Binance review 2022
Binance.US offers one of the best ways to invest in cryptocurrency at low cost. Binance – which we’ll use here to refer to the U.S. operation – offers some of the lowest fees in the crypto industry, so traders looking to minimize the sometimes outrageous costs at other brokers or exchanges may want to take a close look here. While the fees are low, clients might be paying for it with minimal customer assistance. Still, the exchange should prove valuable for a wide range of crypto traders, especially those who want to go deeper into the space than just the top few names. Just don’t get this U.S.-based exchange confused with its parent company Binance, which operates outside the country.
Traders looking for an even wider selection of cryptocurrencies should have a look at Coinbase or even Binance’s global parent if they can access it. And those who would rather 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
|Minimum balance:||None, but $10 trade minimum|
|Securities tradable:||67 cryptocurrencies|
|Cost per trade:||
|Customer service:||No phone service, only self-help and support tickets|
|Mobile app:||The Binance mobile app is available on the Apple App Store and Google Play Store|
Pros: Where Binance stands out
Commissions and fees
Binance really stands out when it comes to its commission structure. Fees generally start low, and then only move lower. Binance uses a volume-based pricing model, and even gives you further discounts if you use its proprietary cryptocurrency to buy and sell. That said, if you’re used to the simple world of most brokerage pricing, you’ll need to bid goodbye to those dreams here.
In general, you’ll pay a 0.1 percent fee for trading. But the exchange’s volume-based pricing model can reduce your costs, and it’s based on your 30-day trading volume. Binance has 11 pricing levels, which it enumerates as VIP 0 to 10, depending on your 30-day volume. In addition, Binance uses a maker-taker model that rewards those who add liquidity to the market (makers) and charges a bit more (at higher trade volumes) to those who reduce liquidity (takers).
Here are a few practical examples to see how it works:
- VIP 0 pricing: If you want to buy $10,000 of Bitcoin, you’ll pay 0.1 percent of your trade value, effectively $10. That’s the price whether you’re a maker or taker. If you own enough Binance Coin, a stablecoin pegged at $1, to pay the trading fee, Binance will reduce your fee by 25 percent. So you’ll pay just $7.50 to make the trade. Any fees will automatically be deducted from your Binance Coin balance first.
- VIP 1 pricing: Once you’ve placed trades for more than $50,000 in the prior 30 days and have a Binance Coin balance of at least 50, you’ll be assigned to VIP 1 pricing. At this level, you’ll pay 0.09 percent, whether you’re a maker or a taker. So with a trade of $60,000, for instance, you’d incur a fee of $54. But Binance will cut that fee further by 25 percent if you’re paying with its own stablecoin. So that net fee comes out to $40.50.
- VIP 2 pricing: Here’s where pricing begins to diverge. Once you’ve traded at least $100,000 in the prior 30 days and have a Binance Coin balance of at least 100, you’re assigned to VIP 2 pricing. At this level, a maker pays 0.08 percent on any trades, while a taker pays 0.09 percent. That same $60,000 trade would cost $48 now as a maker, or $54 as a taker. But if Binance takes your fees from your Binance Coin balance, you’ll still get a 25 percent discount, reducing those fees to $36 and $40.50, respectively.
The fees move lower from there. They hit zero for makers with volume of more than $10 million in the last 30 days (at VIP 6). While the fees for takers continue to decline, they never reach zero, and bottom out at 0.02 percent at VIP 10, though you can still get that Binance Coin deduction.
Confusing pricing structure? You bet!
But there are some other fees that traders should be aware of. Binance also offers a way to instantly purchase crypto, but the fees are at least 5 times as much as those above, 0.5 percent. So if you’re looking to buy crypto straight from a debit card and want to do it right now, rather than waiting for money to transfer to your Binance account, you can make it happen. Binance charges a 4.5 percent fee on those dollars, whereas bank transfers are free.
