July 15, 2019 | AtoZ Markets - In spite of the spike in price Bitcoin has shown so far this year, climbing over 200%, pricing the coin at around $14,000, after the drastic decline over the period before where it fell down to $3,500 per bitcoin, a surprising warning comes from the world’s largest cryptocurrency exchange by volume; Binance, reading that it was not the institutional demand that drove the recent bitcoin rally, and the market is still prone to probable volatility to a worse extent even.
The warning came in a comment by the exchange’s chief executive Changpeng Zhao, who said:
"We have not seen institutions growing faster. What we’ve seen is a pickup in both places. The number of institutions coming into this industry has not increased that tremendously in 2019 yet."
That comes from the fact that retail investors still occupy 60% on the exchange, meaning the number has not grown since the last year, as per CZ.
Margin trading is a player here!
As crypto analysts read, in the light of the hectic competence in the market today, this figure is still good for Binance to retain amid the variation in margin trading among the rallying exchanges.
Margin trading, which allows the investor to borrow against their deposit, could have played a role keeping that figure rather still on Binance’s indicator, in addition to influencing the bitcoin price.
That goes back to a reason of course that Binance allows three times the deposit to borrow, where another bitcoin exchange competitor; Bitfinex, allows up to one hundred times the deposit.
In a phone interview with Bloomberg, CZ recently expected that there would be more demand on margin trading, saying, “I would say the majority of people by the end of the year will be using margin in some capacity. It is quite safe to use to be honest. There will be more trading volume and potentially higher volatility."