Binance US Makes BTC Trading Free As Competitors Feel The Heat

Crypto exchange Binance.US has abolished the trading fees for Bitcoin (BTC) spot market transactions, following in the footsteps of Robinhood, who pioneered no-commission crypto trading in 2018.

Binance.US CEO Brian Shroder said the company is the first crypto exchange in the United States to eliminate Bitcoin spot trading fees for all users and with no trading volume requirements. He added that they would not earn a spread on trades either.

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

News of increased competition on fees is putting pressure on its competitors to do the same. Shares in rival US exchange Coinbase fell 9.71% on Wednesday to $51.91 a share. Robinhood, which has always had low prices, saw its share price remain relatively stable at -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 usually depends on the currency pair, the 30 day trading volume and whether the order is a maker or taker order.

Shroder told Bloomberg on Wednesday that Binance.US would not earn a spread from its free trades, instead monetizing from other sources, including a new staking service:

“We are not taking a spread because we are not involved in the transaction.”

He said the zero-fee trading fee would generate 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 trading in the future. Currently, users of the US-licensed exchange can take advantage of free trading on four Bitcoin spot market pairs: BTC/USD, BTC/Tether (USDT), BTC/USD Coin (USDC) and BTC/BinanceUSD (BUSD).

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

The tiered system will be split into three parts, Tier 0, which will provide free trading of select cryptocurrencies, including the recently announced Tier 1 and Tier 2 BTC pairs, where trading costs will be determined on a “per asset” basis. More information on this is expected in July.

Related: Bear market no problem for Binance Labs DeFi incubation program

Founded in 2019, Binance.US is the US affiliate of crypto exchange giant Binance. The exchange is for US cryptocurrency traders only and is independently operated by the main company.

Robinhood was one of the first pioneers in zero-fee stock trading when it was founded in 2014, leading a number of online brokers to follow suit in subsequent years. No commission trading for crypto started in 2018. While it charges no fees, it can earn a spread on its free trades. 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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