Buy Crypto
Pay with
Markets
NFT
New
Downloads
English
USD

Zero Fees and High Liquidity Make Binance the Home of BTC Trading

2022-08-12

Main Takeaways

  • Binance is one of the most cost-effective venues for BTC trading.

  • Compared to other major global exchanges, Binance’s BTC/USDT pair has greater order book depth, which lowers slippage and improves cost efficiencies when trading.

  • Binance’s exchange platform boasts some of the market's lowest slippage rates and narrowest bid-ask spreads.

Trading fees aren’t the only costs when using an exchange, and users must be aware of the hidden costs arising from poor liquidity on order books. As we’ll demonstrate, Binance provides good market depth, low slippage rates, narrow bid-ask spreads, and a competitive fee structure to give users cost-efficient trading. 

As you might have heard, Binance removed maker and taker fees for thirteen stablecoin and fiat BTC spot pairs. This means that Binance is now one of the most cost-effective platforms for trading these specific pairs. But what exactly do we mean by maker and taker fees? 

A maker is someone who adds liquidity to an exchange by placing orders that can be matched only at a certain price. A taker removes liquidity from the order book by matching outstanding orders. Typically, both of these parties pay fees to an exchange. However, Binance has removed these fees from the selected trading pairs.

How has the removal of these fees affected your trading experience?

Apart from saving our users’ money, the fee removal has had other beneficial effects on the exchange’s order book. This includes allowing users to trade at more favorable prices. Our selection of liquidity indicators below for the 13 pairs demonstrates that there have been significant improvements across the board that positively impacted your trading costs.

Industry-Leading Market Depth

First, let’s look at the BTC/USDT spot pair. Since removing maker and taker fees, this particular pair has had the best 2% market depth compared to a basket of other leading exchanges. The benefit of greater market depth is that it allows users to execute large market orders without causing significant price spikes and volatility.

The 2% market depth simply measures the volume of bids and asks at a price level within a 2% band on either side of the mid price. When this measure increases, the exchange has deeper liquidity as there is more volume on the order book to match with takers around the mid price level.

Among all 13 BTC pairs, the average 2% market depth has improved by 35%* since removing maker and taker fees. This increase ultimately benefits users who can fill their market orders with less risk of price slippage.

*Comparing the daily average in the two weeks before the removal and in the 20 days after the removal, based on publicly available data.

Lower Slippage

When trading on an exchange, you might sometimes find that a market order you had placed settles for a different price than you expected. This is called slippage, and it’s something users want to avoid. You’ll commonly see slippage in highly volatile markets or ones with low liquidity. So even though you may get a better price than expected, there’s a chance you might get a worse one too.

Imagine you want to place a market buy order of 100 units of the hypothetical crypto XYZ at the current market price of $100. However, there are only 50 units of XYZ available for $100. The next available ask price that can fill the rest of your order is $110, meaning you’d pay for 50 units at $100 and 50 units at $110. Your average price would be $105, giving you $5 of slippage.

Slippage tends to be lower when there is a high volume of orders, greater market depth, and a lower bid-ask spread. As already mentioned, the removal of maker and taker fees resulted in improvements in all these areas. This led to Binance’s slippage rate being significantly lower than “Exchange X”, which represents a simple average of seven other large exchanges compiled using publicly available data.

BTC/USDT Slippage (07/09 - 07/28)

Binance

Exchange X Average*

Approx. 0.03%

Approx. 0.23%

*Based on publicly available data observed from 9th July 2022 to 28th July 2022.

Let’s dive deeper into the numbers with a practical example showing the impact of the fee removal and lower slippage. Imagine that the current price of BTC/USDT is 10,000, and the slippage rates are the same as in the table above. You have 1 BTC and want to sell it immediately at the current market price. Below you can see the difference between selling your 1 BTC on Binance and Exchange X.

Binance

Exchange X

Market Price

10,000 USDT

10,000 USDT

Slippage

Approx. 0.03%

Approx. 0.23%

Actual Amount Received After Sale

9,997 USDT

9,977 USDT

Trading Fee

0%

0.1%* 

Total Cost**: 

(Slippage Cost + Taker Fee)

3 USDT + 0%

 = 3 USDT

23 USDT + 0.1%*

= 33 USDT

*Hypothetical trading fee, not based on observed real-world data.
**Illustrative example only. The actual trading cost may vary.

Narrow Bid-Ask Spreads*

*Based on publicly available data observed from 9th July 2022 to 28th July 2022.

Another benefit of the order books’ fee removal can be seen in the size of bid-ask spreads. This metric describes the difference between the lowest asking and highest bid prices on the books. The spread is, therefore, also a transaction cost. The better the market’s liquidity, the smaller it is. 

Let’s take a look at the BTC/USDT pair again. To calculate the bid-ask spread, we can use a simple formula:

Bid-Ask Spread = Lowest Ask Price - Highest Bid Price

Let’s compare Binance’s bid-ask spread on this trading pair to a simple average bid-ask spread of 7 other large exchanges we’ll again denote as “Exchange X”. We’ll imagine you own 1 BTC you want to sell immediately. You can see in the chart below the approximate difference between doing this on Binance and Exchange X.

Binance BTC/USDT 

Exchange X BTC/USDT 

Trading Fee

0%

Buy + Sell Orders’ Trading Fee

Total Cost*: (Bid-ask Spread + Trading Fee)

1.46 USDT

7.14 USDT + Buy + Sell Orders’ Trading Fee

*Illustrative example only. The actual trading cost may vary.

Our BTC Fees Removal Creates an Improved Trading Experience

It is now visible that there are a lot more benefits to removing fees on BTC pairs than it may seem at first glance. Industry-leading depth, liquidity, and slippage rates all combine to create an experience most other exchanges can’t compete with. When it comes to BTC trading, Binance is proud to call itself one of the best exchanges to trade efficiently. So, why not take a look for yourself? 

For more information on our fees and liquidity in general, refer to the following articles:

Risk Warning: Digital asset prices are subject to high market risk and price volatility. The value of your investment can go down or up, and you may not get back the amount invested. You are solely responsible for your investment decisions, and Binance is not liable for any losses you may incur. Past performance is not a reliable predictor of future performance. You should only invest in products you are familiar with and where you understand the risks. You should carefully consider your investment experience, financial situation, investment objectives, and risk tolerance and consult an independent financial adviser prior to making any investment. This material should not be construed as financial advice. For more information, see our Terms of Use and Risk Warning.