator for more than 30 years, including seven years as chairman of the Senate Finance Committee.

CZ also tweeted about the help Mr. Max Baux will provide to binance, including strategy and policy, government relations and compliance.

CZ's introduction to Max Baux

It seems that the introduction of policy resources is one of binance's strategies in dealing with strong regulatory countries.In Singapore, South Korea and Hong Kong, which are gradually open to the supervision of the crypto asset market, binance chose to fight for the corresponding access license.

At least a year ago, the market would have thought that binance's goal was to dominate the exchange industry, expanding the spot and derivatives markets for crypto assets with extraordinary efficiency.However, since 2020, binance has extended its reach to the blockchain world beyond national boundaries, and launched the binance smart chain BSC, which conforms to the trend of the DFI market. In the near future, nodes on the chain will be opened one after another.

The scope of binance's goals has become broader, and CZ has changed its previous judgment on decentralized transactions, believing that "if we can make secure backup easier and easier to use, DEX will be the future.".」

Large scale chain building is the biggest difference between binance and coinbase, which also means that the two super exchanges will take a completely different path.

"Original army" vs "regular army" industry pattern changes

The path of coinbase is almost the replication of traditional Internet enterprises -- entrepreneurship, financing and listing.After listing, coinbase will also comply with stricter regulatory review requirements.

Nevertheless, there are still a number of crypto asset trading platforms and companies going public one after another.In March this year, eToro, a multi asset trading platform, released its plan to merge with another company in March this year. Kraken, another crypto asset exchange, also has the idea of merging and listing. Due to its low valuation, the exchange plans to put its IPO in 2022.

The biggest beneficiary of Coinbase's listing is shareholders. Because it is a direct IPO, its shareholders can sell their shares immediately after starting trading, without waiting for a six-month lock-up period like traditional IPOs. Last week, its shareholders registered 114.9 million shares and planned to trade after listing. According to the regulatory documents of the SEC, the shareholders who registered the shares for sale include investment companies including Andreessen Horowitz and Union Square Ventures, as well as Brian Armstrong, CEO of the company and Fred Ehrsam, co-founder.

According to the average US shares of $343.58 in the private market, 114.9 million shares registered for sale are worth $40 billion.

Binance, regarded by coinbase as a rival, has shown no interest in going public."We are not short of money," CZ told the media.Our market is good, and we are very healthy and growing organically, so we don't have any IPO plans.」

CZ "our market" is speculated to refer to BNB.If the stock is the basis for traditional financial market to evaluate the value of coinbase, BNB is one of the indicators that binance is valued in the crypto asset market.

In the crypto asset market, the BNB token launched by binance three years ago has a total market value of US $38 billion, ranking fourth in the market, second only to BTC, Eth and usdt.

At BNB's current market price of $273 on binance, the eco pass has already generated 1820 times the return for early investors.In fact, after the market scale of defi increased sharply in October last year, binance plans to separate its value BNB from the identity of exchange platform currency and become a value circulation tool on the chain.

BNB's price trend in the first quarter of this year

After BNB is on the chain BSC, the price also increases with the growth of the chain.In January this year, BNB rose from tens of dollars to a record high of $339.9 on February 19.The total value of crypto assets (TVL) in the chain of BSC has reached US $18 billion, becoming the second largest public chain after Ethereum (TVL on Ethereum chain is US $62.7 billion), and the TVL of BSC has exceeded 1 / 4 of that of Ethereum.

As the earliest exchange where the public chain was launched, binance has also produced demonstration effect. Heco and okexchain, the fire currency ecological chain, have launched public chains representing their own ecology. Several second tier exchanges are also raising funds for the development of public chains.

It seems that the global crypto asset exchanges are forming two teams. One is the "regular army" of coinbase which embraces the traditional financial market. the other is the "primary army" of blockchain, which breaks through the traditional development towards a decentralized value world. Binance, the chain builder, is obviously the latter.After the listing of coinbase, the "one super and many strong" pattern represented by binance will appear in the field of native army.

CZ is actually a believer in bitcoin. He believes in the decentralized value network consensus brought about by bitcoin, and has a great spirit of breakthrough. Even if there is a second generation blockchain like Ethereum in the market, he still encourages binance to support chain building, believing that this is an initiative to "let ordinary people participate in finance without barriers".

In the value world constructed by crypto assets, coinbase chooses to replace value from the traditional financial market. Like an adventurer, binance enters the blockchain jungle, trying to create value for the people in the forest.
Two paths, two goals, one near and one far, will also lead the exchange industry into a new situation.