Cryptocurrency exchanges charge different fees when you’re buying, selling or trading crypto.
Some exchanges like to say they have absolutely no fees at all. And this may be true, but there are times where "no fees" are actually "hidden fees". Here are some common fees to look out for when choosing a cryptocurrency exchange :
Funding (or Deposit) fees: Funding fees are what exchanges charge you to be able to put your money (or crypto) into the exchange.
Service fees: Service fees are the operating costs that an exchange may charge when you make a trade. This is often a percentage of your trade.
Withdrawal fees: Withdrawal fees are charged to you when you are cashing out (like sending money to your bank account) or when you move your crypto to an external wallet.
Spread: A spread is the difference between a buy price and a sell price. It's like a hidden fee.
An exchange can have no funding, service or withdrawal fees but have a huge spread instead. In this case, it ends up being more expensive than another exchange that has a service fee but a tighter spread for example.
Foreign exchanges are a great example of how spreads are used. For example, if you want to buy $100 USD, it’ll actually cost you $130 CAD. If you want to sell $100 USD, you’ll only get $120 CAD in return (losing $10 CAD). The difference in the buying price and selling price is the spread.
Remember, most exchanges offer different cryptocurrencies and will have different fee structures. You’ll find some exchanges offer 0% fees, but apply a bigger spread for their profit. Others might charge a service fee, but have a smaller spread. It’s up to you to know what the exchange will offer you, and the fees they will charge you, before trading with a crypto exchange.
When it comes to choosing your cryptocurrency exchange , it’s important to do your own research and understand the platform - and team - you’re investing in. Ideally, choose a cryptocurrency exchange that will allow you to pull out your money quickly and is based in the country of your residence.
Netcoins is Canada’s first publicly owned crypto trading platform to be fully regulated. Simply create an account with Netcoins, fund it with an e-Transfer (more funding options available) and head to the trade page to buy bitcoin . Sign up today!
If you want to learn more about all things in crypto, read more here.
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The information provided in the blog posts on this platform is for educational purposes only. It is not intended to be financial advice or a recommendation to buy, sell, or hold any cryptocurrency. Always do your own research and consult with a professional financial advisor before making any investment decisions. Cryptocurrency investments carry a high degree of risk, including the risk of total loss. The blog posts on this platform are not investment advice and do not guarantee any returns. Any action you take based on the information on our platform is strictly at your own risk. The content of our blog posts reflects the authors’ opinions based on their personal experiences and research. However, the rapidly changing and volatile nature of the cryptocurrency market means that the information and opinions presented may quickly become outdated or irrelevant. Always verify the current state of the market before making any decisions.
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