Since the approval of Bitcoin Spot ETF in January, many have shifted their focus almost exclusively to BTC ETF flows.
This is understandable, as ETFs provide structured and easily accessible information.
Indeed, Coinbase plays a pivotal role in Bitcoin price movements (refer to Image 1).
However, Binance spot trading volume reveals how significant Binance remains in shaping the market (refer to Image 2).
Despite facing major challenges both last year and this year, Binance has managed to maintain its dominance.
Comparing 2020 and the Current Bitcoin Cycle
2020 Bull Cycle
Coinbase Spot Volume: $2–3 billion
Binance Spot Volume: $5–7 billion
2023 Bull Cycle
Coinbase Spot Volume: $3–4 billion
Binance Spot Volume: $10–20 billion
The gap has significantly widened, underscoring Binance's influence on market movements.
Bitcoin Spot ETF and Its Role
While the approval of Bitcoin Spot ETF has brought substantial capital into the market, not all of this capital directly impacts market pricing.
Much of it has been accumulated without significant price movements, often through OTC trades.
I fully agree that Bitcoin Spot ETFs mark a turning point and play an essential role in the market.
Spot vs. Futures Volumes on Binance
The disparity between Binance's spot and futures volumes is critical to observe:
Binance Futures Volume: $60–80 billion, about 4–5 times higher than spot volumes (refer to Image 3).
Key Takeaway
Market prices remain predominantly driven by the liquidity of the futures market, and Binance continues to be a cornerstone of this dynamic.
Written by Mignolet
