Binance Is Now More Profitable Than Deutsche Bank

Digital currency exchange Binance leapfrogged Germany’s largest bank in terms of profitability in the first quarter, offering yet another compelling sign that cryptocurrencies are revolutionizing finance.

Binance Surges in Profitability

The Binance digital currency exchange generated profits of $200 million in the January-March period, vastly outperforming Deutsche Bank, which recorded net gains of $146 million. The bank’s first-quarter profits, which were announced Thursday, significantly undercut analysts’ projections of nearly $456 million. They were also down 79% year-over-year.

Astonishingly, Binance managed to overcome one of Europe’s largest financial institutions after just eight months of operation. By comparison, Deutsche has been in business for the past 148 years and currently employs more than 100,000 people.

Binance’s surge in profitability was announced by company CEO Changpeng Zhao early last month.

“Binance is the world’s largest cryptocurrency exchange,” Changpeng wrote on Mar. 3. “In the first 3 months from inception, profits amounted to $7,500,000 USD. In the 2nd quarter, profits amounted to $200,000,000 USD. The 3rd quarter is still in progress,and is expected to have further growth. Any country that can attract Binance to open a branch in their location will receive a handsome tax income revenue.”

Binance is based out of Hong Kong but has announced plans to move operations to the crypto-friendly jurisdiction of Malta.

Cryptocurrency Exchanges

Cryptocurrency exchanges have witnessed an upsurge in demand since the bull market began in early 2017. At the height of the rally, many exchanges were forced to put a temporary freeze on new registrations to beef up their infrastructure. Although the market has cooled significantly from its peak, major exchanges like Binance continue to process billions of dollars in transactions per day.

As of Thursday, Binance was the world’s largest cryptocurrency exchange by trade volumes, processing more than $2.5 billion in transactions. South Korea’s OKEx and Upbit each processed more than $2.1 billion in trades.

More than $27 billion was transacted on the major exchanges on Thursday, according to CoinMarketCap.

That said, cryptocurrencies generate significantly fewer trades than the more established financial markets. This has led to liquidity constraints that contribute to volatile swings in cryptocurrency prices.

For many, institutional uptake of digital currencies is essential to smoothing out price volatility. Efforts are currently underway to bring crypto assets to mainstream circles by way of exchange-traded funds and futures contracts. On Wednesday, the head of Nasdaq indicated that the technology-focused exchange would welcome cryptocurrencies once proper regulations were in place.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi