Phemex to Launch First Ever Zero-Fee Trading Option as Crypto Market Heats up Ups

Traders of digital assets such as BTC and ETH have been thrown a bone by one of Asia’s leading exchanges. Singapore-based Phemex has rolled out zero-fee trading on its spot exchange. The move, which is accessible for a sub-$10 monthly fee, gives retail customers access to the sort of fees that are normally the preserve of high volume traders. Phemex’s new product has been interpreted as a direct assault on the market share of crypto exchange Binance.

Phemex Throws a Curveball

The history books will associate May 11, 2020 with the date of Bitcoin’s third halving: the pre-programmed event that sees Bitcoin’s block reward cut in half, reducing the subsidy assigned to miners. In time, however, it may also come to be seen as the day when main street traders secured another leap towards gaining parity with their institutional counterparts.

Just as apps such as Robinhood have made stocks accessible to millions of millennials, crypto exchanges have brought Wall Street tools to the once rough-and-tumble world of cryptocurrency. Leveraged trading, with the ability to open bitcoin options contracts worth as much as 100x the value of the asset pledged, have become normalized on derivatives exchanges, including Phemex. It is not the exchange’s derivatives arm that has been the setting for the latest retail innovation, however, but its spot market. There, traders can now swap four digital assets against USDT with zero fees from May 15.

From Wall Street to Bitcoin City

Phemex’s decision to roll out zero-fee spot trading can be attributed to two overriding factors: a desire to steal the limelight from exchange giants like Binance and Huobi, coupled with the provenance of the team behind Phemex. Its founders are former Morgan Stanley executives, and since launching a spot and futures crypto exchange they have ported over much of their Wall Street know-how. CEO Jack Tao works alongside Trading System Architect Yang Du, both previously of Morgan Stanley. Despite being registered in the British Virgin Islands, the exchange operates remotely out of China, Korea, Japan, the US, and Singapore, deploying a team of 35.

Phemex claims to be the fastest bitcoin derivatives exchange on the market, deploying the sort of latency-minimizing techniques that are a favorite with HFT proponents. The roll-out of zero-fee trading has now beefed up Phemex’s spot market, and given traders on other exchanges cause to reappraise the emerging platform. With daily volume approaching $400 million, Phemex is rapidly gaining ground on the market leaders. If its introduction of Premium membership, by which the zero-fee option is provisioned, proves a success, expect to see Phemex’s on-demand offering to be adopted by rival platforms as a user acquisition strategy.