Binance, the biggest crypto exchange, has reaffirmed its importance in forming market movements. As per Mignolet, a CryptoQuant analyst, irrespective of going through huge regulatory challenges over the last 2 years, Binance has maintained its dominant role behind Bitcoin price movements. The analyst discussed this in an exclusive report.
Binance market has become increasingly significant
“Market prices remain predominantly driven by the liquidity of the futures market, and Binance continues to be a cornerstone of this dynamic.” – By @mignoletkr
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— CryptoQuant.com (@cryptoquant_com) November 18, 2024
Binance Still Contributes to Bitcoin’s Price Dynamics with Dominance in Futures and Spot Trading
Mignolet revealed that Binance is still a noteworthy player in futures and spot trading, significantly contributing to Bitcoin’s price dynamics. In this respect, the analyst pointed toward the data comparisons between the Bitcoin bull runs of the years 2023 and 2020. The respective comparison shows a substantial shift in overall market activity.
During the bull market of 2020, the spot trading volumes of Binance had a range of $5B-$7B. This surpassed the $2B-$3B price range of Coinbase. On the other hand, in the present cycle, the spot volume of Binance has surged to $10B-$20B. Hence, it has outpaced the $3B-$4B of Coinbase. This broadening gap denotes the increasing influence of Binance on the liquidity in the spot market. Additionally, it also highlights Binance’s impact on the overall trading operations.
Apart from that, the futures trading volume of Binance has a range of $60B-$80B. This outcompetes the spot volumes thereof by a factor of 4 to 5. The respective development signifies the crucial role that the futures market plays in heightening the price movements of Bitcoin. It also meaningfully contributes to the liquidity foundation that Binance offers for the respective dynamics.
The approval of $BTC spot ETFs earlier in 2024 denoted a landmark development for the crypto market. These investment instruments have provided the market with an enormous institutional capital. This has resulted in an increased accessibility of Bitcoin for conventional investors.
Nonetheless, Mignolet suggests that not all capital concerning ETFs influences the market prices. Several transfers follow over-the-counter channels, decreasing price fluctuations. Despite the notable contribution of ETFs to institutional adoption, the futures and spot markets of Binance keep dominating the liquidity landscape.
Despite Market’s Continuous Evolution, Binance Leads Derivatives and Spot Trading with Substantial Liquidity
According to the CryptoQuant analyst, the market movements in the crypto sector are still heavily affected by futures liquidity and Binance stands at the epicenter in this respect. Amid the crypto market’s continuous evolution, Binance continues its operations as a cornerstone of derivatives and spot trading. This reaffirms its status as a leading platform in the market, showing importance and resilience in the wider crypto ecosystem.