Cryptocurrency exchange Binance.US has removed trading fees for Bitcoin (BTC) trading in the spot market, 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 America’s first 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.”
3/ We hope that our pricing model will see broader industry adoption over time, because that would have a positive impact on the ecosystem and market participants in general. We are happy to lead the race towards zero fees everywhere.
I see you in @BinanceUS
—Brian Shroder (@BrianShroder) June 22, 2022
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, already at all-time low prices, saw its share price remain relatively flat 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 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 Wednesday that Binance.US would not be margining its transactions free of charge 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 on four Bitcoin Spot Market pairs — BTC/USD, BTC/Tether (USDT), currency BTC/USD (USDC), and BTC/BinanceUSD (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, Tier 0, which offers free trading in certain cryptocurrencies, including the recently announced Tier 1 and Tier 2 BTC pairs, which will have trading fees determined “per asset.” More information on this is expected in July.
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 by 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 (ask) price and the ask (ask) price of a trading pair.
The best #crypto The platform for low fees just got better. #BinanceUS is the first major platform to offer free of charge #bitcoin trading for BTC/USD, BTC/USDT, BTC/USDC and BTC/BUSD spot pairs, for all users with no trading volume requirements.
— Binance.US (@BinanceUS) June 22, 2022