Binance's victory over FTX means more users are moving away from centralized exchanges

Binance faces much less competition in the wake of FTX's fall, but it may still not attract an increase in the number of new users.

Based on joint statements on Twitter this week from Binance CEO Changpeng “CZ” Zhao and FTX CEO Sam “SBF” Bankman-Fried, it seems clear that FTX has serious solvency issues – so serious that few on the market are ready to save it. As a result, FTX is looking to CZ as a potential buyer.

After CZ exposed FTX's problems earlier in the week by announcing plans to sell $500 million of its FTX (FTT) token on the market, the companies said on Nov. 8 that they had concluded a non-binding agreement for Binance to buy FTX. This is a tentative deal which means Binance can exit at any time without consequences, and I personally think it's highly unlikely that the acquisition will ever be finalized.

Although SBF is the sixth-largest individual political contributor in the United States (it has given a total of $39.8 million to the Democratic Party over the past year), it should be noted that the money does not did not allow FTX to operate in the United States. Owning FTX would not give Binance any market access beyond what it already enjoys.

From a market share and platform perspective, FTX does not offer any unique value to Binance (as a company like Twitter might). For all business units offered by FTX, Binance has competitors of equal or even better quality, including spot and derivatives trading platforms, staking products, and the ecosystem of startups that build on its platforms. . (This could extend to Solana, where FTX-funded startups compete with those on Binance's BNB chain.) Binance will naturally win FTX's customer base if FTX fails, whether or not they strike a deal. OK.

The non-binding agreement includes a period of due diligence, which gives SBF some breathing room to find other buyers on Wall Street. But the odds of that happening seem increasingly slim with Binance involved, as potential buyers would be forced to keep the company afloat despite CZ's constant nudges.

As part of Binance's exit from FTX capital...