Premiums and Volumes Soar Despite Binance’s Setback

Over the last 24 hours, the market experienced intense fluctuations, triggered by the resignation of Binance CEO Changpeng Zhao (CZ). This resignation came in the wake of his guilty plea in a prolonged money laundering case, fueling speculation about a potential downfall of Binance similar to FTX’s collapse. Despite this setback, the market swiftly recovered from its initial downturn. Bitcoin’s value notably bounced back, climbing from a low of $35.5K. Current on-chain data indicates that buyers from the Chicago Mercantile Exchange (CME) are now at the top of market activity, significantly influencing Bitcoin’s trading volume and price premiums.

CME Revives Market Following Binance’s Turmoil

On November 21, markets experienced significant fluctuations following a major development involving the United States Department of Justice (DOJ), Commodity Futures Trading Commission (CFTC), and the U.S. Treasury. These agencies announced a substantial $4.3-billion settlement with the cryptocurrency exchange Binance. Additionally, as part of this settlement addressing criminal and civil cases, Changpeng Zhao, the former CEO of Binance, agreed to plead guilty to charges.

As a result, Binance experienced a substantial capital exodus, leading to a total crypto market liquidation exceeding $227 million. According to Coinglass data, Bitcoin saw total liquidations amounting to over $67 million, with almost $50 million of this coming from long positions.

Interestingly, CME emerged as a significant player in the recent Bitcoin recovery. Institutional investors at CME are currently the most substantial buyers of Bitcoin, placing themselves ahead of Binance exchange. This surge in institutional interest has shown an increase in premium on Bitcoin prices, currently around $600 higher than other platforms.

CME’s data reveals a continued increase in open interest (OI), indicating sustained engagement and investment in the market. Additionally, trading volumes are on the rise again, suggesting a renewed interest among traders. The basis, or the difference between the spot price and the futures price, is slightly lower, hinting at the possibility of some carry trade openings. This trend where futures prices are converging towards the spot prices could be a sign of a more balanced and stable market.

Binance’s Settlement Is The Best Thing

Unlike Wall Street with its distinct opening bell, the cryptocurrency market operates continuously, and traders were generally cognizant of the settlement before the press conference by Garland. This advanced knowledge led to price movements, with Binance Coin experiencing a significant surge to a five-month high, only to retract most of these gains, all occurring before the actual press conference took place.  

In spite of the unfavorable developments concerning Binance, users of the exchange are not hastily withdrawing from the platform or from centralized exchanges at large. Glassnode data indicates that the net change in Bitcoin positions on Binance remains significantly lower than the figures recorded in January and July.

Contrary to the adverse coverage, the market is welcoming the decision as a positive closure to a chapter, optimistic about the industry’s forward movement. Following CZ’s resignation on November 21, Binance, under its new CEO Richard Teng, echoed the sentiment of progress within the community.

Attention in the crypto community is now turning towards the interplay between CME and Coinbase, particularly in the institutional domain. The flow of institutional funds and strategies between these two platforms could significantly impact Bitcoin’s price and overall market trends.

In other developments, investors are considering recent news from Kraken, another leading cryptocurrency exchange. On Monday, the SEC accused Kraken of functioning as an unregistered broker, clearing agency, and dealer, and of blending customer crypto assets with its own.

This marks the second lawsuit against Kraken by the SEC this year. Earlier, in February, the SEC claimed that Kraken had not registered its crypto asset staking-as-a-service program’s offer and sale.