Binance US makes BTC trading free of charge as competitors feel the heat

Crypto exchange Binance.US has removed trading fees for spot market trading with Bitcoin (BTC), following in the footsteps of Robinhood, who was pioneering for no commission for crypto trading in 2018.

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

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

The news of increased competition on fees puts pressure on competitors to do the same. Shares of rival US stock exchange Coinbase fell 9.71% on Wednesday, falling to $ 51.91 per share. Robinhood, which is already at low prices through the ages, saw the stock price remain relatively stable at -0.79% to $ 7.49 at the time of writing.

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

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

Shroder told Bloomberg on Wednesday that Binance.US will not earn a spread from its fee-free transactions, and will instead generate revenue from other sources, including a new betting service:

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

He said the zero-trading fees would generate positive user sentiment that would “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 royalty-free trading on four Bitcoin spot market pairs – BTC / USD, BTC / Tether (USDT), BTC / USD Coin (USDC) and BTC / BinanceUSD (BUSD)).

Shroder addressed its 8,200 Twitter followers and added that the company will also roll out a new pricing model, which will take effect this summer.

The tiered system will be divided into three parts, Tier 0, which offers free trading on certain cryptocurrencies, including the recently announced BTC pairs Tier 1 and Tier 2, which will have trading fees 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

Binance.US was formed in 2019, and is the US-affiliated company of the cryptocurrency exchange giant Binance. The exchange is aimed only at US cryptocurrency traders and is managed independently by the parent company.

Robinhood was one of the early pioneers of free stock trading when it was founded in 2014, which prompted a number of online brokers to follow suit in the years that followed. No commission trading for crypto began in 2018. Although it does not charge fees, it is able to earn a spread on its fee-free transactions. In trading, a spread is the difference between the buying (selling) price and the selling price for a trading pair.