According to Brian Shroder, CEO of Binance.US, the decision makes it the first cryptocurrency exchange in the United States to do away with spot trading fees for Bitcoin for all users, regardless of trading volume. Additionally, they wouldn’t be collecting a spread on trades, he continued.

Binance.US claims to have some of the lowest trading commissions in the business. Previously, the exchange assessed a 0.1% spot trading fee for trade volumes of less than $50,000 in Bitcoin. According to its website, it charges users lower fees the more they trade.

Will generate revenue from other sources: Binance.US

According to Brian Shroder,

“We see this as an opportunity to revolutionize the way fees are approached in our industry, increase accessibility to crypto, and better support our market and customers in a time of need.”

Binance.US would not be making a spread from its no-fee transactions, according to Shroder. He told Bloomberg on Wednesday that the company would instead make money from other sources, such as a new staking service.

“We take no spread because we are not involved in the transaction.”

Its competitors are now under pressure to follow suit after the announcement. Coinbase saw its shares fall on Wednesday, down 9.71% to $51.91. The share price of Robinhood, which is already at an all-time low, was stable at $7.49, at the time of writing.

Currently, Kraken charges between 0% and 0.26%, Coinbase charges fees between 0% and 0.50%, and FTX.US charges fees between 0% and 0.20%.

The amount of the trading fee is influenced by the currency pair, the 30-day trading volume, and whether the order is a maker or taker order.

It is the most recent illustration of how businesses, including established brokerages and newer online startups, are reducing or eliminating fees to draw in individual investors. Some brokerages have transferred unused client funds from brokerage accounts into banking products to make up for lower transaction fees.

Others have engaged in a technique known as payment for order flow whereby they channel consumer orders to electronic trading companies called market makers. In fact, according to Shroder, the business would also be introducing a new tiered pricing scheme, which will take effect in the summer.

Bear market giving tough times to exchanges

The announcement comes as the price of major cryptocurrencies, including Bitcoin, has fallen precipitously since last year. Investors have been selling speculative assets like cryptocurrencies as the Federal Reserve keeps raising interest rates to control inflation. Some exchanges have been taken off guard by declining investor interest and a reduction in trade activity.

According to data provider CoinGecko, one of the biggest cryptocurrency exchanges by trading volume is Binance.US. Ergo, the impact of this update is likely to be significant.