Although it is not based in Brazil or in any other country, Binance it is responsible for 80% of the trading volume between cryptocurrencies and the real (BRL). Behind are the Brazilian exchanges BitPreco, Mercado Bitcoin and NovaDAX, which represent another 13.44% of the market.
Having only started working with real two years ago, while others have been in the Brazilian market longer, Binance’s current dominance seems to be frightening. However, many Brazilians were already using it before to buy altcoins using Bitcoin.
That said, such dominance may be even greater as many Brazilians continue to trade other pairs after converting their reais into some cryptocurrency available for purchase.
There is no room for competition
According to data from Mercado Cripto, the daily volume of Binance is around 420 million reais. Meanwhile, the largest national stock exchanges have volumes between 22 and 25 million reais each, that is, a difference of 17 times.
In addition to having zero withdrawal fees in reais when it started working with the Brazilian currency, today with a fixed fee of 2.60 BRL, other points will help Binance become a giant in Brazil, such as:
Low trading fees, 0.1% on passive and active orders; Increased number of cryptocurrencies available to trade; Increased volume and liquidity; Withdrawal fees are still low.
While some of their competitors may beat Binance’s trading fees, they usually have a higher withdrawal fee, or vice versa. So, in the big picture, Binance manages to offer a good deal to its customers.
The almost 400 cryptocurrencies and almost 50 fiat currencies available on Binance form a beautiful menu for investors who want to get richer. In addition to dominating the Brazilian market, it is also the largest in the world, so it is possible to find liquidity in almost all pairs.
Speaking of liquidity, this is a point sought after by many people, so we can see a herd effect. After all, high volume attracts more volume and vice versa, further complicating the situation for smaller exchanges.
Dominance has led to the closure of some industry exchanges
While Binance has forced Brazilian exchanges to lower their fees just to attract customers and retain old ones, for example, its dominance sucks for the industry.
As an example, about a year ago the Braziliex exchange ended its activities citing the “entry of new competitors, as well as the existing uncertainties due to the lack of regulation.” That said, it’s only natural that other domestic exchanges feel the same pressure, mainly because Binance it works in the loopholes of our laws.
Given benefits and disadvantages, the situation may have new chapters soon with the possible creation of a Binance headquarters in Brazil. Although it is difficult to estimate the results of this, surely its competitors are attentive to this movement.