Binance has always been one to defy expectations. The exchange hit the ground running in mid-2017. At the time, some exchanges had been running for years already. This didn’t stop Binance from becoming the largest crypto exchange by daily trading volume. And in the spirit of defying expectations, the exchange has now posted a 66 percent quarter-on-quarter increase in its profits.
Announcing the profits in a blog post, the CEO Changpeng Zhao revealed the exchange had burned 829,888 Binance tokens (BNB). Binance uses 20 percent of its profits to buy back BNB tokens which it destroys in the coin burns. This was its seventh coin burn, destroying BNB tokens worth $15.6 million. This translates to $78 million in overall profits for the first quarter of this year.
In the previous quarter, the exchange burnt 1.6 million BNB tokens. At the time, the price of BNB tokens was much lower and thus Binance had to burn more tokens. With the profits in Q4 last year having stood at $47 million, the exchange registered a 66 percent increase in its profits.
The achievement is even more significant given that the first quarter of the year was quite slow for the crypto industry. Since shedding almost half of its market capitalization in November last year, the market was extremely slow in the first three months of 2019. However, this didn’t deter Binance.
CZ further pointed out the breakaway that BNB had registered when the rest of the market was still going through bearish times. The token started gaining way before the rest of the market caught up. In January alone, BNB registered a 75 percent gain as it burst into the top ten cryptos by market cap.
The Success Story
So, why did BNB gain rapidly when the other cryptos were trading sideways? CZ explained:
Well, I don’t really know. Our mantra has been quite simple, to keep our heads down and focus on building. We kept building all throughout 2018, and 2019. I think that’s really it. We build products that people use and we never stop trying to improve ourselves and our products. Price will eventually catch up to the value you create.
The CEO, who has a cult following especially on social media further attributed Bitcoin’s comeback to Binance. According to CZ, the successful token sale of BitTorrent tokens on Binance’s Launchpad went a long way in reviving people’s faith in the crypto market, he wrote.
CZ further explained why his company brought Launchpad back to life at a time when the market was at its bottom. While the platform helps projects raise funds, it goes beyond just that. It helps raise awareness about a product, introducing it to millions of users whom it would have otherwise missed out on. It leverages the trust people have placed on its brand to bring in not just investors but also some of the first users.
Perhaps the best reflection of Binance’s great performance is the progress that the BNB token has been making. The currency started the year at $6. Two months later it had doubled and as it stands, it has tripled its price, currently trading at $19.5.