Coinbase vs Binance – who will win?! Binance has recently upped the ante between the two popular cryptocurrency exchanges by announcing crypto purchases via credit card payments.
This move by Binance was a surprising move. There was no rumors about this ability, so the fact that Binance was able to do this is quite surprising, but welcomed by the cryptocurrency industry. Binance was able to make this happen via a partnership with Simplex. Now, Binance is a direct competitor with Coinbase, Bitstamp, and other fiat-to-crypto exchanges.
Binance has aggressively moved to take marketshare from many other popular exchanges to become the most popular cryptocurrency exchange. They’ve aggressively tweaked their security and website, and have taken marketshare from exchanges like Bittrex and Poloniex. Binance was able to offer security standards, UI, and the broad range of cryptocurrencies that the other exchanges just couldn’t.
Binance’s only drawback was the lack of fiat-crypto ramping that made the exchange reliant on other exchanges that allowed the purchase of cryptocurrency using fiat. During the last bull run of 2017, Coinbase and Gemini were the preferred fiat ramp that those looking to purchase Bitcoin used.
But what Binance lacked, they more than make up for in terms of cryptocurrencies offered. Gemini and Coinbase simply couldn’t compete with Binance’s offerings. Binance offers a diverse and more varied altcoin pairs – but with this latest move by Binance, it removes the USD fiat-on-ramp platforms like Coinbase from the equation entirely – users can now start and end the entire process on Binance.
Of the six biggest exchanges by traded volume, which are considered trusted by the Blockchain Transparency Institute, Binance’s trading volume accounts for over 50 percent of the total volume traded — a rise from less than 10 percent in August 2017.
Binance saw its trading volume slow in February of 2018, but has since seen steady growth and increasing dominance in the cryptocurrency exchange world.
The question now is whether or not Binance will continue to reign supreme. Binance has built its reputation and dominance on the backs of altcoins. Its popularity stems from the broad offerings that they provide. But now that they’re offering fiat capabilities, Binance is competing in a different marketplace. Instead of just crypto and alt pairs, now it has to contend with different factors that other exchanges have had to deal with.
This is where Binance could still shine. Despite offering fiat on-ramp capabilities, Binance, Coinbase, and Bitstamp offer significant differences in the form of fees.
For Binance, those wanting to buy Bitcoin, Ethereum, Litecoin, or XRP will need to use a debit or credit card. The fee will be either 3.5% or $10.00, whichever is higher. So someone buying $1000.00 in Bitcoin would pay $35 dollars in fees while someone buying $100.00 worth of Bitcoin would pay $10.00.
Coinbase would incur a slightly higher fee. Coinbase currently offers 3.99%, which is almost 0.5% more than Binance. Bitstamp offers 5%, which is a whole 1.5% more than Binance.
But Bitstamp and Coinbase offer purchases via bank transfer, which works out to be far cheaper. If using bank transfer through Coinbase, a $200.00 Bitcoin purchase would be $2.99, compared to Binance’s $10.00 fee. Binance does not yet offer purchase via bank accounts.
However, the drawback with bank transfer is waiting for the funds to clear before actively trading your new tokens. So the few dollars might be worth paying for those who want to start trading immediately.
Enabling card payments is a significant step forward for Binance, and is just one of several recent developments, including Binance Jersey, Binance DEX, and the acquisition of TrustWallet, that have helped push the exchange’s native token — BNB — into the top ten cryptocurrencies by market cap.
What do you think? Do you plan on using Binance to on-ramp your fiat to buy cryptocurrency? Or will you keep using Coinbase or another method? Tell us your plans on our Facebook Page!
