Bitcoin selling for $5K cheaper on Binance Australia as fiat ramp closes
Bitcoin is currently trading at a significant discount on the Australian branch of Binance, a global crypto exchange. A single Bitcoin can be purchased for the equivalent of $22,000 if paid in Australian dollars, marking a 21% discount. The problem is getting the funds to the platform.
Cause of the Discount: The Rush to Cash Out
The discount comes as traders scramble to liquidate their crypto holdings into Australian dollars. This rush is triggered by the impending closure of local bank withdrawals on June 1 at 5 pm local time.
Binance Australia announced on May 18 that it would suspend Australian dollar services following a decision by its third-party payments provider. The crypto exchange further warned its Australian clients that any remaining Australian dollars on the platform post-May 31 would automatically be converted into USDT.
Implication of the Suspension of Fiat Services
The suspension of fiat services has led to a rush among users to cash out, resulting in the heavy discount on BTC prices. As of the time of writing, one Bitcoin can be purchased for 33,750 Australian dollars, or about $21,987 – 21% less than the global spot rate.
However, capitalizing on the cheaper Bitcoin might prove challenging. The inability to deposit Australian dollars into the trading wallet, along with high premiums for converting other crypto assets into Australian dollars, might make purchasing the discounted Bitcoin difficult.
Regulatory Challenges and Future Prospects
Binance has faced recent regulatory challenges in Australia, with the Australian Securities and Investments Commission (ASIC) cancelling its derivatives license last month. It is also facing a massive investigation by the U.S. Commodities and Futures Trading Commission.
Despite these hurdles, Binance states it is actively seeking an alternate provider to continue offering Australian dollar deposits and withdrawals. Currently, transactions using credit or debit cards are still available at market rates.
Meanwhile, Aussie crypto broker Swyftx, which relies on Binance for liquidity, has reassured its clients that Binance’s decision will not affect its operations.
