maartunn
Binance vs. TradFi Volume Analysis đ
Cryptocurrency is slowly but suddenly stepping into the Traditional Financial (TradFi) Markets, primarily driven by BTC ETFs and a pro-crypto stance in the U.S. under President Donald Trump. This development makes it relevant to compare the TradFi markets with the regular stock indices market. For this analysis, I compare the trading volume of Binance spot (the biggest spot market in crypto) markets with major traditional financial indices, including the Nasdaq, Russell 2000, S&P 500, and Stoxx 600. The visualization spans from January 2024, just before the ETF Launch. Observations in the data: 1. The Binance spot trading volume (represented in blue) is significantly higher than the traditional finance trading volumes. The peaks in the volume data of Binance are aligned with price surges of Bitcoin, and other cryptocurrencies. The volume of Binance is higher in general, but way more sensitive based on the volatility of cryptocurrencies, while traditional finance volumes are more stable. 2. The data shows also a typical thing in crypto, namely it's a 24/7 market. There is no weekend data for the indices, which may sound trivial. But it highlights a fundamental difference approach whereby indices and stock are possible to trade during business hours (and futures for a bit longer), but not during the weekend. The crypto market is always there, open to trade. 3. The sheer scale of Binanceâs trading volume compared to traditional indices suggests that crypto markets remain a highly liquid and speculative space. Despite its high volume, crypto (so far) still operates in a different regulatory and institutional framework. This might change soon, based on the crypto-friendly president in the U.S.