This year, in the first quarter of 2018, Deutsche Bank, Germany’s biggest bank and one of Europe’s leading financial institutions, recorded a profit of $146 million. Binance, the world’s biggest cryptocurrency exchange, recorded a profit of $200 million.
Binance surpassed Germany’s largest and one of Europe’s biggest banks in profitability. Binance, a cryptocurrency startup that was non-existent merely 8 months ago beat out a leading bank that was established 148 years ago. A startup with 200 employees beat out a banking giant with 100,000 employees.
Changpeng Zhao, the CEO at Binance, who is better known to the cryptocurrency space as CZ, wrote on March 3:
“Binance is the world’s largest cryptocurrency exchange. 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.”
For Malta, the relocation of Binance from Taiwan to the European country is a bigger move than Deutsche Bank permanently relocating its headquarters and operations from Germany to Malta. Given the exponential growth rate of Binance and the rapid movement of the cryptocurrency market, the motivation of the government of Malta in embracing the cryptocurrency industry and startups within it is quite evident.
Christian Sewing, who was appointed as the new CEO at Deutsche Bank, stated that the bank will move away from hedge fund investment and focus on stabilizing on a few areas the bank where the bank is still dominant. With an $800 million restructuring plan and a massive cut of employees, the bank aims to generate profits by the end of 2018.
“Deutsche Bank is deeply rooted in Europe – here we want to provide our clients access to global financing and treasury solutions. This is what we will focus on more decisively,” Sewing told Reuters.
The valuation of the cryptocurrency market is currently hovering around $400 billion, which is less than the combined market caps of HSBC and JPMorgan. The cryptocurrency market is still at its early stage and considering that only bitcoin has been around from 2009 to 2015 until the creation of Ethereum and the tokenized ecosystem, the cryptocurrency industry is really less than five years old.
The fact that startups with about 200 employees have reached multi-billion dollar valuations and beat out major banks such as Deutsche Bank in profitability demonstrate a healthy long-term development of the cryptocurrency market.
As long as the demand for the cryptocurrency market can be sustained and institutional investors continue to enter the space, similar to how Binance has been able to surpass Germany’s biggest bank in less than 8 months of existence, it is possible that cryptocurrency businesses take over the global finance industry in the next decade or two.
The exponential growth rate of the market shows the possibility of million-dollar bitcoin price predictions by experts like Tim Draper and Peter Thiel.
Featured image from Shutterstock.
Last modified: March 4, 2021 5:06 PM