According to an exclusive news report by Bloomberg, the world’s largest cryptocurrency exchange, Binance is expecting to generate as much as $1 billion in profits for the current year.
In an interview with Bloomberg, the Chief Executive Officer and founder of Binance, Changpeng Zhao stated that he was expecting his company to see profits within the range of $500 million and $1 billion for 2018. He stated that the cryptocurrency exchange had already chalked up $300 million in revenues for the first half of this year.
Binance was founded in July of 2017 by Zhao and his partner Yi He, just 11 days after it launched its Initial Coin Offering which generated $15 million in funding for the new project. Binance was originally founded in China, however, when the Chinese government declared that it was banning all cryptocurrency trading in September 2017, the exchange moved out of the country and set up base in Japan.
However, in March 2018, Binance received a warning from the Japanese Financial Services Agency (FSA) for operating a cryptocurrency exchange in the country without first registering with the regulator. Then, the company decided to move its operations to Europe in Malta, which is where it currently operates from.
In January, Binance had announced that it had a user base of 2 million people, going up to 9 million by the beginning of June. Now, during the interview with Bloomberg, Zhao stated that number had grown exponentially in the last few months to 10 million users. Zhao also stated that the exchange’s current daily turnover on average is about $1.5 billion.
Now, the company is looking at expanding its operations, starting with the opening of a new cryptocurrency exchange in Uganda. This platform has also become the first under Binance’s name to offer traditional currency trading pairs. The company is also looking at expanding operations to Bermuda in the near future.
Binance also announced that it was planning to offer trading options against the Euro in some countries. This offering has only been made possible thanks to its burgeoning relationship with the Maltese government.
Zhao’s assertion about his cryptocurrency exchange targeting $1 billion comes immediately after the platform had to suspend trading due to technical difficulties this week. Additionally, the cryptocurrency market is going through an extended slump. The value of Bitcoin has already dropped by 52% since the beginning of the year. In fact, this is the first time that Bitcoin showed a price decline in the second quarter of the year. The crypto fell 8% this last quarter, breaking a 7-year streak of gains in this time period.
Added to this is the ever increasing danger of hackers attacking cryptocurrency exchanges. In 2017, about $266 million worth of cryptocurrencies were stolen from a few exchanges. However, in the first half of 2018, that number has more than tripled to $731 million worth of cryptos being stolen from exchanges, which is causing many investors – including institutional giants – to stay away from crypto trading.
Therefore, many analysts feel that reaching that $1 billion mark may actually not happen this year, especially if the bearish sentiment continues to prevail through the third and fourth quarters of the year. As it is, Binance is averaging about $1.5 billion in daily trading volume, down massively from its peak of $11 billion per day in December 2017.
However, despite the naysayers, the cryptocurrency exchange sector seems to be thriving. Binance is not the exception to the norm. Other major cryptocurrency exchanges are also expanding to newer markets. Huobi and Coinbase are expanding their operations to countries such as Australia, the US and Japan.