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U.S. online trading firms specializing in crypto were hit hard Wednesday after BinanceUS, an arm of the word’s biggest digital currency exchange, eliminated its bitcion spot trading fees.
BinanceUS will now allow its users to trade bitcoin, the biggest cryptocurrency, against assets such as the U.S. dollar, tether, and other dollar-backed stablecoins for free, eliminating its prior levy of 0.1% on transaction valued at less than $50,00.
The move could ignite some much-needed liquidity into the global crypto market, which has shed billions in value over the past six weeks amid a broader bitcoin meltdown and the collapse of the Luna stablecoin.
“We see this as an opportunity to revolutionize the way fees are approached in our industry, increase accessibility to crypto, and help our market and customers in a time of need,” BinanceUS said in a statement posted on its website.
Coinbase Global (COIN) – Get Coinbase Global Inc Report, which generated $1.17 billion in crypto trading revenue over the three months ending in March, was marked 9.1% lower in pre-market trading Wednesday to indicate an opening bell price of $52.20 each.
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Robinhood Markets (HOOD) – Get Robinhood Markets Inc. Report, which generates a much smaller amount of revenue from crypto trading, was marked 3.3% lower at $7.30 each.
Bitcoin prices were last seen 4.5% lower on the day at $20,129.25 each, a move that extends its year-to-date decline to around 56.4%.
Broader crypto markets, which peaked at $2.9 trillion last year, have lost nearly $1 trillion in collective value over the past two months.
Surging inflation, aggressive signaling on rate hikes by the Federal Reserve and other central banks, as well as rising bond yields and a resurgent U.S. dollar have all combined to add downward pressure on crypto assets even amidst wider adoption from various governments around the world to either add or compliment bitcoin into its national currencies.
The moves prompted cryptocurrency lender Celsius Network to freeze withdraws from its deposit base last week due to what the group called “extreme market conditions”.
That move was echoed by Binance, albeit temporarily, as the exchange cited a ‘stuck transaction’ on the world’s biggest crypto trading platform.
Coinbase, in fact, said last week that it will cull around 18% of its workforce, a level that would eliminate around 1,100 jobs and generate ‘”substantial” reorganization charges amid what it called “another crypto winter” that could “last for an extended period.”
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