When Binance bans Americans - Will the low liquidity cause flash crashes?

[thegoatiest]

Hey,
I trade solely at Binance.
It's a real PITA them banning the USA as most of the volume for Altcoins comes from the USA.

So - my concern is that there will be major flash crashes in about 6 weeks time, due to the low-liquidity.
Also, any word on where all the Americans will go after Binance?
Haven't heard of a concrete replacement to fill the gap yet.

TG

[mk4]

So - my concern is that there will be major flash crashes in about 6 weeks time, due to the low-liquidity.

Can you expound why you think there will be a flash crash due to low liquidity? If anything, I think we will see a slight rise, as people would probably be exchanging all their coins for BTC to be able to withdraw them easily.

Also, any word on where all the Americans will go after Binance?
Haven't heard of a concrete replacement to fill the gap yet.

There will be US-only version of Binance, just like there is a binance site specifically for Jersey-ers.

[Bttzed03]

The Binance US will have less cryptocurrencies to trade compared to the main Binance and that may cause a decrease in volume in altcoins. I don't know if the decrease will be considered as a flash crash. We will have to wait and see.

[gentlemand]

Is it not likely that the US version of Binance will share the same order books? The reason it exists is to keep Americans on board. That relates to the portal they're permitted to enter, not where they end up. It would be pretty strange to have US only trading pairs.

There may well be coins they're not allowed anywhere near because they're potential securities and that's what you'll need to keep an eye on. I presume for the other stuff it'll be business as usual with a different login page.

[The Sceptical Chymist]

There will be US-only version of Binance, just like there is a binance site specifically for Jersey-ers.

That's what I've heard as well, though I'm wondering when they're going to roll it out.  In any case, Binance is the only exchange I really care to use, so I'm sure I'll be happy with whatever they do as long as there's a decent selection of coins.

It would be pretty strange to have US only trading pairs.

There may well be coins they're not allowed anywhere near because they're potential securities

It would be strange, but I'm not aware of what the US considers as securities as opposed to whatever they consider bitcoin.  Can't say I'm up to speed on the law regarding such things.

[Thermytee]

The fact that some regulations have restricted US participation in altcoin doesn't mean the price will crash or dump. Definitely, trades in USA have a way of trading same with those in China sinits not a big deal nor a major cause of low price of altcoins

[carlfebz2]

Hey,
I trade solely at Binance.
It's a real PITA them banning the USA as most of the volume for Altcoins comes from the USA.

So - my concern is that there will be major flash crashes in about 6 weeks time, due to the low-liquidity.
Also, any word on where all the Americans will go after Binance?
Haven't heard of a concrete replacement to fill the gap yet.

TG

I don't know why we would consider on having flash crashes due to low liquidity.I don't also believe that most altcoin comes from USA yet theres no such tracking that it is indeed mostly came from americans.As i read up theres  a US-version of binance and it seem they don't really like for their users to leak out and finding some competitor alternative.US law are way too strict which i do read out prohibitions almost in all aspects. lol

[stfN2128]

i dont think that the market will crash or something else. when the us get banned it doesnt mean they are going to stop trading, they can still trade on other platforms. i dont expect a big impact at all on the longterm.

[DebitMe]

There will probably be some market losses due to the news, but it will come when binance actually shuts down to US customers, but as others have said, there will be a sep US site, which will wash out any losses in a week or two.

[pixie85]

Excluding US customers won't make those bitcoins disappear from the market. They will still be able to trade on other exchanges.
It will lower the volume but it shouldn't affect liquidity because as you know there are much smaller exchanges than binance that don't have liquidity problems.

If they open another platform for US customers it should be all the same even if they keep them separated. Orders work both ways. US customers are not only buying or only selling.

[DanWork]

Will the US version of Binance require KYC? I think that will lower the volume for Binance.

[gentlemand]

Will the US version of Binance require KYC? I think that will lower the volume for Binance.

