inance— the world's largest cryptocurrency exchange by trading volume — announced that it was launching a pre-market trading service. This would enable users to trade real tokens before their official market listing– a feature that makes Binance stand out among other exchanges, which largely offer derivative trading. This service is intended to make early investment opportunities in promising projects possible for traders.
How Pre-Market Trading Works
The Binance Pre-Market service works in collaboration with Binance Spot and Binance Launchpool, where selected tokens from the latter will be listed for trading in the pre-market phase. From that moment on, they can start trading those tokens from the announcement date, though they do have a few restrictions; they cannot withdraw or deposit them until they get fully listed.
A spokesperson at Binance explained that this makes Binance one step ahead of others in the market, as it is competing-for example, Bybit and Coinbase-more in derivatives and futures contracts of the tokens rather than the tokens themselves.
Comparison against Other Exchanges
Whereas Binance is offering pre-market trading with actual tokens, other exchanges have taken other routes: Bybit, for one, is offering pre-market trading-but to do so, users need to collateralize their assets in derivatives; the exchange doesn't exactly let users trade the real tokens themselves.
In another vein, Coinbase's prelaunch markets entail trading perpetual futures contracts, which then transition into regular contracts once those underlying tokens hit the open market.
In a way, the new service of Binance will let the users start immediate trading of the tokens and not wait for when those tokens would officially hit the market. The important thing to note, however, is that trading will close at least four hours prior to the official listing of any token to ensure a structured transition to a spot market.
Regional Restrictions and Future Plans
Currently, the Binance Pre-Market trading service is not available in several regions such as the U.S., Canada, Russia, Spain, the Netherlands, Dubai, and Japan, which may cover a significant amount of users around the world, and thus, most likely a topic for further discussion of how to make it more widely available.
Binance will continue to make announcements when Launchpool projects go live for pre-market trading availability. In the meantime, users can continue to subscribe to Launchpool projects normally. When such projects go live for pre-market trading, all eligible Binance Users will be able to trade those tokens.
Such a feature is now being tapped into with the HMSTR Token launch, scheduled for official release on September 26, 2024, with Binance already opening trading pairs in advance. This will not only allow users to invest in it from its earliest days but also place Binance at the forefront of innovative trading solutions in the crypto world.
