Bitcoin and Ethereum are currently trading at lower prices on Binance.US compared to other global spot markets, presenting an attractive opportunity for market participants. Bitcoin, priced at nearly $27,500, is approximately $2,500 lower on Binance.US, while Ethereum is trading at $1,700, offering a $200 discount. This significant difference in prices has led crypto users to take to Twitter, terming it a “depeg” situation, indicating a notable deviation from global spot prices.
Challenges in Leveraging the Disparity
Although the discounted cryptocurrencies on Binance.US may seem appealing, taking advantage of the price difference is not easy for all users. The discounted crypto assets can only be purchased using USD holdings, and unfortunately, Binance.US has suspended USD deposits into the platform since June 9. As a result, only users who already have USD on the exchange can seize this arbitrage opportunity.
Previous Instances of Price Anomalies on Binance Platforms
This is not the first time a price anomaly has been observed on a Binance platform. In late May, the Australian branch of the crypto giant experienced a significant decline in Bitcoin’s price compared to global spot prices. The decline occurred after the termination of fiat on- and off-ramps by the company’s third-party payments provider. As a result, Bitcoin’s price on Binance’s Australian platform dropped by 20% against the AUD relative to global prices.
The world’s largest stablecoin, USDT, also traded below $1 on the exchange, further fueling fear, uncertainty, and doubt (FUD) within the community. Paolo Ardoino, the Chief Technology Officer of the stablecoin issuer, attempted to address these concerns by explaining that the lack of market makers willing to arbitrage could be the reason behind the price disparity. Additionally, Binance.US is currently facing legal challenges, which may impact the availability of arbitrage opportunities.
Ardoino highlighted the role of Tether in the primary market and emphasized that market-making professionals and arbitrageurs are responsible for the secondary markets, which include crypto exchanges. He drew attention to the fact that while BTC/USD trades at $27,600 on Binance.US (compared to $30,100 on other exchanges), it does not mean that Bitcoin is worth less globally. Ardoino encouraged users to calculate the spread for BTC/USD and USDt/USD to understand the percentage difference.
The price disparity of Bitcoin and Ethereum on Binance.US has sparked speculation about a potential depeg from global spot prices. However, leveraging this opportunity is challenging for most users due to the suspension of USD deposits on the platform. It is crucial to consider previous instances of price anomalies on Binance platforms, such as the decline in Bitcoin’s price on the Australian branch. The involvement of market makers, legal challenges, and the responsibility of Tether in the primary market further contribute to the complexity of the situation.