In a recent turn of events, Bernstein predicts that Binance, the world’s leading cryptocurrency exchange, is likely to retain its global supremacy in the crypto market, despite settling a $4 billion dispute with the U.S. government.
CoinDesk reported on Tuesday that Binance witnessed minor outflows amounting to less than $1 billion following the news of the settlement. Despite this setback, the firm continues to be a considerable force in the global markets, holding an impressive $67 billion of customer funds under custody.
The research report, spearheaded by Gautam Chhugani, emphasised that Binance’s standing with non-U.S. retail customers continues to be robust, even amidst the recent crisis. The firm is expected to maintain its importance in non-U.S. markets.
However, Bernstein envisions an increased level of competition for Binance from regulated markets such as Hong Kong and Singapore, alongside listed rivals like Coinbase Inc. (NASDAQ: COIN).
Despite the imposition of a substantial $4.3 billion fine, Binance reportedly possesses sufficient funds to sustain its operations. Analysts predict that Binance’s total withdrawal from the U.S. market will amplify the dominance of onshore and incumbent exchanges within the country.
The settlement does not include the Securities and Exchange Commission (SEC), but Matrixport views this as a positive outcome for Binance and its founder, Changpeng “CZ” Zhao. The cryptocurrency services provider expects Binance to maintain its position as a top-three exchange in the foreseeable future.
Why It Matters: The settlement comes as a significant development for Binance, illustrating its resilience and ability to withstand substantial financial hits. Despite the hefty fine and withdrawal from the U.S. market, the exchange’s dominance in non-U.S. markets remains undamaged, reflecting the strength of its global operations. This development also highlights the increasing competition in the crypto market, with regulated markets and listed rivals posing potential challenges to Binance’s global dominance.