If you were around during the peak of the crypto bull market in late 2017 you’ll remember that there were many projects/exchanges with more funds raised than you can imagine.
But since then, a very well needed market correction created the beginning of a bear market, which forced many projects to cut down on staff members and halt further project development due to lack of funds.
Very poor financial management if you ask me!
Coinbase was still the number 1 cryptocurrency exchange for newbies and the general consensus was that Coinbase was the safest and most regulated.
However, as Coinbase was continuously marred with repeated claims of insider trading, extortionate fees and lack of cryptocurrencies to invest in, Binance saw this as an opportunity to really take advantage.
So how exactly did Binance go about gaining headlines and posing a genuine threat to Coinbase as the number 1 exchange?
Let’s take a look at the history of Binance.
When Binance first launched, their platform was initially based on promoting ICO’s and exchanging a majority of Asian coins using Binance Coin (BNB Token) to allow traders to discount on the exchange.
However, due to a governmental clampdown in China on cryptocurrencies in 2018 many projects/exchanges were essentially left out to fade away…
Binance being one of them…
Binance knew with new regulations China had in place that they would need to reinvent their brand and market themselves overseas if they wanted to be a sustainable project in the cryptocurrency space.
Could this have been the end already for Binance?
Moving the Operating License from China/Japan to Malta
Binance had exchanges in both Hong Kong and Japan. To avoid ongoing clashes with the regulatory authorities this made perfect sense to move overseas.
Although Binance’s initial objective was to allow trading of Asian cryptocurrencies, the crackdown with the Chinese government meant the delisting of a significant amount of tokens from their platform.
As Binance now started serving more of the western countries and listing tokens from overseas it made more sense to move the operating license to Malta.
Malta’s bullish stance on regulating virtual currencies
Malta clearly announced on multiple occasions they were looking to promote their country as the front-runner for digital assets.
“Plans for a Malta Digital Innovation Authority that will certify and regulate blockchain-based businesses and their operations were unveiled last month, the Malta Independent reported. The organization will also create a framework to oversee initial coin offerings, the newspaper said.”
Opportunity to Launch Fiat to Crypto deposits and withdrawals
Binance were always very keen on offering a fiat to cryptocurrency deposit and withdrawal service similarly to Coinbase which has certainly improved their liquidity and managed to pull new investors from other exchanges due to the number of cryptocurrencies you can choose to purchase.
Malta has allowed Binance to really progress this exchange to the next level and works well for both the exchange platform and economy of Malta as this not only increased employment but also created partnerships with local banks to enable deposits and withdrawals.
So that brings us to the next point.
As a new investor/trader, why would you want to choose Binance over Coinbase?
Well, a couple of reasons may have you rethink your options.
Cryptocurrencies available on Coinbase/Binance Platform
Coinbase is currently well behind Binance in terms of cryptocurrencies being listed on their platform. They previously had Bitcoin, Ethereum, Litecoin, Bitcoin Cash and Ethereum Classic listed.
However, due to alleged insider trading, they took a more precautious route of listing coins to avoid future allegations and have since listed more coins. (See link below for the list of coins listed on Coinbase – https://support.coinbase.com/customer/en/portal/articles/2630943-supported-digital-currencies)
Binance, on the other hand, offers over 250 cryptocurrency coins to trade on its platform.
A big incentive, which draws investors/traders to Binance, is the fact they have their own coin known as Binance Coin (BNB), which is used to lower trading fees on the Binance platform.
And do the fees make a difference?
Well just think about this…
Binance currently has a fee of 0.1% on all trading fees in comparison to Coinbase, which can range from 1.49% to 3.99% per trade.
Now if you are making 5-10 trades a month and incurring a 2-3% fee each time that can accumulate very quickly!
A substantial difference that can compound over time if you are trading regularly.
User Interface on Coinbase & Binance
As a crypto newbie, I would still confirm Coinbase still has the upper hand on Binance with their user interface.
The website design is very easy to navigate and allows someone with very little experience to purchase cryptocurrencies.
Binance is still very user-friendly on the other hand however may be slightly more advanced than Coinbase.
Now it’s subjective for anyone to decide which exchange is bigger as we currently know that Coinbase.com isn’t listed on Coinmarketcap.
Both Binance and Coinbase are still the front leading exchange platforms that both have their pros and cons.
My thoughts would be to use the combination of both exchanges to see which fits your preference.
If you are a trader of multiple coins Binance may be the obvious option due to a wider variety but Coinbase may be the ideal exchange for getting into crypto!