Binance US makes BTC trading free as competitors feel the heat

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

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

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

The news of increased competition on fees is pushing its competitors to do the same. Shares of rival U.S. exchange Coinbase fell 9.71% on Wednesday, falling to $51.91 per share. Robinhood (HOOD), which is already at historic lows, has seen its stock price remain relatively stable (-0.79% to $7.49 at the time of writing.)

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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 make or take order.

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

“We are not taking any deviations, as we are not involved in the transaction.”

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

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Speaking to his 8,200 Twitter followers, Shroder added that the company will also be rolling out a new tiered pricing model, which will come into effect this summer.

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

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

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Robinhood was an early pioneer of fee-free stock trading when it was founded in 2014, prompting a number of online brokerages to follow suit in the years that followed. No commission exchange for crypto started in 2018. Although it does not charge fees, it is able to earn a spread on its trades 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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