Binance Ends Wealth Effect of Exchanges, Trump Starts New Wave of Wealth Creation

Author: Zuo Ye, Crooked Neck Mountain

Having a variety of asset classes does not equate to a strong wealth effect.

In 2021, CZ confidently stated, "Centralized exchanges are merely an intermediate step towards on-chain DeFi."

By 2026, in his year of knowing destiny, CZ gambled his entire reputation in an attempt to violently initiate a second spring of Meme trading.

Moral criticism is utterly powerless in the face of a $73.7 billion fortune, but the P2P transfer system envisioned by Satoshi Nakamoto has inevitably become a grand backdrop for PVP.

If we trace the history of exchanges as a timeline, 2026 marks the worst year in terms of liquidity and reputation. BitMEX, the inventor of Perp, failed to sell itself and ultimately shut down, AB Finance perished before it could even start, and OKX, immersed in compliance, gradually faded away, not to mention a founder more concerned with competitors than with himself.

The universe's exchange, Binance, views U.S. stocks as a lifeline, but its main task is to surpass Hyperliquid's second-order TradeXYZ.

Universal brokerage or a gamble on on-chain transformation is no longer an ideological battle; it will directly determine whether a company can continue to survive.

No one knows whether a crypto world without CEX will rely on on-chain to disrupt traditional finance or, like Mentougou and FTX, take away all confidence.

But at least now is the time to seriously consider writing a phased summary for exchanges; the choice at this turning point will derive specific wealth opportunities from the grand narrative.

Retreating and Advancing: Will Robinhood Save Liquidity?

"Coinbase's Alibaba transformation, large acquisitions failed to open a second growth curve."

The story of universal brokers, which began in 2025, merely encountered Perp DEX/PM/Stock/Pre-IPO in 2026, with U.S. stocks, Korean stocks, and even A-shares being swallowed by CEX.

However, the rich variety of SKU categories has never been able to create a profit effect. Foreign monk Sam and local Fat Donglai have both proven that review standards can create trust, and thus earn excess profits on this basis.

In this regard, Coinbase and Robinhood serve as contrasting examples.

Coinbase has made every effort to rescue itself, whether through the Base chain's push for "Web3 Meme social" or the acquisition of options product lines like Deribit and Opyn.

But the louder the slogan of Everything Exchange, the harsher the reality gap.

Image Caption: Buying Power Cannot Be Bought

Image Source: @zuoyeweb3

If we calmly analyze Coinbase's financial data, I would maintain a sense of awe towards institutional DeFi, which speaks highly of Lending protocols. The money from banks and pensions amounts to trillions of dollars, but how much liquidity can it bring? Please take a look at Coinbase.

As for letting institutions bet against prediction markets or participate in Stock Perp point competitions, it is closer to a moment of fantasy.

Everyone needs to be clear: referring to the revival of the Wall Street alliance chain Canton, Robinhood's Meme, NFT, DeFi, and even introducing dYdX to create new products like Perp DEX Arcus, it is evident that the crypto circle's gameplay is the only way to survive.

Catering to others will never be as good as sticking to oneself.

Western CB and RH are gradually forming a competitive stance, which is a significant change not seen in the decade since Binance's rise to the top in 2017.

However, this does not rely on the iterative upgrade of U.S. products but on the growth fatigue of offshore exchanges like Binance.

There is no need to use data to prove Binance's predicament; just knowing that the VIP standards of Binance have been repeatedly lowered, and its BTC trading volume has frequently stalled is enough.

Of course, there are surprises; the options business long monopolized by Deribit is showing new changes.

Bitget is attempting to develop business lines like FCN fixed interest notes, which is essentially a dual-currency win transformation. Similarly, Bybit's options product line is also making rapid progress, and Deribit has even been dragged down by Coinbase, with its overall share declining further.

But this is not a good story of the East rising and the West falling. Complex derivatives like options have consistently maintained a share below 5% compared to the simple and easy-to-understand Perp. We need to think about whether the simplification of complex financial products can support the next stage of exchanges.

This is not a question that can be decided immediately, but it is likely a rational choice for second-tier exchanges in the post-crypto era.

The so-called universal brokerage business is what Binance needs to consider. Most second and third-tier small exchanges need to rely on the richness of SKU to find viable regional markets and barely earn a channel fee.

If Alpaca behind bStock is already considered a mini partner, then the channel Atomic Vaults behind Bitget Stock+ may have fewer than 10 people. Welcome to the real business society.

Separation and Reunion: What Are the Gains and Losses of Identity Exchange?

"Dual-currency win and perpetual contracts prove that yield products and trading products can be mutually transformed."

Currently, CEX is undergoing a round of soul exchange:

• DeFi and CEX, TGE business has cooled down, on-chain DeFi needs to go through CEX to distribute real business, such as R25 distributing Phraos tokens through Binance, backed by Southeast Asian consumer loans;

• CEX and TradeFi, RWA Perp/Stock Perp are just the most dazzling representatives. TradFi on-chain is already in progress, but CEX has little business increment facing them.

