Binance 2021 Review | The bank rate
Binance.US offers some of the lowest fees in the crypto industry, so traders looking to minimize the sometimes outrageous costs of other brokers or exchanges may want to take a look. The exchange should prove to be valuable for a wide range of crypto traders, especially those who want to go deeper into the space than the top few names. Although the fees are low, customers can afford them with minimal customer support. Don’t confuse this US-based exchange with its parent company Binance, which operates outside the country. Overall, Binance – which we’ll use here to refer to the US operation – offers an attractive way to get involved in cryptocurrency.
Traders looking for an even wider selection of cryptocurrencies should take a look at Coinbase or even Binance’s global parent company if they can access it. And those who prefer to trade only a handful of the most popular cryptocurrencies as well as other securities should check out Robinhood.
- Crypto-only traders
- Active traders
- Crypto-to-crypto trading
Binance at a glance
|The minimum balance:||None, but $ 10 minimum trade-in|
|Negotiable securities:||59 cryptocurrencies|
|Cost per transaction:||
|Customer service:||No phone service, only self-help and assistance tickets|
|Mobile app:||The Binance mobile app is available on the Apple App Store and the Google Play Store|
Pros: Where Binance Stands Out
Commissions and fees
Binance really stands out when it comes to its commission structure. The fees usually start out low and then keep going down. Binance uses a volume-based pricing model and even gives you additional discounts if you use its proprietary cryptocurrency. Having said that, if you are used to the simple world of most brokerage pricing, you will have to say goodbye to those dreams here.
Typically you will pay a 0.1% fee for trading. But the trading volume-based pricing model can lower your costs, and it is based on your 30-day trading volume. Binance has 11 pricing tiers, which it lists as VIP 0-10, based on your 30-day volume. Additionally, Binance uses a maker-taker model that rewards those who add liquidity to the market (makers) and charges a little more (at higher transaction volumes) to those who reduce liquidity (takers).
Here are some practical examples to see how it works:
- VIP 0 rates: If you want to buy $ 10,000 worth of Bitcoin, you’ll pay 0.1% of the value of your transaction, or $ 10. This is the price whether you are a manufacturer or a taker. If you have enough Binance Coin, a stablecoin set at $ 1, to pay the trading fees, Binance will reduce your fees by 25%. So you will only pay $ 7.50 to make the exchange. All fees will be automatically deducted from your Binance Coin balance first.
- VIP 1 rates: Once you have traded for more than $ 50,000 in the previous 30 days and have a Binance Coin balance of at least 50, you will be assigned VIP 1 pricing. At this level, you will pay 0 , 09%, whether you are a manufacturer or a taker. So with a transaction of $ 60,000, for example, you will have to pay a fee of $ 54. But Binance will still reduce this fee by 25% if you pay with its own stablecoin. These net costs therefore amount to $ 40.50.
- VIP 2 rates: This is where the prices start to diverge. Once you have traded at least $ 100,000 in the previous 30 days and have a Binance Coin balance of at least 100, you are assigned VIP 2 pricing. At this level, a manufacturer pays 0.08 % on all transactions, while a payee pays 0.09%. That same $ 60,000 transaction would cost $ 48 now as a manufacturer, or $ 54 as a payee. But if Binance takes your fees from your Binance Coin balance, you’ll still get a 25% discount, reducing that fee to $ 36 and $ 40.50, respectively.
The costs go down from there. They hit zero for manufacturers with a volume of over $ 10 million in the past 30 days (at VIP 6). As the fees for takers keep going down, they never hit zero and hit 0.02% at VIP 10, although you can still get that Binance Coin deduction.
Confusing pricing structure? You bet!
But there are other fees that traders should be aware of. Binance also offers a way to buy crypto instantly, but the fees are at least 5 times higher than those above, 0.5%. So if you are looking to buy crypto straight from a debit card and want to do it now, rather than waiting for the money to transfer to your Binance account, you can make it happen. Binance charges a 4.5% fee on these dollars, while wire transfers are free.
It should be noted that Binance’s pricing, while a bit complex, is published transparently on its website, unlike a (rather expensive) part of Coinbase’s even more complex pricing schedule. It may have a lot to do with Binance’s cheaper commission structure.
