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Investors yank almost $1bn from Binance as exchange ends zero-fee trading

Investors yank almost $1bn from Binance as exchange ends zero-fee trading
Volumes plunged after Binance ended its trueUSD zero-fee trading promotion. Credit: Lafargue Raphael/ABACA/Shutterstock
  • Binance saw almost $1 billion in outflows in September as a zero-fee trading promotion ended.
  • Crypto spot trading volumes could fall below $300 billion in September as liquidity continues to be hard to come by.
  • Users withdrew around $1.3 billion from popular centralised exchanges so far this month.

Bitcoin is heading for a negative quarter and crypto trading volumes have continued to slump.

This month saw investors withdraw more than $1 billion from centralised exchanges. The majority of that number came from an exodus from Binance.

Let’s dig in.

Winter blues

Investors continued to shirk digital assets in September, which investment bank Bernstein attributed to the lingering effects of the FTX collapse.

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Spot trading volumes in crypto markets look set to come in below $300 billion this month, for only the second time since July 2020, according to data from The Block Research.

Crypto exchanges have registered about $264 billion in spot trades as of September 27. If the trend continues, that means volumes fell 40% from $420 billion in August.

The decline was linked, in part, to Binance ending another free trading promotion.

Binance, which was sued by the US Securities and Exchange Commission and the Commodity Futures and Trading Commission earlier this year, ended zero-fee trading on Bitcoin and the TrueUSD this month.

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The volume on the trading pair plunged nearly 90% shortly after, according to CCData.

Binance was at fault for a similar decline in Bitcoin trading earlier this year, according to CoinShares head of research James Butterfill.

“It’s evident that Binance played a significant role in the trading volume decline observed in March,” Butterfill said, linking the decline with with the exchange ending its year-long fee-reduction campaign on 13 spot Bitcoin trading pairs.

Users aren’t just not trading. They’re also pulling funds.

Over $1.3 billion has been pulled from exchanges throughout September, according to DeFiLlama data. Binance saw over $950 million withdrawn.

Huobi and Kucoin users pulled over $150 million and $115 million, respectively. While OKX and Bitfinex users took out over $35 million each.

Crypto market movers

  • Bitcoin added 1.7% as it traded around $26,700. The leading cryptocurrency by market capitalisation is still down around 1.5% over the past seven days, and has declined some 12% this quarter.
  • Ethereum jumped 2.2% to trade back above $1,600.

What we’re reading

Adam Morgan McCarthy is DL News’ London-based Markets Correspondent. Got a tip? Reach out at adam@dlnews.com.