Crypto Exchange Fees

Trading crypto usually involves two types of fees on crypto exchanges, standard trading fees and fees for purchasing and withdrawing crypto.

Trading Fees

Trading fees come in a variety of types. They are often a specific percentage of the volume of crypto you buy or sell. Trading fees also exist for futures trading, where - depending on the proportion of shorts to longs - fees are paid one way or the other, with the exchange taking a slice for facilitating the market.

Sometimes the trading fee is a flat fee, whereas sometimes exchanges don't charge you a fee outright but instead make money on the spread between the bids and the asks, in a way a classic market maker would. These fees can be 'invisible' to the user but cost far more than a flat fee.

Trading fees also differ depending on whether you use an exchange's basic or 'pro' edition. The pro editions are often free but are more complicated to use and understand. However, the difference between the two can be massive, so it's well worth training yourself to use the pro editions to save yourself money in the long run.

Exchanges often have different fees for makers and takers. They incentivize market makers to fill up the exchange's order books with limited orders, enabling takers (typically retail traders).

Withdrawal Fees

Often, exchanges will charge withdrawal fees if you want to move your crypto off the platform. These are often nominal, but they can sometimes be huge. It all depends on the token in question. The exchange has to cover the transaction cost of sending the coins on-chain, and they very frequently charge a markup.

For fiat off-ramps, the fees can still be more significant. Many exchanges say they are charging no fees, but the exchange rate of the notional USD or GBP you are buying is often far, far worse than the standard exchange rate for the currency at any given time.

Other Fees

Buying crypto off an exchange using their on-ramp mechanisms can be very expensive, whether with a credit or debit card. Fees of up to 3.5% are standard, depending on the exchange. However, many crypto exchanges offer bank transfers, far cheaper to execute but take longer. Yet, in certain jurisdictions, such as Binance in the UK (and others), bank transfers are not available, forcing users to use their credit cards and suffer the high rates.

Depositing crypto, in most cases, is entirely free, except for network transaction fees associated with the deposit.

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