Binance US recently made headlines after announcing the resumption of withdrawals. However, Bitcoin (BTC) has been trading at a significant discount, more than $2,500 below the prevailing market price, since then. This unexpected discount on BTC and other cryptocurrencies paired with USD has sparked speculation regarding the future of Binance US and the safety of users’ funds.
On July 10, the BTC/USD value on Binance US was just above $27,500, significantly lower than the prices on other centralized exchanges. In contrast, when BTC was paired with stablecoins like USDT, its value on Binance’s US affiliate aligned with that on other exchanges, amounting to slightly over $30,100.
Discounted Trading of BTC and ETH on Binance US
Interestingly, data from Binance US reveals that most cryptocurrencies listed on the platform have been trading at a discount when valued in USD. However, when these assets were paired with stablecoins like USDT and USDC, their values appeared to accurately reflect the market. Although news of BTC and other crypto discounts gained traction on Twitter on July 9, recent trading data indicates that these price discrepancies actually started emerging around June 21.
The emergence of discounts on all assets paired with USD seems to contradict the previous situation when the U.S. Securities and Exchange Commission attempted to freeze user assets through a court motion. In early June, Binance US reported a BTC/USD value that was $1,444 higher per bitcoin compared to the average global exchange rate, while Ethereum was trading at a $100 premium.
Possible Underlying Issues Revealed by Arbitrage Opportunities
The discounted prices across all crypto assets paired with USD on Binance US may be a result of challenges faced by the exchange’s banking partners. In a message to users on June 23, Binance US announced that it anticipated the discontinuation of USD withdrawal services by its banking partners. As a solution, the affiliate encouraged users to convert their USD fiat balances into stablecoins to continue engaging in crypto-to-crypto trading on the platform.
The appearance of discounted crypto assets paired with USD on Twitter has triggered speculations about the future of Binance US and the security of users’ funds. However, some users are skeptical about considering these price discrepancies as profitable arbitrage opportunities. For instance, Max, a user on Twitter, expressed doubt that the discounts on Binance US indicated a viable arbitrage opportunity. Another user named James Foura characterized the situation as a one-way trade.
“People keep talking about arbitrage on Binance US… it’s a one-way trip, folks. Getting money back in requires crypto that has to be bought at higher prices elsewhere. So it’s basically a wash unless you want to dump your crypto. Can anyone find parity on Coinbase?” Foura remarked in a tweet.
Frequently Asked Questions (FAQs) about BTC discount
What is the reason behind the BTC discount on Binance US?
The BTC discount on Binance US is believed to be linked to challenges faced by the exchange’s banking partners, which has led to price discrepancies for crypto assets paired with USD.
Are other cryptocurrencies also trading at a discount on Binance US?
Yes, according to data, most cryptocurrencies listed on Binance US have been trading at a discount when valued in USD. However, when paired with stablecoins like USDT and USDC, their values appear to align with the market.
Is the BTC discount an arbitrage opportunity?
There is skepticism among users regarding the BTC discount being a profitable arbitrage opportunity. Users argue that it is a one-way trade, as converting back to USD would require buying crypto at higher prices elsewhere.
What steps has Binance US taken to address the situation?
In response to the challenges with banking partners, Binance US encouraged users to convert their USD fiat balances into stablecoins to continue engaging in crypto-to-crypto trading on the platform.
What are users’ concerns regarding the future of Binance US and their funds?
Users have expressed concerns about the future of Binance US and the safety of their funds due to the emergence of the discount and the uncertainty surrounding the exchange’s banking partner situation.
More about BTC discount
- Binance US Official Website
- Binance US Twitter Account
- US Securities and Exchange Commission (SEC)
- Stablecoin USDT
- Stablecoin USDC