The BTC-U.S. dollar trading pair on Binance.US jumped as high as $28,800 earlier on Wednesday morning, some $1,700 higher than the average price across other exchanges at that time, data shows. Recently, the BTC-USD pair was changing hands at $27,900, while the CoinDesk Bitcoin Price Index (XBX), which feeds from prices on multiple exchanges, stood at around $26,400. The difference represents an almost 6% price premium on Binance.US.
The unusually high price premium is a sign of deteriorating liquidity on the platform as traders are retreating in anticipation of a potential asset freeze, according to Clara Medalie, research director of digital asset data firm Kaiko.
“Market makers are wary ahead of this double blow to Binance's U.S. entity, and are removing liquidity from the exchange's order books in anticipation of a possible freeze,” Medalie said in a note. “No trader wants to get caught with their assets stuck on an exchange.”
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