Leading cryptocurrency exchange Binance has recently revealed that it will no longer service U.S. users on its Binance.com platform, and is moving them to a U.S.-only version created in a partnership with BAM Trading Services. This, an analyst warns, may have triggered an ‘altcoin winter’.
According to analyst Alex Krüger, the 'altcoin winter' could happen because the leading cryptocurrency exchange is going to have to boot U.S. residents from its core platform, accessible through Binance.com over regulatory restrictions.
These same restrictions will force Binance’s U.S.-only platform to have a relatively small number of cryptoassets, compared to its core platform. Traffic from the U.S. is believed to make up 25% to 30% of Binance’s total traffic significantly affecting liquidity.
This, in turn, could see the cryptocurrencies that aren’t going to be listed on Binance’s new U.S. platform suffer corrections as traders start selling to avoid getting stuck with funds they aren’t able to get to.
If Krüger is correct, traders will sell their altcoins, and even Binance’s native BNB token, for bitcoin or ether to maintain exposure to the cryptocurrency ecosystem. The price of BNB has, in fact, dropped sharply after news of Binance’s move started circulating.
If you hold "small caps" in Binance, and are concerned about the news, maybe because you are a US resident who fears getting funds stuck without KYC, or maybe because you think ahead, yet want crypto exposure, what do you do?— Alex Krüger (@krugermacro) June 14, 2019
Sell everything, buy $BTC (or $ETH), exit Binance. pic.twitter.com/LOohWw5Nvu
Moreover, while some maintain the Binance Coin itself is a utility token, others believe the U.S. Securities and Exchange Commission (SEC) will classify it as a security, meaning the cryptocurrency exchange’s U.S. platform could be barred from listing BNB on it.
Users in the U.S. could still buy the cryptocurrency, which recently hit the $34 mark after a margin trading rollout was teased, as while even Binance’s decentralized exchange (DEX) is set to block users from the country, the blockchain itself is still accessible, meaning users can trade on the DEX through wallets that support it or through a VPN.
Krüger added that even if the BNB token isn’t listed on Binance’s U.S. platform, its long-term prospects remain strong. At press time, BNB is trading at about $32.6, after falling from a $36 high seen earlier this week. A recent dip nearly eased all of its gains in the last two weeks.
Bitcoin, on the other hand, has seen its price rise by 4.6% to $8,680 in the last 24-hour period, presumably thanks to traders selling altcoins and BNB for the flagship cryptocurrency in anticipation of U.S. users being booted from Binance.