Altcoin News: The Block: Binance’s Net Profit for 2018 Was $446 Million
In early July, Binance CEO Changpeng Zhao announced that the company’s net profit for 2018 should be somewhere from $500 million to $1 billion. Apparently, he was a little wrong in the calculations, because, according to The Block, Binance does not have such a profit. They reached the lower limit of the expected amount and amounted to $446 million.
The company does not disclose data on its profitability, however, The Block analyzed the number of BNB tokens burned. Recall that in order to maintain its own token, Binance uses 20% of the profits for its redemption. The ultimate goal is to burn 100 million coins that were sold as part of the ICO in 2017. If the company manages to realize its plans, then only 100 million out of 200 tokens will remain in circulation.
Binance executives submitted six quarterly BNB incineration reports, according to which a total of 10.8 million coins were destroyed. If we assume that the company provides reliable information, and take to calculate the price of the token on the day of combustion, the numbers look like this:
For six quarters, the company’s total profit amounted to about $655 million. The most profitable, oddly enough, was the last quarter of 2017 — just over $200 million. For the entire last year, the company’s net profit was $446 million. However, 71% of this amount is the first half year. In Q3, profits fell by 51% compared with the previous, and in the latter, the figure was even lower by 39%.
The Block notes that the fall in profits is associated not only with a decrease in trading volume but also with investment activities. The company has invested the lion’s share of money in the launch separate fiat-to-crypto exchanges, as well as in the development of DEX. Since October last year, Binance sends all funds charged for listing coins to charity.
Recently, the founder and head of the Huobi Group, Li Lin, shared information about the profitability of his company. According to the data provided, the exchange’s trading fees for 2018 amounted to over $500 million. Huobi Global CEO Livio Weng noted that 70% of Huobi’s income comes from the exchange business.
Author: Marko Vidrih
Image (data) credit: theblockcrypto.com