In the last 24 hours, Bitcoin trading volume on Binance has reached 9 billion USD when this exchange waives Bitcoin trading fees, leading to virtual trading volume.
In the BTC/USDT pair alone, the 24-hour trading volume has reached $9.1 billion, many times higher than the average of the past half-month, which fluctuated around $1-2 billion. Some people even pointed out that in 2 hours on the evening of July 8th, up to 3 billion USD of BTC was traded back and forth on Binance.
The cause of the above phenomenon was quickly identified, which is because Binance recently removed the transaction fee for 13 trading pairs between Bitcoin and fiat and stablecoins. This is a program applied by this exchange to celebrate the 5th birthday.
However, instead of stimulating actual trading demand, the removal of transaction fees has been taken advantage of by many users to improve their personal achievements, namely, to raise the VIP level on the exchange through block accumulation volume of transactions by the act of self-trading (wash trading). That is the general model that leads to the situation that the trading volume is a virtual number, not stemming from the actual buying demand of users in the context of the cryptocurrency market faltering, the price does not fluctuate much but the trading volume translation leaps.
CEO Changpeng Zhao was also quick to identify and acknowledge the problem.
Binance then announced that it was removing 13 free-to-trade Bitcoin trading pairs from the formulas for calculating user VIP levels and liquidity providers’ market maker program.
Since then, Bitcoin trading volume on Binance has decreased and stabilized around the old level.
Before the incident, CEO Sam Bankman-Fried of FTX exchange, who is said to be “war of words” with CEO Changpeng Zhao on the issue of market rescue, also gave his opinion.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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