‘A Long History of Doing Right by the Customer:’ Market Research Firms Weigh in on Binance’s Solvency and Market Standing
Financial markets are infinitely complex, and making reliable inferences about what’s going on around a certain asset class, token, or platform independently can be a gargantuan task even for sophisticated investors and traders. Here’s where insights from professional market analysts come in handy – provided that the researchers leverage appropriate data and analysis tools and are impartial when drawing interpretations and conclusions.
According to a handful of research reports that landed in the final days of 2022 and the first days of 2023, Binance’s overall standing is quite strong – a takeaway with which we would humbly agree. But don’t take our word for it: see for yourself what the research firms, from established Wall Street powerhouses to community-driven on-chain analytics platforms, had to say.
Bernstein Research is a sell-side research and brokerage arm of global asset management firm AllianceBernstein Holding L.P., which is widely considered to be one of Wall Street’s top centers of financial markets expertise.
In their Global Digital Assets 2023 Outlook report, Bernstein’s analysts dedicated a subsection of the “Financial Infrastructure” chapter to discussing Binance’s standing in the face of the challenges that engulfed the crypto market throughout 2022. Their verdict is captured in the subsection’s title – “Binance is not going down!” – and relies on Bernstein’s assessment of our ecosystem as “solvent, liquid and stable” as well as having a “long history of doing right by the customer.” The framers of the report further highlighted Binance’s initiative of making its asset holdings verifiable by disclosing cold wallet addresses and consistent investment in its custody and security infrastructure. In their opinion, handling $6 billion in user withdrawals on December 13, 2022 is also a testament to Binance’s financial robustness.
CryptoQuant is a blockchain analytics platform that allows crypto traders and investors to supplement their strategies with data-driven insights. In mid-December, CQ published their analysis of Binance’s BTC proof-of-reserves report.
In their study, CryptoQuant analysts compared Binance’s disclosed liabilities to their proprietary metric estimating Binance’s customers’ deposits and found a 99% match between the two values. Additionally, they estimated on-chain data on Binance’s ETH and stablecoin reserves, concluding that the structure of these holdings is robust, with no signs of dangerous “FTX-like” behavior. The overall structure of reserves received a “clean” label, meaning that BNB, the token of the BNB Chain ecosystem, represents a relatively small share of the holdings.
In its year-in-review report, Norway-based, digital asset-native research firm Arcane called 2022 “a year of expensive lessons.” Acknowledging that the crypto market took a serious beating over the last 12 months, the analysts also name a few winners of the year – and Binance is ranked among them.
Arcane Research experts go as far as to state that “in terms of trading activity, Binance is the crypto market,” attributing our strong market position to policies such as lifting trading fees for BTC spot pairs. However, they acknowledge that some of this growth could be organic – that is, originating mainly on the demand, or user side. Among Binance’s other achievements of 2022, the report notes BUSD strengthening within the stablecoin market as well as Binance’s “outlier” status in terms of employment policies: while many competitors were laying off their staff, Binance continued hiring (we’re at about 7,500 employees as of today).
Interestingly, Arcane’s prediction for 2023 is that other exchanges will strengthen in the spot market. Whatever may occur in 2023, our focus will always be on delivering top-notch user experience. We are looking forward to a year of strong competition on our industry’s shared path toward global mainstream adoption of digital assets and Web3.