This article will talk about FTX's first 6 months of the year, in a bearish season where many exchanges shook violently, FTX rose again and showed its potential while maintaining its top position. his head. Does Sam Bankman-Fried have many strategies to bring FTX to the top?
The main content of this article includes the following sections:
1.Current FTX figures as of June 2022
2.Competitive factors of FTX
3.Product perspective
4.Projecting the future
Take a quick look at the FTX homepage and you will see the slogan “FTX is a cryptocurrency exchange built by traders, for traders.” Until recently, this statement held true, FTX was founded in 2019 by a number of professional traders including billionaire Sam Bankman-Fried and initially offered only derivatives and margin trading pairs. Over the past three years, the exchange has completely morphed into a global behemoth, offering a wide range of crypto services and has recently made obvious moves to disrupt the entire financial system. tradition as we know it.
Over the past year, FTX's broader ambitions have never been more apparent than it is now, including the following: Sam Bankman-Fried has supported crypto companies that have "failed to lose their fortunes." “Downtrend season, investing in traditional stock market systems, and most recently, the founder of FTX shared details on how his company will approach Celcius’ asset acquisition. In this article, Holdstation and Banana Research Labs will dive deep into FTX's breakout and compare it to its biggest competitors right now.
Current situation
Near mid-June, when BTC fell from the $30k support mark for 7 days straight to $19-$20K, FTX handled over $6 billion in SPOT volume during the worst period of the year. market crash over the past 1 year, the number is at a record high. Overall, exchanges process $2 billion in spot trades per day on average, up from just $100 million in 2020. In May, the exchange's BTC volume surpassed Coinbase for the first time. , although the volume is still far behind that of Binance, the largest exchange globally at the moment.
Just looking at the market share, we can see the breakthrough growth of FTX: in 2021, FTX has only 4% of SPOT market share, while today FTX accounts for 24%.
Analyze and compare the annual market share of the top 3 major exchanges:
2017 : 100% Coinbase
2018 : 53% Coinbase, 47% Binance
2019 : 78% Binance, 22% Coinbase
2020 : 80% Binance, 20% Coinbase
2021: 71% Binance, 25% Coinbase, 4% FTX
2022 : 52% Binance, 26% Coinbase, 22% FTX
2022 Jun : 61% Binance, 24% FTX, 15% Coinbase
Competitive factors of FTX
Fees & Liquidity
FTX has some of the lowest fees in the business. Using the smallest transaction level to represent retail trades - retailer, Coinbase has a taker buyer fee of 0.5% and a liquidity maker fee of 0.5%. On the other hand, FTX has a taker fee of only 0.07%, a maker fee of 0.02%. Low transaction fees have paved the way for FTX to attract more traders and new users rather than retail investors who are flocking to the exchange in bulk. Looking at the bid-ask spreads for the most liquid BTC pair on some of the top exchanges, we can see that the low transaction fees have allowed FTX to have the lowest spreads index and smaller volatility.
It also means that other traders and investors will look to places where the value is located and the best way to judge which broker has better value in a trade is to look at slippage. We simulate a $100k market sell order for the top BTC pair on each exchange and can observe that FTX ranks second only to Binance.
Low slippage indicates that the market is better able to attract trades, which is especially relevant as FTX has reported receiving a lot of sell orders during the bearish season going back to June.
About products
FTX was originally known for its unique derivatives contracts, high margin products, and spot trading pairs. Since then, FTX has been proud to be the second largest provider of non-term futures contracts globally, behind only Binance.
As FTX attracted a large number of professional derivatives traders, the FTX team took notice, and eventually forced the exchange to limit leverage from 100x to just 20x last July. . Since then, FTX has become increasingly dominant in the field of SPOT trading.
FTX only started seeing growth in spot market offerings starting in 2021, largely thanks to their launch of SPOT margin trading. This exchange is still behind most of the major global exchanges in terms of spot markets. Binance takes the top spot, currently offering over 1,400 active pairs. Huobi and Coinbase ranked second and third, each offering more than 500 pairs
What's interesting about Coinbase is that it used to be behind FTX in terms of spot markets and only recently surpassed FTX by hitting a fast listing time. Coinbase has changed its previously conservative listing strategy largely in response to the rapid growth of both Binance and FTX.
Overall, the suite of products offered by FTX is significantly different from Coinbase's, largely because FTX offers a wide range of derivative products on the platform, while Coinbase does not.
Native tokens on an exchange can also help drive users to the platform if it offers some benefit when used over fiat. FTX's FTT token offers exactly that as it can be used on the platform for collateral, reducing transaction fees, and it can also be staked for profit. All of these benefits combine to give the token a wide range of use cases and, accordingly, drive users towards FTX. Binance has a similar service with its native token BNB but Coinbase does not have such a token. FTX is also one of the only crypto companies to experiment with tokenized shares, which are tokenized versions of stocks, such as Tesla or Twitter.
The development of FTX personnel in the context of the gloomy market
Also notable in recent times is the reduction of staff in crypto companies, as these companies have hired too many employees during the period of the bull market, are now looking to cut back. costs and reduce the number of employees they have. Coinbase, Gemini, BlockFi, and Crypto.com have all cut staff in recent June/July by 10-20%. On the other hand, FTX has maintained a relatively lean operation since they were founded and employs only about 250 people, compared with Coinbase's previous 6,000 layoffs.
Future expectation for FTX
FTX has a portfolio diversification strategy
Over the past time, Sam Bankman-Fried, CEO of FTX, has sponsored both BlockFi and Voyager with loans totaling $750 million. Basically, Sam sponsored Voyager, in which his trading company Alameda Research owns 11% of the shares. According to some reports, Alameda is likely to lose at least $70 million of the investment it has invested in Voyager. Last year, FTX bailed out Liquid, a crypto exchange that lost about $90 million in crypto to hackers.
Although FTX is potentially large enough to handle a lot of things in the near future for example: acquiring some smaller exchanges with riskier business units, staking or lending. If you notice, crypto currency differs from traditional finance in that exchanges/brokers can operate similarly in the same space.
An objective perspective for FTX
Companies with solid financial status, as is the case with FTX, are in a good position with attractive valuations. With a view of FTT – $FTX, after reaching the ATH of $80, has returned to the $2x price zone of mid-2021.
From a short-term perspective: from now until the end of October, it will probably be a reasonable area for holders with an effective capital spread strategy. From a short-term perspective, the market is still in a downtrend and sideways, with investors and users with large trading volumes on the FTX exchange, they can accumulate more FTT to enjoy trading incentives.
In the medium/long term perspective: whether FTX can realize its full ambition, time will tell for all. Holdstation and Banana think that with a medium/long-term perspective, you can consider putting $FTT on the watch list and buying to accumulate assets. In general, the current macro news is quite bad but relatively stable financial resources and structure are the driving force for Holdstation and Banana to have confidence in FTX. With the above mentioned moves in terms of factors: Diversify products to become "all in one platform for traders", invest strategically in high potential companies and maintain the financial structure of the company. the company is stable, the forecast of FTX in 2022-2023 is a positive signal. There will be fierce competition in the bearish season, but FTX is gradually showing itself as a stronghold in the face of market turmoil. Will this be a strong rise and dominance of FTX in the near future? ? Let's follow and observe the steps of FTX in the near future with Holdstation and Banana!
Banana Research Labs's Linktree: https://linktr.ee/brlvn
