Binance Review: Key Things to Know
Should you trade with Binance? Although there are some key things to know, overall, Binance is a staple in the cryptocurrency industry and is currently the largest exchange for a reason.
In a matter of three years, Binance has grown to become the largest cryptocurrency exchange worldwide, reaching daily trading volumes as high as $37 billion (as of 25 November 2020). The exchange was the brainchild of Chinese-Canadian cryptocurrency billionaire and business exec Changpeng Zhao.
The exchange does not only graciously support simple buying and selling of countless cryptocurrencies but also advanced trading on multiple products and platforms. Clients can use various packages to trade well over 150 cryptocurrencies.
As a testament to their influence, Binance has its own cryptocurrency named Binance Coin, which is presently the 10th most traded digital currency. Any existing clients of the exchange who own this token are incentivized by lower fees and using the token to invest in ICOs (initial coin offerings) through the company’s Launchpad program.
Although much praise is due to Binance, what about the drawbacks? This review will dive deeper into their products and see how suitable they are for those interested in using their services.
Binance’s fees are among the lowest compared to other cryptocurrency exchanges. The average flat trading fee for most is 0.25%. With Binance, this figure is at 0.1%. The 0.1% is, in fact, the highest spot trading fee and only applies if your trading volume is less than $50 000 per month.
The exchange applies a tiered structure for their fees by way of VIP levels ranging from VIP 0 (0.1%) to VIP 10 (0% to 0.02%), according to your 30-day trading volume. Like many exchanges, Binance uses the taker-maker fee model. This design stipulates how liquidity works in any cryptocurrency trade.
There are always two parties involved: the maker and taker. The ‘maker’ is responsible for adding volume to the order book, while the ‘taker’ essentially takes away liquidity in matching their orders with the maker.
Additionally, Binance also has its own digital coin known as Binance Coin (BNB), a native token on the ERC20 standard of Ethereum. By holding these tokens with Binance, the exchange incentivizes users with up to 25% discount on trading fees.
Clients can get to enjoy numerous active and passive trading opportunities with Binance. Whether a customer desires to trade cryptocurrencies actively or buy and hold, the exchange offers the best of many worlds. Namely, the trading methods they provide are Basic, Classic, Advanced, Margin, OTC, and P2P:
Basic (simple buying and selling crypto)
Classic (trading using a simple interface)
Advanced (trading using a more advanced interface)
Margin (using leveraged trading with their platform)
Buying or selling OTC (over-the-counter rather than their exchange, allowing for larger settlements at better pricing)
P2P (buying and selling among other registered users on the network)
Depending on the package chosen, not all cryptocurrencies may be available on each one.
Another interesting product that Binance offers is Tether-margined and Bitcoin-margined futures. Like regular futures, Binance allows investors to speculate on the future of both instruments (Tether and Bitcoin) without the need to own the underlying asset, which is an alternative route of gaining exposure to these currencies.
For added convenience, clients do not have to worry about different expiry dates, as is the case with ordinary futures. Binance leverages these futures up to 1:125 leverage depending on the notional value of the positions.
For more passive and non-trading investment opportunities, Binance also offers:
Flexible saving, fixed saving, and staking with crypto
A mining pool for miners
A Binance-branded VISA card to transact using cryptocurrencies
Crypto loans using crypto assets
Requirements for opening an account
In the realm of cryptocurrencies, KYC (Know-Your-Customer) standards are still relevant, especially in eliminating money laundering, fraud, or any other financial malpractice. Binance is one of the many reputable exchanges that support enforcing KYC.
For clients to gain access to all their products and services without limitations, they will have to provide proof of identity (government-issued ID, driver’s license, or passport) and proof of address (bank statement or utility bill) not older than three months.
Deposits and withdrawals
The exchange offers several convenient deposit methods for clients:
Cryptocurrency deposits through different wallets that Binance support
VISA and Mastercard credit/debit card
Third-party payment via Banxa and Simplex
Withdrawal fees vary widely according to the digital currency in question. Customers have the option of withdrawing Binance-supported digital currencies to external wallets or crypto-to-fiat money.
Depending on how busy the network is, wallet transfers typically take roughly 30 minutes to be processed. At the same time, fiat money withdrawals should reflect between two to three business days in the client’s account.
Platform and analytical research tools
Binance avails their trading platform on the web, in addition to being downloadable for Windows, Mac desktop users and Android, iOS smartphone users.
For research purposes, the brand provides institutional-grade reports by analyzing current happenings in the crypto market. The Launchpad further improves this aspect by giving users access to new project launches by unveiling details, whitepapers, timelines, and ultimately allowing them to invest in the ICOs.
Pros and cons
Overall, Binance’s firm lead among cryptocurrency exchanges is clearly evidenced by the broad range of products and services they offer, catering for the beginner all the way to the most die-hard investor.
The few small drawbacks pale in comparison to the distinct advantages they offer to users. Therefore, Binance is a highly-recommended cryptocurrency exchange for trading and investing purposes.
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