An intriguing discovery by watchful crypto enthusiasts shook the US crypto market.
Recently, crypto enthusiasts spotted an ever-growing gap in the prices between global spot and cryptocurrencies listed on Binance.US, coining the phenomenon as a “depeg” of digital currencies.
For example, on July 9th, Bitcoin (BTC) retailed for $27,536 against the US dollar on Binance.US, marking an 8.5% drop from its global spot price of $30,106.
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Similar price disparities were observed among other digital currencies on the platform. Ethereum (ETH), the second most dominant cryptocurrency, carried a price tag of $1,695, approximately $200 lower than the global average.
Some stablecoins, like Tether (USDT), also traded below their dollar pegs, with the cryptocurrency going for $0.915.
The potential for buying these tokens seems enticing due to these crypto markdowns. However, the reality is starkly different, as the unique circumstances restrict most investors from exploiting these discounts. The lowered prices apply only when a cryptocurrency is purchased with fiat USD on the platform.
The real obstacle arises from Binance.US's halt on new USD deposits on June 9th. Consequently, potential arbitrageurs could only purchase these discounted cryptocurrencies with USD already held in their accounts before the suspension.
Adding to the unease, there are fears that Binance.US might suspend USD withdrawals soon. In response, some users have resorted to trading their cryptocurrencies below market value to cash out their positions in USD.
According to the email circulating on Twitter, July 20th will be the last day when Binance.US customers will be able to make USD withdrawals.
In a somewhat parallel situation, Binance's Australian subsidiary faced similar issues relating to the Australian dollar back in May. A third-party payments provider's cessation of fiat on and off ramps led to the Bitcoin price on Binance dropping 20% against the Australian dollar compared to global spot prices.
While Binance.US users face tantalizing opportunities, limitations, and looming uncertainties make these Bitcoin discounts less enticing than they initially appear.