Selection of cryptocurrency
Binance may not offer the widest selection of cryptocurrencies, but it does offer a lot more than the more general financial apps like Robinhood and Webull that encroach on the crypto space. With a total of 59 cryptocurrencies available on its platform, you are going to find the most popular names including Bitcoin, Ethereum, Binance Coin, Solana, and more. And you will also find dozens of other altcoins, many more that you probably don’t know.
Other rival apps advertise crypto trading, but only offer a handful of the most popular coins. Robinhood offers trading in seven cryptocurrencies, while Interactive Brokers – typically the broker with the widest selection of traditional securities available – recently started trading in four cryptos. Many typical online brokers do not offer direct access to cryptocurrency trading.
Specialty crypto exchange Coinbase offers over 100 coins on its platform, but this buffet-style deal is only better if you need something that isn’t offered on Coinbase. And it should be noted that crypto is the breadth of securities offered at Binance. If you want stocks, bonds, funds, or something more, you’ll have to look to a traditional broker or financial app.
Crypto to crypto trading
Binance allows clients to trade directly from one cryptocurrency to another. So you won’t have to withdraw a coin (or another stable coin) and then switch to the new currency. Instead, you can go straight from the part you are selling to the part you actually want. Not only is it just more efficient in terms of transactions, but it also allows you to avoid unnecessary trading fees.
Cross-trading is not available on all cryptocurrency pairs, but Bitcoin (the most popular cryptocurrency) can be traded directly with nine other coins.
Like Coinbase, Binance offers customers the opportunity to earn wagering rewards for holding coins with the company. Staking is something like earning interest on a bank account, but with different and greater risks. Staking generates income on certain crypto when it is used to validate transactions in the currency. Binance shares all staking rewards with you and does not charge for the program.
Customers can earn staking rewards on a handful of cryptocurrencies, seven at last count. Rewards accumulate daily, but distributions are only made monthly.
Cons: where Binance could improve
Instant purchase fees
At 0.1%, Binance’s spot trading fee is low, but you need to make sure you take advantage of it and not use the instant buy / sell feature at the much higher price of 0.5%. Yet even these fees are high compared to Binance itself and still reasonable compared to some of the fees for trading in the crypto world, with eToro being a notable example of high fees.
And while we’re on the subject of high transaction fees, it’s important to again highlight the high fees for using a debit card, at 4.5%. This is even higher than the 3.99% charged to Coinbase. The simple solution: transfer money and wait for it to be credited to the account.
Not available in some states
Binance (technically Binance.US) is not available in some states, including Connecticut, Hawaii, Idaho, Louisiana, New York, Texas, and Vermont. While the company has said it intends to operate forward in all 50 states, it only added a few from September 2020 through October 2021, meaning full coverage may be possible. -be still far away.
Maybe Binance’s low fees are a bit too low? This is because customers can only contact customer support via a support ticket (email). No phone. No text message. You will need to explain the problem clearly in writing, when sometimes the problem is anything but clear.
Your only recourse is a self-help section on the website, which may or may not be of use.
It’s worth mentioning that Binance has come under intense scrutiny from U.S. federal investigators, according to Bloomberg. It is the parent company Binance, which owns Binance.US. Regulators are reportedly investigating how the company could help Americans evade taxes, launder money and cover up illegal transactions, among other potential problems.
It may (or may not) mean little to the US arm of the business, but the former Binance.US CEO stepped down in mid-2021 after just a few months on the job.
At the end of the line
Binance does quite a few things for traders who really want to focus on crypto:
- A wide selection of popular cryptocurrencies should appeal to all but the most inexperienced crypto enthusiasts.
- Low trading fees and volume discounts should attract more active traders, especially when fees elsewhere tend to be considerably higher.
- New investors who need customer support may find a better solution elsewhere, especially if they intend to trade other securities or trade cryptos on the sidelines.
More active investors should also take a look at Coinbase and Gemini, two other popular crypto-focused players who may offer attractive prices. But if you want the basic crypto choices along with stocks, options, and more, consider Robinhood and Webull while also comparing ratings on Tasty and TradeStation.
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