This is different from CZ's belief in 2021 that Binance would eventually become a DEX. The current DeFi financial stack is no longer something that can be summarized by a few forms like DEX Lending.

Image Caption: Covering the Disappearance of Wealth Effect

Image Source: @zuoyeweb3

For exchanges, Coinbase proves that retail trading is indispensable, while Binance proves that new assets do not need old platforms.

The incremental growth of CEX is mainly concentrated in a few businesses like stocks, but beyond KOL tweets and paid reports, the overall trading volume of exchanges has nearly halved. In a declining market, it is impossible to compensate for collective blood loss.

Even Bitget Wallet's million BD marketing is essentially a transmission of chill; departments that pull in users need to prove they can make money, much like the code players supporting the revenue of Macau VIP lounges.

Here, we do not analyze the failure of exchanges regarding Pre-IPO and Stock Perp; the battle for pricing power of unlisted assets: the pricing power war of Pre-IPO has already been introduced in the exchanges' PB business.

The reason boils down to one sentence: exchanges have no pricing power over new assets like stocks.

However, it does not mean that the crypto circle will completely lose pricing possibilities. We are filled with the logic of exchanges, often afraid to imagine other possibilities.

But precisely the memory maker Changxin was preemptively priced by TradeXYZ, and the robotics company Yushu Technology, whether it can again be traded at a reasonable price by the world, we can just observe.

The issue is no longer complicated; how to regain the asset pricing power "stolen" by Wall Street becomes the beginning and end of all games. Pre-IPO is merely the opening segment of a major exam.

This is not to say that Pre-IPO and Stock Perp are unimportant, but please note that the underwriting, new issuance, trading, and PB services of IPOs are still fully controlled by the traditional financial system. Occasional on-chain occurrences are merely a left hand to the right hand.

Do not say exchanges; public chains and stablecoins have not gained any benefits. After Robinhood Chain completed its cold start relying on Meme, it will still head towards real financial business.

However, exchanges cannot do this. What exchanges truly provide is the "wealth effect," or more bluntly, the multiples of explosive growth. Only under this premise can Perp/Dogecoin and PumpFun find common ground.

But after the tide recedes in the TGE system, exchanges have no capacity to forcefully pump prices and can only passively share the leftovers after Wall Street's arrangements.

It must be that something unique to the crypto circle is sold to the mass market, rather than selling something from the mass market to the crypto circle. The crypto market is too small to support such consumption, leading to an inability to innovate and then sell to the mass market.

Reunion After Separation: Stealing the Traditional Trading System

24-hour trading drags exchanges into a more familiar battlefield of slaughter.

The previous discussion is about the predicament of exchanges, mainly betting on the dead end of institutional DeFi. Here, I will add that CB claims institutional DeFi is reasonable, which is a story Wall Street can understand.

With the U.S.'s natural control over public opinion, it naturally evolves into an industry consensus. We have survived in this environment for many years, and it is not complicated for everyone to understand.

One-dimensional people cannot imagine a story without exchanges. Without Wall Street, we wouldn't even have the imagination.

If we break free from all this, how to envision a survival path under a non-American consensus will feel difficult to start. Let's start from the most fundamental liquidity.

Image Caption: Exchanges Are Still Making Money

Image Source: @LorenzoARK

To correct a misconception, the difficulties of exchanges are not due to not making money, but rather continuing to maintain a lack of exorbitant profits. In the entire industry profit-sharing pattern, exchanges are still more profitable than DeFi and stablecoins combined.

It can even be further deduced that the institutionalization of American finance is a predetermined route, and crypto is merely following the pace of U.S. stocks, which is not surprising.

In the exchange of CEX and TradFi, Nasdaq plans night trading and has thoughtfully designed it for daytime hours in Asia, 5X23h to meet the needs of Asian investors. The new cold war is a technology (stock) war, and the competition for each other's or international liquidity will give birth to many new opportunities.

Thus, Binance has taken Changxin's contracts, but the demand from Asian investors has never been about leveraging. A-shares do not allow short selling, which never leads to heat or recession.

Therefore, the superficial stealing is the reverse domestication of exchanges towards Wall Street, selling Pre-IPO and super brokerage to American institutions, but the real stealing lies in how to arbitrage globally in a regulated financial market.

Conclusion

Exchanges are gradually retreating to the second line, playing the roles of matching and recording, ultimately becoming the launch station for various Pre-IPO and Stock Perp, forming a new financial stack with the stock market and DeFi.

The historical mission of exchanges does not end with OKX's compliance, nor with Bitget's late C2C, but lies in CZ's market manipulation behavior, still relying on Meme. Exchanges have become powerless to create new asset issuance paradigms.

An era has come to an end. What we see now is merely the dying struggle of a sunken ship. Looking forward, do not look back; seek new asset issuance methods.