Binance's entry into the Thai digital asset industry should increase competition, decrease trading fees and encourage productivity and improvements in service quality, according to leading market participants.
Gulf Energy Development (Gulf), a major energy and telecom firm, announced on Jan 17 its subsidiary Gulf Innova signed a memorandum of understanding with Binance Group, the world's largest cryptocurrency trading platform, to establish a digital exchange and other related business in Southeast Asia and Thailand.
The cooperation announced Gulf and Binance as a major player in the Thai digital asset market and may prompt Bitkub Online, the current leader with a 90% market share, to adjust its business strategy, said Suwat Sinsadok, director and manager of FSS International Investment Advisory Securities.
Gulf is a rapidly growing energy business with a vision to expand its business to technology and other industries to avoid monopoly, said Mr Suwat.
Once it gains 30-40% of the market share in each industry, it looks to invest in other businesses, he said.
In 2021, Gulf entered the telecom industry by investing 48.6 billion baht and acquiring a 42.25% stake in Intouch Holdings Plc (INTUCH), which holds roughly 40% of Advanced Info Services Plc (AIS), one of the country's largest mobile and telecom companies with a customer base of about 44 million users.
"It is worth noting that Gulf is interested in investing in high-growth and market-dominant businesses in a certain industry, with an aim to dominate the market in terms of market share," Mr Suwat said.
With cooperation from Binance, Gulf has a chance of becoming the largest player in the Thai digital asset industry as well, he said.
According to CoinGecko.com, Binance ranked first among 500 cryptocurrency trading platforms in terms of trading volume at US$13.9 billion per day.
Piriya Sambandaraksa, a specialist in price analysis and blockchain technology as well as founder of investment education website Chaloke Dot Com, said it remains to be seen whether Bitkub Group and SCBx can maintain its market share and remain No.1 in the digital asset business.
He said the technology industry ecosystem is changing fast.
With the coming of the metaverse, many novel businesses will emerge, constantly disrupting the industry, Mr Piriya said.
Suppakrit Boonsat, president of the Thai Digital Asset Association, said investors are likely to benefit from the increased competition because local digital exchanges will try to attract customers by lowering their fees and improving their services and investment products.
Jirayut Srupsrisopa, group chief executive of Bitkub Capital Group Holdings, said the cooperation between Gulf and Binance has not yet been finalised and the company needs more time and information to assess how the cooperation will affect Bitkub.
Mr Jirayut believes the industry still has plenty of room for growth this year.
The hottest trends in 2022 will be non-fungible tokens, decentralised finance and game decentralised finance, and customers can expect more products related to these trends from the real sector, he said.
