Coinbase shares fall after rival Binance.US drops spot bitcoin trading fees

Investing

Monitors display Coinbase signage during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, U.S., on Wednesday, April 14, 2021.
Michael Nagle | Bloomberg | Getty Images

Coinbase shares fell on Wednesday after rival crypto exchange Binance.US said it’s dropping certain trading fees for customers.

Binance.US, the U.S. affiliate of the largest crypto exchange in the world by trading volume, said it will allow users to make spot bitcoin trades for the U.S. dollar and stablecoins tether, USD Coin and Binance USD without paying spot trading fees.

Shares of Coinbase were down more than 6% around 11:40 a.m. ET. Robinhood initially fell on the nes but have pared losses and were last down less than 1%.

The move by Binance.US comes amid an extended bearish period for cryptocurrencies, which has been part of the broader sell-off in risk assets that’s been taking place all year. Last weekend, bitcoin hit a new 2022 low, falling below the $18,000 level for the first time since December 2020. As a result of the continued declines, trading volumes on crypto exchanges have been sliding.

Coinbase historically has relied heavily on trading volumes for revenue but in recent months has been looking to diversify its revenue streams. It is currently testing a subscription service for customers called Coinbase One that would give them access to zero-fee trading for up to $10,000 in transactions a month.

The zero-fee trading phenomenon, first introduced by Robinhood, began putting a dent in the retail investing world a few years ago, when major stock brokerages shifted to commission-free online trading, including Charles Schwab, Fidelity Investments, E*Trade Financial, Ally Invest, and Interactive Brokers.

That’s hitting the cryptocurrency world now as more investing platforms focus on joining equities and crypto trading experiences in one place. Robinhood, which got its start in stock trading for retail investors, has since started to prioritize crypto trading for customers. Last month, crypto exchange FTX US, revealed plans to roll out zero-commission stock trading. Block’s Cash App, SoFi and Public all also offer trading in both stocks and crypto.

Articles You May Like

Scottrade Online Broker Review – Trading on the Website (Part 2)
SPACs wipe out half of their value as investors lose appetite for risky growth stocks
What bear market? This token is quietly making new highs, up 300% against Bitcoin in 2022
Scott, other GOP senators join Toomey’s fight with the Fed
New York City Sellers: Should You List This Summer?