Long push How long will it take for Binance to earn 4 billion?

Expected Timeframe for Binance to Reach 4 Billion A Long-Term Projection

Binance How long does it take Binance to earn 4 billion? Let me do the math, 4 billion is approximately Binance’s annual revenue in a bear market.

Coinbase Q3 financial report provides a good reference sample:

Q3 quarterly trading revenue of $288.6 million, market share is roughly 5-7%.

Binance’s market share in “spot” is approximately 7-10 times that of Coinbase, so Binance’s quarterly revenue in “spot” market could be around 20-28.8 billion.

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But Coinbase’s money-making “efficiency” is clearly higher than Binance: CB can earn a spread of 3.8 basis points in Q3 (revenue of $288.6 million, trading volume of 76 billion). In Binance, the taker/maker fee for the most ordinary users is 0.1%, and for institutional users, Binance can provide a maximum maker rebate of 1 bp and a taker fee of 2.4 bp. Therefore, Binance can earn a maximum spread of -1 bp + 10 bp = 9 bp (meaning institutional users provide maker, retail investors act as takers. The situation where institutions are takers and retail investors are makers is rare or almost nonexistent). So it can be concluded that Coinbase’s money-making efficiency is at least 4 times that of Binance. In summary, Binance can potentially earn 500-770 million in spot market every quarter. If you consider the rebates, Binance could possibly earn around 500 million per quarter.

Now let’s calculate the futures market. In Q3, the trading volume of the futures market reached the industry “freezing point”: a total of 6.1 trillion, Binance’s market share is about 50%, approximately 3.1 trillion.

The futures market, although large in volume, is not very profitable. For example, in Binance, the fee rate for the most ordinary users is 1.8 bp for maker and 4.5 bp for taker, while the fee rate for the top market makers is 0.5 bp. Therefore, the maximum spread that Binance can earn is 4 bp.

Based on a spread of 4 bp, Binance can earn around 1.2 billion in Q3, but this number needs to be discounted, taking into account rebates and transaction conditions (it’s not possible to earn a 4 bp spread on every transaction). If we roughly discount it by 50% (considering that there are already many rebates), then Binance can potentially earn 600 million in Q3.

Combining spot and futures markets, Binance can earn around 1.1 billion per quarter. The 4 billion fine is like Binance’s annual revenue in a “bear market” (excluding any pledge, mining pool, and other businesses). In this case, it seems that the DOJ’s calculation is “quite reasonable”.

BTW, if it’s a bull market, the volume and profit of exchanges often increase by more than 10 times.

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