In wake of its competitor Binance announcing yesterday that it’s dropping certain trading fees for its users, Coinbase’s shares have fallen by almost 10%.
More specifically, the announcement from the world’s largest crypto exchange stated that it will begin allowing users to make spot bitcoin trades for the US dollar and certain stablecoins like tether, USDC, and Binance USD without paying any spot trading fees, nor having to adhere to any trade volume requirements.
Subsequently, Coinbase’s shares fell 9.7%, whilst Robinhood, Binance’s fellow advocate for zero-fee spot trading, saw its shares fall by less than 1%.
The move comes in response to the ongoing bearish crypto market which recently caused bitcoin’s price to hit a 1.5-year low of $18,000. As a result of such price depreciation, bitcoin’s trade volume across crypto exchanges has tumbled, which is a market condition that Binance hopes to improve through the change of its trading fee policy.
Binance is not the first exchange to roll out such market stimulating practice, as Robinhood initially got the zero-fee trading ball rolling back in 2018, with the likes of Webull following suit, as well as FTX US which recently revealed its plans to roll out zero-commission stock trading.