Cryptocurrency Exchange Binance Still Profitable Despite Bear Market
Binance, the world’s largest cryptocurrency exchange by trading volume, is still profitable despite last year’s market meltdown, its chief financial officer Wei Zhou said, CNBC reported on February 14, 2019.
Bear Market Had Little Effect on World’s Largest Crypto Exchange
The prices of almost all cryptocurrencies have plunged nearly 80 percent since their historic high in 2018, causing devastation across the entire crypto industry. With companies left and right struggling to stay afloat by cutting back employees and rushing to diversify their assets, it’s hard to see how any large operation could survive the crypto winter.
However, there’s an exception to the rule, as the world’s largest cryptocurrency exchange seems largely unaffected by the longest bear market recorded in digital asset history.
According to a February 14 report from CNBC, Binance is among the rare crypto companies that are still profitable despite last year’s market meltdown. Binance CFO Wei Zhou told the publication in a phone interview that the business is profitable, but did not disclose its financials publicly.
The lack of financial data from the company has made it hard to estimate Binance’s profit, and media outlets have been publishing estimates based on publicly available metrics.
One report, by industry publication The Block, estimates Binance made $446 million last year, CNBC wrote. The report is based on an analysis of how much the exchange spent to buy back units of its token, called BNB, using its net profits.
Binance’s Profits Measured in Billions
Changpeng Zhao, the founder and chief executive of Binance, told Bloomberg in July 2018 that Binance was targeting a net profit of between $500 million and $1 billion in 2018. An incredible feat, to say the least, for a company that was founded in July 2017.
Despite being relatively young, Binance has already positioned itself as a dominant force in the crypto industry. Its initial coin offering raised an unprecedented $15 million, which helped it achieve never before seen trading volumes.
The exchange’s trading volumes in 2019 aren’t even close to its highs in 2017 but are still the largest of any crypto exchange operating today. According to data from CoinMarketCap, Binance hosted $715 million in trades in the last 24 hours alone.
Wei Zhou, a former chief financial officer at Chinese jobs site Zhaopin and TV ad company Charm Communications, was hired in September 2018. Zhou was responsible for overseeing both companies through their initial public offerings, which prompted many to suspect Binance was planning to go public.
When CNBC asked him whether Binance could seek a stock market listing of its own, given his background, he said there were “no plans” in the short term.