Binance U.S. makes BTC trading fee-free as competitors feel the heat

Binance U.S. makes BTC trading fee-free as competitors feel the heat

Cryptocurrency exchange Binance.US has eliminated trading fees for Bitcoin (BTC) spot market transactions, following in the footsteps of Robinhood, which pioneered commission-free cryptocurrency trading in 2018.

Brian Shroder, CEO of Binance.US, said the move makes the company the first US crypto exchange to eliminate Bitcoin spot trading fees for all users and no trading volume requirements. He added that they would also not get a spread on the trades.

“We see this as an opportunity to revolutionize the way fees are approached in our industry, increase accessibility to cryptocurrencies, and better support our market and customers in a time of need.”

News of increased fare competition puts pressure on your competitors to do the same. Shares of rival US exchange Coinbase fell 9.71% on Wednesday, falling to $51.91 a share. Robinhood (HOOD), already priced all the time low, saw its share price remain relatively flat (-0.79% to $7.49 at the time of writing).

Coinbase currently charges trading fees between 0% and 0.50%, Kraken charges fees between 0% and 0.26%, and FTX.US charges trading fees between 0% and 0.20%.

The amount charged as a trading fee generally depends on the currency pair, the 30-day trading volume, and whether the order is a maker or taker order.

Shroder told Bloomberg on June 22 that Binance.US would not earn a spread from its free-of-charge transactions and would instead generate revenue from other sources, including a new staking service.

“We do not take margin, because we are not involved in the transaction.”

He said zero trading fees would create a positive user sentiment that “will bring us new users” and said there are plans to expand the list of tokens that will offer zero fee transactions in the future. Currently, users of the US-licensed exchange can take advantage of free-of-charge trading in four Bitcoin spot market pairs: BTC/USD, BTC/USDT, BTC/USDC, and BTC/BUSD.

Addressing his 8,200 Twitter followers, Shroder added that the company will also implement a new tiered pricing model, which will take effect in the summer.

The tiered system will be divided into three parts, Level 0, which offers free trading in certain cryptocurrencies, including recently announced BTC pairs, Level 1 and Level 2, which will have trading fees determined “per asset”. More information on this is expected in July.

Related: Bear Market Not a Problem for Binance Labs DeFi Incubator Program

Formed in 2019, Binance.US is the US subsidiary of cryptocurrency exchange giant Binance. The exchange caters only to US crypto traders and is run independently from the parent company.

Robinhood was one of the early pioneers of zero-fee stock trading when it was founded in 2014, prompting several online brokerages to follow suit in the years that followed. Crypto commission-free trading started in 2018. Although it does not charge fees, you can get a spread on your transactions without fees. In trading, a spread is the difference between the bid (sell) price and the ask (buy) price of a trading pair.

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