A Deepening Price Discrepancy: Binance.US’s Crypto “Depag”
Crypto enthusiasts woke up to an unexpected market anomaly on July 9. A pronounced price discrepancy had begun to emerge between cryptocurrencies listed on the United States crypto exchange, Binance.US, and their global spot prices. This so-called “depeg” of cryptocurrencies has raised eyebrows among industry watchers.
Bitcoin is currently trading at a near $3,000 discount on Binance.US. At $27,536 against the U.S. dollar, this represents roughly an 8.5% discount from the global spot USD price of $30,106 at the time of writing.
Not Just Bitcoin: Other Cryptocurrencies Follow Suit
The price differential isn’t limited to Bitcoin. Ethereum prices are also trading at a discount in U.S. dollar terms, approximately $200 cheaper on Binance.US, trading for $1,695 at the time of writing. Even certain stablecoins like Tether have seen their pegs slip, with Tether trading at $0.915 on the exchange.
A Catch for Potential Arbitragers: USD Deposit Suspension
While these crypto discounts may seem like an open invitation for arbitragers, most investors will not be able to capitalize on them. The catch lies in the fact that these discounts only apply when a cryptocurrency is traded against fiat USD on the crypto exchange.
The real issue: Binance.US users have been unable to deposit fresh USD into the platform since June 9 due to a suspension. This effectively means that the discounted cryptocurrencies can only be purchased with any USD already existing in the account before the suspensions.
The Ripple Effect: Fear of USD Withdrawal Suspension
Fear that Binance.US might soon stop USD withdrawals has prompted some users to trade their cryptocurrencies below market value to get out of their positions in USD. An email from Binance.US to its customers, widely shared on Twitter, suggests the last day for USD withdrawals will be July 20.
Echoes of Past Trouble: Binance’s Australian Dollar Dilemma
This isn’t the first time such a situation has arisen. In late May, Binance’s Australian branch faced a similar issue involving the Australian dollar when the company’s third-party payments provider discontinued fiat on- and off-ramps. The fallout was a 20% price fall for BTC on Binance when traded against the Australian dollar, compared to global spot prices.
In conclusion, while the crypto discounts on Binance.US may look tempting, the lack of USD deposit functionality may put off many potential investors, raising concerns over the future of the platform.