It’s worth noting that Binance’s pricing, while a bit complex, is transparently posted on its website, unlike one (rather costly) part of Coinbase’s even more complex pricing schedule. Maybe that has a lot to do with Binance’s cheaper commission structure.
Binance might not offer the largest selection of cryptocurrencies, but it offers much more than the general financial apps such as Robinhood and Webull that have been encroaching into the crypto space. With a total of 67 cryptocurrencies available on its platform, you’re going to find the most popular names, including Bitcoin, Ethereum, Binance Coin, Solana and more. And you’ll find dozens of other altcoins, too, plenty of others that you’re likely not familiar with.
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 – generally the broker with the widest selection of available traditional securities – recently launched trading in four cryptos. Many typical online brokers don’t offer any direct access to cryptocurrency trading.
Specialized crypto exchange Coinbase does offer more than 100 coins on its platform, but this buffet-style offering is only better if you need something not offered on Binance. And it’s worth noting that crypto is the extent of securities offered at Binance. If you want stocks, bonds, funds or something more, you’ll have to turn your sights to a traditional broker or financial app.
Binance allows clients to trade directly from one cryptocurrency to another. So you won’t have to cash out of one coin (or into another stablecoin) and then move into the new currency. Instead, you can swap straight from the coin you’re selling to the coin you actually want. Not only is it just more efficient in terms of making transactions, it helps you avoid unnecessary trading fees, too.
Cross-trading is not available on all cryptocurrency pairs, but Bitcoin (the most popular cryptocurrency) can be swapped directly with 10 other coins.
Like Coinbase, Binance offers customers the ability to earn staking rewards for holding coins with the firm. Staking is something like earning interest in a bank account but with different and greater risks. Staking generates income on certain crypto when it’s used to validate transactions in the currency. Binance shares all staking rewards with you and doesn’t charge for the program.
Customers can earn staking rewards on a handful of cryptocurrencies, seven as of the last count. Rewards accrue daily, but distributions only occur monthly.
Cons: Where Binance could improve
Fees for instant buy
At 0.1 percent, Binance’s spot trading fees are low, but you’ll want to be sure to take advantage of them and not use the instant buy/sell feature at the much higher price point of 0.5 percent. Still, even that fee is high relative only to Binance itself and remains reasonable compared to some of the trading fees in the crypto world, eToro being a notable instance of high fees.
And while we’re on the subject of high transaction fees, it’s important to re-emphasize the high fee for using a debit card, at 4.5 percent. That’s even higher than the 3.99 percent charged at Coinbase. The easy solution: Transfer cash and wait for it to clear into 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 that it intends to eventually operate in all 50 states, it’s added just a few of them from September 2020 to December 2021, meaning full coverage may yet be a ways off.
Maybe Binance’s low fees are a bit too low? That’s because clients can contact customer support only through a support ticket (email). No phone. No chat. You’ll have to explain the issue clearly in writing, when sometimes the issue is anything but clear.
Your only recourse is a self-help section on the website, which may or may not prove useful.
It’s worth mentioning that Binance has come under scrutiny from U.S. federal investigators, according to Bloomberg. That’s the parent company Binance, which owns Binance.US. Regulators are reportedly investigating a broad range of compliance issues at the company.
It may (or may not) mean little to the American arm of the company, but the one-time CEO of Binance.US resigned in mid-2021 after just a few months on the job.
Binance does quite a few things right for traders who really want to focus on crypto:
- A wide selection of popular cryptocurrencies should attract all but the most in-the-weeds crypto enthusiasts.
- Low trading fees and volume discounts should draw more active traders, especially when fees elsewhere tend to be substantially higher.
- Newer investors who need customer support may find a better fit elsewhere, especially if they intend to trade other securities or trade crypto as a sideline.
More active investors should also have a look at Coinbase Pro and Kraken, two other popular crypto-focused players that can offer attractive pricing. But if you want the basic crypto choices along with stocks, options and more, consider Robinhood and Webull while comparing notes on tastyworks and TradeStation, too.
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