Almost certainly. The only reason they'll be opening it is to be able to continue serving Americans and everywhere else is going full KYC. Since there are pretty much no KYC free alternatives I don't think it'll make all the much difference in numbers. You either cough up your details or stop using exchanges.

[ralle14]

I expect normal fluctuations to continue once Binance closes their doors to traders in the US. It's only one exchange and there's still some big exchanges that have altcoins. It's not like Binance holds most of the trading volume and could cause some unexpected price drops.

[rodel caling]

The Binance US will have less cryptocurrencies to trade compared to the main Binance and that may cause a decrease in volume in altcoins. I don't know if the decrease will be considered as a flash crash. We will have to wait and see.

I'm not a binance user but according to your explanation it a separately exchange between the binance american use and the main binance exchange. I think have an a little bit effect but is very minimal not to cause of crash.

[mk4]

There will be US-only version of Binance, just like there is a binance site specifically for Jersey-ers.

That's what I've heard as well, though I'm wondering when they're going to roll it out.  In any case, Binance is the only exchange I really care to use, so I'm sure I'll be happy with whatever they do as long as there's a decent selection of coins.

It's confirmed if I remember correctly, and as far as I know this should be the URL: https://www.binance.us/

Shame that the Americans are now limited to just a few coins to trade.

[Pursuer]

as most of the volume for Altcoins comes from the USA.

there is absolutely no way you could possibly know that unless you work in Binance and have access to their KYC submitted documents!
and they are not banning US users, they are only forcing them to use their other website which all of these different platforms all link to the same database with the same liquidity more or less.

So - my concern is that there will be major flash crashes in about 6 weeks time, due to the low-liquidity.

it might happen but I'd say there are much bigger concerns when you are in the altcoin market and the risks of altcoins getting dumped for literary any other reason and also the sizes of those dumps is a lot higher than this risk and they are getting dumped and see flash crashes every day anyways so it wouldn't even be a new thing!

[hugeblack]

Do you mean flash crashes in BTC price? I do not think so because China has made a similar ban and there has been no real crash, just a normal correction.
With regard to altcoins, with binance or none of it, most of these shitcoins will die over the coming years. Binance and other exchange platforms are who kept these coins alive but with a few currencies, we will survive with more regulation rules.
If you have a lot of altcoins, get rid of them.

[exstasie]

Can you expound why you think there will be a flash crash due to low liquidity? If anything, I think we will see a slight rise, as people would probably be exchanging all their coins for BTC to be able to withdraw them easily.

He's talking about future volatility on Binance listed markets, not BTCUSD speculation. He's predicting a big loss of liquidity (thin order books) when Americans pull their coins off the exchange. Thin order books can definitely increase the likelihood of flash crashes (or flash wicks to the upside too).

Personally, I think many Americans will remain on Binance. The 3-month delay allows market makers to structure themselves as non US persons for the purposes of Binance's terms. And most of the small fish will trade through VPN. I think the loss of liquidity will be smaller than the OP fears.

Binance US will probably be a ghost town like Binance Jersey.

[Pipdips]

Binance never tells it's clients about what is happening with their exchange. It's always: Surprise! New Website! or Surprise! We just banned all users in the Free World! Even when the Binance exchange was hacked there was no email notification. Just: Surprise! All your money was stolen.

[FrozenBit]

Hey,
I trade solely at Binance.
It's a real PITA them banning the USA as most of the volume for Altcoins comes from the USA.

So - my concern is that there will be major flash crashes in about 6 weeks time, due to the low-liquidity.
Also, any word on where all the Americans will go after Binance?
Haven't heard of a concrete replacement to fill the gap yet.

TG

I think Americans are the ones who need Binance best. The majority of very few Americans trade alts. they just wait for the IEO event to buy tokens and sell them on Binance and now it's a strategy that is making a big profit from them.
I think CZ only makes a statement to get the government more favored in doing business (pay less taxes). In addition, Americans can still use VPN to exchange IPs through other Asian countries for easy transactions.