As cryptocurrency grows in popularity many investors want to learn everything they can about it. One important thing to understand about cryptocurrency is that there are exchange fees involved.
Knowing everything about crypto exchange fees can help you reduce your trading expenses. If you are looking to learn what these fees are and who has the lowest fee crypto exchange this article is for you. Here is everything you need to know about crypto exchange fees.
What Are Crypto Exchange Fees?
When you are investing in cryptocurrency there are fees to buy and sell it. Take Bitcoin for example. You have the price that it cost to buy it and then the cryptocurrency exchange tacks on a fee for trading the coin.
These exchange fees can either add or subtract liquidity to the order book through limit orders or market orders. Crypto exchange fees are calculated in two different ways.
The first way is by a 30-day percentage of your trade volume. The second way is a flat fee for each trade. Both ways are on a tiered structure. This means the total amount of your exchange fee will depend on the amount that is being traded.
Other crypto exchange fees are withdrawal fees, interest, borrowing, and liquidation fees. Some exchanges have deposit fees which can vary based on your deposit type. While withdrawal fees aren’t common there are exchanges that will charge you for it.
If the exchange you are using offers crypto margin trading they could charge you interest or borrowing fees. The reason being these exchanges allow you to create leverage or increase your position by borrowing additional funds.
There are crypto exchange fees charged based on a margin related to how much you borrowed. Fees are also charged if your trade decreases in position and is liquidated.
The Top Crypto Exchanges
There are various exchange platforms that you can use to buy and sell cryptocurrency. Two of the most popular exchanges are Binance and Kraken.
Binance is a global exchange that accounts for a good portion of crypto trading. This exchange is good for you if you are looking to invest or trade into altcoins that aren’t widely known. Binance is also ideal for those looking to have more advanced charting.
Another top crypto exchange is Kraken. Kraken was founded in 2011 and it is one of the oldest exchanges. With a maker-taker pricing model, Kraken doesn’t have its market makers paying fees. The catch is your 30-day trading volume has to be above $10 million.
If your volume falls then there is a 0.02% fee that can go as high as 0.16%. In contrast, takers fees will start at around 0.26%. Both of these percentages are based on trading volumes lower than $50,000.
Lowest Fee Crypto Exchange
If you compare Binance and Kraken fees, Binance is the crypto exchange with the lowest fees. On the taker and maker side, the fee is 0.1%. When you use Binance’s native for a crypto exchange fees are lowered by 25%.
Crypto Exchange Fees Don’t Have to Be Expensive
When considering what exchange to buy and sell your crypto you want to think about the cost of the fees. While there is no way to avoid crypto exchange fees, as you see some platforms make it easy for you to reduce the cost.