Exchanges

Leading Cryptocurrency Exchanges: Binance

By Single Broker Academy

This article opens a series of articles about top cryptocurrency exchanges. Although cryptos are becoming increasingly reliable assets, a cryptocurrency exchange can still pose vulnerabilities related to fraud. Thus, it's vital to find a trustworthy exchange that will help increase your funds, not reduce them. 

We will start with Binance - one of the world's largest crypto exchanges. Let's have a look at its fundamental metrics, advantages, and pitfalls.

Binance: Fundamentals

Binance is a platform that provides services for crypto trading, listing, fundraising, delisting, and withdrawal. A company that wants to launch its own token uses the platform for fundraising through an ICO. Binance has a large trading volume as many traders and investors use it.

Binance was launched in China in 2017. A year later, the company's headquarters moved to Malta, EU, due to China's strict regulations. In 2019, an American partner Binance.US was founded in San Francisco for US residents. It happened after the original exchange stopped dealing with US citizens and chose a partnership with its US-based version.

Cooperation with the American partner allowed the exchange to stay afloat as increased regulatory scrutiny didn't affect Binance.US, and US citizens continued using the services of Binance.US. 

Binance: Metrics

The trading platform executes three order types. They are limit, market, and stop-limit orders. Futures contract trading can be done via additional order types, including stop market orders, trailing stop orders, post only orders, and limit TP/SL orders. 

As of August 25, 2021, the 24-hour trading volume is $105,853,044,251.79 (2,170,300 BTC).

Binance: Services

Besides standard services, the platform has other tools and options for investors. 

Binance Earn - a platform that enables investors to stake or earn interest via stablecoin deposits. There is a wide range of options and interest rates depending on the coin and the tenure. 

Binance Visa Card allows the conversion of cryptocurrencies into fiat currency and spending them on products and services. Administrative fees on conversions aren't applied. Still, payment network fees are incurred.  

Binance Smart Pool allows miners to switch between various cryptos to optimize and multiply their income.

Binance Labs - a blockchain technology incubator. It's focused on the development of promising projects at the pre-ICO stage. It assists cryptocurrency project teams with the necessary funding, advisory resources and provides a launchpad for any required listing and fundraising.

LaunchPad - a website for hosting new and emerging blockchain projects and API interfaces. 

BNB - the Binance internal token launched through an ICO in July 2017. It's used to facilitate crypto trading on the Binance exchange. As of August 25, the 24-hour trading volume of the coin is USD 3,388,059,916. In the CoinMarketCap ranking, the currency is in fourth place. The live market cap is USD 84,541,761,663 USD, while the circulating supply is 168,137,036 BNB coins and the maximum supply is 168,137,036 BNB coins.

Binance: Security

Although in May 2019, Binance suffered a major hack that led to the theft of 7000 Bitcoins, the cryptocurrency exchange is considered a safe platform. It enables user account protection via Two-Factor Authentication, FDIC-insured USD balances, device management, address whitelisting, and cold storage. Just recently, the platform introduced mandatory verification of all users.  

The platform has a comprehensive guide on security measures published on its website. 

Insurance Fund

Insurance funds are used to protect traders who entered bankruptcy from additional losses and ensure winning traders get their profits in full. When a trader's position is liquidated (when the collateral is less than maintenance margin), and they have less than 0 USDT after the liquidation process or cannot liquidate other positions, the trader becomes bankrupt. Then Binance has to take over their remaining positions.

In most of these cases, Binance uses an insurance fund that takes over the remaining positions and gradually adds them to the market. The insurance fund charges clients a commission for liquidating positions that do not lead to bankruptcy. If the insurance fund is unable to take over the positions after liquidation, the counterparty's positions will be liquidated.

Binance: Advantages

The exchange is a popular trading platform worldwide. Let's discover why investors and traders around the globe trust it. 

Cryptos available

The platform provides a wide range of cryptocurrencies. Binance users can do crypto-to-crypto trading in over 500 cryptocurrencies and virtual tokens, including popular cryptos such as Bitcoin, Litecoin, and Ethereum. 

Affordable fees

Fees are an essential part of the trading income as they determine how many funds you will end up with. Binance charges a 0.1% fee on buy, sell, and trade operations. It's one of the lowest fee rates among top cryptocurrency exchanges. 

Binance.US imposes a 0.10% fee on spot trading; for instance, for buy and sell trades, the fee is 0.50%. The spot trading fee may become lower if an investor trades longer. For example, just a 0.09% fee will be applied if a user trades for 30 days with a volume above $50,000 but below $100,000. Lower fees are charged when using a BNB coin to pay for transactions. The fees can be reduced by a full 50% if paying with BNB. 

Interest rate

Investors can earn from 0.5% to 10% interest on staking coins for a period. The percent depends on the asset. The interest is similar to an annual percentage yield on bank savings accounts, but the rate is higher, and security checking is more accessible. 

Trading option

The exchange offers crypto-to-crypto and fiat-to-crypto trading. Binance.US provides an option to buy and sell crypto using US dollars automatically.

Deposit options

Cryptocurrencies can be purchased with bank deposits, bank transfers, and credit/debit cards. However, fees should be taken into consideration. 

Crypto wallet

Binance offers a crypto wallet to store electronic funds.

Supporting programs

The platform provides programs for miners and features that help traders make investment decisions.

High capacity

The platform claims to process nearly 1.4 million orders per second.

Binance: Pitfalls

Binance is ranked the top platform, and this wasn’t by accident. Yet it has few disadvantages. 

Limited assets on Binance.US

Although Binance offers over 500 cryptocurrencies and tokens, Binance.US provides access to 50 assets only. 

Not legal in some jurisdictions

Although Binance.US is a specific platform for US citizens, it's not legal in several US states. In June 2021, FCA prohibited regulated services to customers of Binance Markets Limited, a UK subsidiary of Binance. The subsidiary can't offer trading services in crypto assets and derivatives to customers in the UK. However, Binance.com still can offer services, including trading, to UK users. In July 2021, Italy forbade the platform from operating in the country. 

Complicated interface

Binance is a platform for experienced investors and traders. A complex platform with numerous assets and in-depth dashboards could be too complicated for newbies. Binance.US is considered to offer a more accessible interface. Still, it doesn't include any guidance.

However, it's not a significant disadvantage if you enter the exchange via Single Broker. Single Broker offers unique access to numerous cryptocurrency exchanges via a user-friendly interface. 

Takeaway

Binance is one of the most popular cryptocurrency exchanges with a large variety of assets. Despite some security issues which every exchange has gone through, Binance is considered one of the safest crypto trading platforms. Developed additional services allow traders and investors to increase their presence on the cryptocurrency market. 

Single Broker is a partner of Binance. Opening a Single Broker account, you get full access to the exchange’s services. Trade and transfer money between exchanges on a single convenient platform with a user-friendly interface.