A Comparative Analysis of Binance and FTX in 2024

Market Performance Overview

Despite market volatility, Binance exhibits a stronger performance compared to FTX.

New data suggested that Binance was doing relatively much better than FTX. Exchange volumes grew in the last quarter as BNB’s price continued to decline. Binance [BNB] had one of the most tumultuous times in 2023, with factors such as lawsuits and regulatory scrutiny putting a dent in its step.

But despite the volatility, new data suggested that Binance was doing relatively well.

Reserves and Risk Analysis

Smooth sailing for Binance?

According to Capriole Funds’ data derived by AMBCrypto, upon examining the Reserves 7 day Drawdown for Binance, one can observe more stable trends, with smaller declines indicating routine customer deposits and withdrawals.

  • Unlike FTX, Binance did not exhibit the same magnitude of challenges in managing reserves, as reflected in the Reserves 30 Day Drawdown.
  • The Volume-Reserve Ratio (VRR) Score for Binance also showed reduced risk for the exchange. Binance’s ratio tended to stay within more manageable levels, signaling a more balanced relationship between trading volume and reserves.
  • This contrasted with FTX, which exhibited periods of elevated risk leading up to its collapse.

Additionally, the Open Interest Reserve Ratio (ORR) Score, relevant for derivatives exchanges, provided insights into net open positions and obligations.

Binance’s performance in this metric was more stable compared to FTX, where the latter experienced significant drops in the months leading to and following its collapse.

Potential Challenges for Binance

Some issues on the app store

However, despite these factors, there could be some problems for Binance going forward. At press time, Apple had removed Binance and other exchanges from its app store.

Binance could lose a large number of users due to this move. This, in turn, could generate more FUD towards Binance in the future.

If the uncertainty around centralized exchanges continues to rise, there could be mass withdrawals that may impact the exchanges in the future, especially Binance.

Outlook and Conclusion

In the last three months of 2023, the exchange volumes on Binance grew. At press time, Binance’s exchange volume for January had reached $143.32 billion.

If the trend continues and Binance manages to mitigate FUD, things could get better for the exchange. Binance’s progress could also have a positive impact on the overall sentiment around the BNB token. At press time, BNB was trading at $299.04 and its price had fallen by 1.81% in the last 24 hours.

Despite Binance’s progress and recovery, BNB had not seen the same positivity in terms of price.

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