The price disparity between Bitcoin (BTC) on major digital asset exchanges such as Binance and Coinbase, compared to Binance’s U.S. arm, has significantly widened in recent weeks. This development has raised concerns among cryptocurrency commentators on Twitter. At 09:26 UTC on Tuesday, the BTC/USD pair on Binance.US was trading at a nearly $650 premium compared to its counterpart on Coinbase and Binance’s BTC/USDT pair. This premium represents a substantial increase from the approximately $20 premium observed at the end of April, as shown by data from charting platform TradingView.
According to a pseudonymous Twitter-based analyst known as @fewseethis, the premium on Binance.US is likely a result of market makers exiting the exchange in anticipation of regulatory actions. Market makers are entities responsible for providing liquidity to the order book. In February, Binance.US came under scrutiny from the U.S. Securities and Exchange Commission (SEC) regarding its trading affiliates. In March, an agency official stated that Binance.US was operating an unregistered securities exchange in the U.S.
Key takeaways
- Bitcoin on Binance.US traded at a premium of nearly $650 against Coinbase and Binance's BTC/USDT pair, up from around $20 at the end of April.
- Analysts attributed the gap to market makers withdrawing from the exchange ahead of expected regulatory action, leaving the order book thin.
- Binance.US had been under SEC scrutiny since February over its trading affiliates, and in March an agency official said it was operating an unregistered securities exchange.
- Cryptowatch data showed the order book skewed heavily toward buy orders — abnormal for an exchange of that size, according to Blofin volatility trader Griffin Ardern.
- Tether also broke its peg on Binance.US, spiking to $1.30, with the cause unclear.
Data from Cryptowatch indicates that Binance.US’ order book currently favors buy orders, suggesting weak market depth and an exodus of market makers. Griffin Ardern, a volatility trader from crypto asset management firm Blofin, stated that an imbalanced order book with significantly more buy orders than sell orders is abnormal for a large exchange like Binance.US. He attributed this phenomenon to the departure of prime market makers, likely due to regulatory pressure and increased compliance requirements.
In addition, on Monday, Tether (USDT), the world’s largest stablecoin, experienced a surge to $1.3 on Binance.US, deviating from its intended peg to the U.S. dollar. This premium in Tether’s price remains even early Tuesday. The reason behind Tether’s appreciation is unclear. Some members of the crypto community have suggested that the surge in USDT/USD might be responsible for the BTC/USD pair on Binance.US trading at a premium compared to Tether-denominated pairs.
However, others, including popular pseudonymous trader Byzantine General and market maker Alice from crypto exchange OPNX, believe that the premium indicates issues with fiat withdrawals at the exchange. CoinDesk reached out to Binance.US for clarification but had not received a response at the time of writing.Byzantine General tweeted, “This USDT premium should be irrelevant if FIAT withdrawals work properly,” questioning why individuals couldn’t simply withdraw funds from Binance.US. Alice echoed a similar sentiment, suggesting that there might be a hidden USD fee or problems with USD withdrawals at a certain threshold.
Frequently asked questions
Why does a market maker leaving cause a price premium?
Market makers supply the resting buy and sell orders that keep an exchange's price aligned with the wider market. When they withdraw, the order book thins out and prices on that venue can drift away from everywhere else.
What did traders think the premium actually signalled?
Opinion split. Some linked it to the Tether spike; others, including Byzantine General and market maker Alice from OPNX, read it as evidence of problems with fiat withdrawals — arguing the premium should not persist if dollars could leave the exchange freely.
Did Binance.US explain the discrepancy?
No. CoinDesk approached Binance.US for clarification and had not received a response at the time of publication.
