Are crypto trading fees going to zero? – techcrunch

it took time To reduce equity trading fees from high to high, costly to zero. A similar price cycle may occur in the crypto world, albeit at a faster pace.

Binance.US, an American crypto company that holds the famous Binance at arms reachannounced this week that it is reducing trading fees for certain bitcoin trading pairs. trick made waves Because the market has created some incredibly large businesses to facilitate crypto trades for fee-based income.

The exchange explores startups, markets, and money.

Read it every morning on Meczyki.Net+ or get the Exchange newsletter every Saturday.

In the wake of Binance.US news, shares of US crypto exchange Coinbase lost 9.7% of their value during regular trading on Wednesday.

Exchange Banner Sq Gry PlusWhat seems remarkable at the moment is that it appears that the market did not anticipate a directional move by the US exchange to reduce its overall fee profile and reduce some trading emoluments to zero. But the writing has been on the wall for some time when it comes to trading fees; Binance.US is only continuing a long trend.

Fees are reduced

Coinbase built a huge company based on consumer trading fees.

to the company Q1 2022 Earnings Report, retail and institutional traders held the same amount of crypto assets on Coinbase with $123 billion and $134 billion respectively. But while they had similar assets on Coinbase, institutional trading volume was far higher, totaling $235 billion in the first quarter, compared to just $74 billion in retail trading.

So Coinbase made more money from institutional traders than retail activity, yes? No.

In fact, quite the opposite. Coinbase retail trading revenue for the first quarter of 2022 was $965.8 million, while the value of institutional activity was much lower than $47.2 million. More simply, Coinbase pays a fee to retail merchants to buy and sell digital assets. (This morning, Coinbase announced A shakeup for its consumer trading business, but with the company saying that its new service will offer “volume-based fees similar to Coinbase Pro,” it’s unclear what effect the change will have on the company fee currency.)

This is why the move by Binance.US to cut some bitcoin trading fees to zero cases – bitcoin made up 25% of Coinbase transactional revenue in Q1 2022, up from 16% in Q4 2021. The small exchange is attacking where Coinbase makes its living.