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Coinbase rival Binance sets price war with zero-fee bitcoin trading

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Binance.US announced a cut of several Bitcoin trading fees, which brought down the stock of several competitors, including Coinbase. The move marks the beginning of the price war and the potential consolidation of the industry amid the crypto winter, which has led to massive layoffs in several cryptocurrency firms.

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On June 21, Binance.US announced it would bring zero-fee trading to all new and existing customers to trade Bitcoin against the dollar, tether, USD coin and BinanceUSD.

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“As the fears of the recession increase and the costs of inflation soar, we hope to deliver greater cost savings on bitcoin and value for everyone in the crypto ecosystem,” Binance.US said in a press release. “While we are already offering 10X lower business fees than other major crypto platforms, we are looking for additional opportunities in this challenging time and providing what we call ‘real exceptional value’, which provides substantial savings to customers who trade BTC. . “

Shares of Coinbase were down 9.7% on June 22 following the news, but have since bounced and are up nearly 6% on Friday.

Steve Bossy, co-founder and CEO of PolySworm, a decentralized, crowdsourced threat-intelligence-security provider, told GOBankingRates that we are now seeing better competition for the market share, especially as many players are bankrupt or are now. On the edge of it.

“Binance and FTX are cash-strapped and Celsius and Voyager are struggling with Blockfi at the moment of acquiring various crypto platforms around the world,” Bussy said. Binance founder CZ and Sam Bankman-Fried, the CEO of FTX, could become kingmakers here, he said.

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“So when we look at major exchanges like Bitcoin, which reduces trading fees on Bitcoin to zero, this is a key signal for competitors. Said.

In fact, the effects of the “crypto winter” are wandering throughout the entire industry. Earlier this month, Coinbase was the latest crypto giant to announce a layoff. The company announced that it would lay off 18% of its staff “to ensure [they] Stay healthy during this recession.

Other platforms, including Robinhood, announced layoffs – saying it would cut 9% of its workforce in April after a period of “hyper growth” – and Gemini, run by twins Cameron and Tyler Winklewos, which cut the company’s workforce by 10%.

Zachary Friedman, co-founder and CEO of digital asset brokerage Secure Digital Markets, told GOBankingRates that Binance’s strong positioning and low fees allow it to capture customers and expand market share. In addition, they believe that the recent layoff among competitors represents an opportunity for Binance to grow.

“With the crypto winter cold settling in, the gap between strong and weak companies is widening. We expect enhanced consolidation and a different landscape in the current market cycle,” Friedman said. “It will be interesting if Binance goes beyond reducing its fees to Bitcoin to include other crypto assets – which puts more pressure on competitors.”

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About the author

Yaël Bijouti-Kennedy is a full-time financial journalist and has written for a number of publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. He also worked as vice president / senior content writer for major NYC-based finance companies, including New York Life and MSCI. Yaël She is now working independently and, more recently, she has served as a doctor. He co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare” with Sean Mannion. (CRC Press, April 2020) He holds two bachelor’s degrees in journalism from New York University and one in Russian studies from the University Toulouse-Jean Juarez in France.

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