NewsletterJust-In: Binance Making These Efforts To Increase Bitcoin and Ethereum Liquidity
Crypto exchange Binance making several efforts to increase liquidity in the crypto market. Low liquidity appears to be having a negative impact on Bitcoin and Ethereum prices, with BTC price briefly falling to the key 200-WMA.
Binance on Friday announces that it will launch additional BTCUSDT and ETHUSDT daily options from May 15. It will help bring some liquidity by increasing Bitcoin and Ethereum trading, especially against USDT pairs.
Binance Launch BTCUSDT and ETHUSDT Daily Options
According to an official announcement on May 12, Binance revealed that it plans to launch additional BTCUSDT and ETHUSDT daily options in the Binance Option product. Users will be able to trade options daily on the exchange from May 15 08:00 UTC onwards.
These daily options will be European-style options contracts. It will be T+3 BTCUSDT and ETHUSDT daily options, which will be listed every day. However, Binance will not list T+3 BTCUSDT and ETHUSDT daily options if it coincides with BTCUSDT and ETHUSDT weekly, monthly, or quarterly options contract expiry day.
BTCUSDT and ETHUSDT daily options will have a trading duration of three days and expire at 08:00 UTC. This effort will increase liquidity in the market due to a rise in trading.
On Thursday, Binance announced two other efforts to increase liquidity. Users who add liquidity to the WBTC/BTC and WBTC/ETH liquidity pools will receive WBTC Combo Rewards in addition to BNB Rewards and Pool Rewards. The activity is only available from May 11 to June 10.
Moreover, Binance will update the tick size (the minimum change in the unit price) for some spot trading pairs from May 18. This will further increase market liquidity and improve the trading experience.
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Binance Losing Market Share
Leading market makers including Jump Crypto and Jane Street exiting the U.S. and regulatory crackdown in the US has caused liquidity issues for exchanges such as Binance and Coinbase.
In fact, Bloomberg reported that Binance’s spot-trading volumes share fell to 51% in May from 73% in March. While the market shares of Huobi, OKX, and South Korean exchanges have increased. US regulatory crackdown led to users worrying about the safety of their funds, causing them to diversify into other centralized exchanges.
In fact, Coinbase and Binance are witnessing less liquidity as compared to earlier quarters.
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