1 - Perfect Timing Binance launched in July 2017 with a $15 million ICO of its BNB token, when ICO popularity was near its peak. The first great Bitcoin craze commenced soon after.pic.twitter.com/ddNYgzkGHl
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We can't understand the US crypto market without understanding Coinbase. We can't understand the GLOBAL crypto market without understanding Binance. How did Binance become the world's largest crypto exchange in under a year? My theory, in charts:pic.twitter.com/QzbsMju7hS
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2 - Token Incentives Binance designed its BNB token with clever structural incentives - traders who used it to interact with the exchange received substantial fee discounts. Binance's low fees & incentives allowed it to grab sizable market share quickly.pic.twitter.com/oCnqzQHF7H
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3 - Staying Crypto-Only Most exchanges act as a "fiat on-ramp" allowing users to exchange legacy currency for digital currency. Binance chose to focus on crypto-crypto transactions to help avoid KYC/AML regulations Domiciling in Malta didn't hurt either.pic.twitter.com/sLlmSTqqIc
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4 - Tether Binance became an early node in the flow of USDT from its creators - Tether Limited - into the open market. Tether issuance is highly correlated with Bitcoin's spike & is considered to be a controversial but important catalyst for spurring demand:pic.twitter.com/HDFrPiecXx
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These four catalysts - timing, its BNB token, staying crypto-only, and Tether - pushed Binance to the world's biggest crypto exchange in 6 months.pic.twitter.com/tCAe6JXKbC
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Even without these catalysts Binance was set up for success from the beginning. Before launching his exchange, founder Changpeng Zhao built widely used APAC HFT systems & worked at Bloomberg & the Tokyo Stock Exchange. Zhao was an HFT expert before he was a crypto expert.
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Binance's rise has something for everyone - fast money, pioneering tech, massive market influence, scandal and mystery. You guessed it - I'm writing about Binance this Friday. You know the drill:https://frontmonth.substack.com/
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Binance is a non US exchange. This is a important argument for many eastern investors
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