Monitors display Coinbase signage during the company’s initial public offering (IPO) at the Nasdaq MarketSite in New York, the United States, on Wednesday, April 14, 2021.
Michael Nagel | Bloomberg | Getty Images
Coinbase shares fell Wednesday after rival crypto exchange Binance.US said it was dropping certain trading fees for customers.
Binance.US, the US subsidiary of the world’s largest crypto exchange by trading volume, said it will allow users to make spot bitcoin trades for the US dollar and stablecoins Tether, USD Coin and Binance USD without spot pay trading fees.
Coinbase shares are down more than 3% as of 9:42 a.m. ET. Robinhood shares lost about 1%.
Binance.US’ move comes amid an extended bearish streak for cryptocurrencies, which was part of the broader sell-off in risky assets that has been taking place throughout the year. Last weekend, Bitcoin hit a new 2022 low, falling below $18,000 for the first time since December 2020. As a result of the ongoing declines, trading volumes on crypto exchanges have declined.
Coinbase has historically relied heavily on trading volumes for revenue, but has sought to diversify its revenue streams in recent months. It is currently testing a subscription service for customers called Coinbase One, which would give them access to fee-free trading for up to $10,000 in transactions per month.
The fee-free trading phenomenon, first introduced by Robinhood, began making a dent in the retail investing world a few years ago when major stockbrokers switched to commission-free online trading, including Charles Schwab, Fidelity Investments, E*Trade Financial, Ally Invest and Interactive Brokers.
This is now hitting the cryptocurrency world as more investment platforms focus on bringing stocks and crypto trading experiences together in one place. Robinhood, which had its beginnings trading stocks for retail investors, has since started prioritizing crypto trading for clients. Last month, crypto exchange FTX US unveiled plans to launch commission-free stock trading. Block’s Cash App, SoFi, and Public all offer trading in stocks and crypto as well.
