Binance’s dominance grows in FTX’s absence

March will mark the one-year anniversary of the start of the crypto winter.

The past year has been dismal for crypto investors, with trillions of US dollars in losses all stemming from the chain of collapses that began with that of Terraform Labs in May.

Binance CEO Changpeng Zhao / Photo credit: Binance

Centralized exchanges became the poster children for everything wrong in the crypto industry in 2022, including fraud and lack of transparency.

It may be an unfair label (Terra’s Anchor protocol was a decentralized platform after all), but when the dust settled, it was centralized platforms that were hit the worst.

Former giants who now sit in bankruptcy court include Three Arrows Capital, FTX, Hodlnaut, Voyager Digital, and Celsius.

But despite the losses, one company managed to survive and even thrive: Binance. While other exchanges also survived, Binance will likely come out of the crypto winter the same way it went into it – as the biggest centralized exchange.

In the first quarter of 2022, Binance was already the dominant crypto exchange, holding a 48.7% market share – almost 5x larger than its nearest competitors. Coinbase and OKX, by comparison, each commanded about 10% of the market, according to a end-of-year report by CryptoCompare. As of January, Binance’s market share stood at 76.4%.

When UST collapsed at the end of the second quarter of 2022, almost every centralized exchange lost ground, while Binance gained 11%. The only other exchange to avoid a quarterly loss in market share in 2022 was Bybit, a tiny platform with a 1% market share.

Binance is also one of the few exchanges to survive 2022 without cutting jobs. Estimates vary, but according to CoinGecko, the industry had seen more than 9,300 jobs slashed as of January. CoinDesk estimates that the total is closer to 30,000 jobs.

Binance founder and CEO Changpeng Zhao recently told an audience at the Crypto Finance Conference in St. Moritz, Switzerland in January that the company is looking to grow its workforce by 15%-30% in 2023 – on top of the 5,000 employees that Binance said it hired in 2022. Zhao said the company’s current headcount is “almost” 8,000 employees.

Recent high-profile hires at Binance include Gemini’s Noah Perlman, who joined Binance as chief compliance officer. The exchange currently has 491 job openings listed on its website.

Binance’s secret sauce? Size

David Moreno Darocas, research lead at cryptocompare, attributes the rise in Binance’s market share over the last few years to its already dominant position in the markets.

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