Like stock trading, most crypto trading happens at crypto exchanges. These platforms are familiar places for crypto sellers and buyers to meet and trade their crypto assets. The crypto exchanges provide tools to both parties for trading and charge fees.
However, not all crypto exchanges are transparent and investor-friendly. Many exchanges charge crypto trading fees with no intention to tell traders about it. These fees are automatically deducted when crypto trading occurs, and the trader has no option but to accept the hidden costs.
Here are the types of hidden fees when trading in crypto.
1. Deposit and Withdrawal Fees for Fiat Currencies
Crypto exchanges allow investors to buy cryptocurrencies with fiat currencies. It means you can purchase cryptocurrencies with AUD or US dollars. You have to fund your crypto trading account by transferring AUD to your crypto trading account and using the funds to buy crypto coins.
Many exchanges charge deposit fees for the funds you transfer to your crypto trading account. For example, some exchanges charge around 2 to 3.95% fees on deposits. For every 100 AUD, you will be paying 2 to 3 AUD to the exchange as a deposit fee. The same rule is applied when you withdraw funds from the crypto trading account to your checking account.
2. Trading Fees
A trading fee is a means of income for crypto exchanges, and it is common for exchanges to levy trading fees for conducting transactions on their platform. However, there is no standard fee structure for trading fees. Some exchanges may charge around 2 to 3% of the trade volume, while some may charge as low as 0.6%.
3. Deposits and Withdrawal Fees for Cryptocurrencies
Some crypto investors store their crypto assets held in a hardware wallet. Such investors need to transfer their crypto coins to digital wallets provided by crypto exchanges. You might be required to pay a certain fee to transfer your crypto coins from a web-based or hardware wallet to an exchange wallet.
Similarly, you will be required to pay withdrawal fees when you move your crypto coins out of your digital wallet to another secure place.
Before entering the crypto trading arena, you should know these crypto trading fees. Many investors feel these fees take away a large part of their profits, and they are always looking for ways to work around these fees.
If you are also one of them and want to save on trading fees, you need to select the right crypto exchange platform.
There is no standard model followed by crypto exchanges when levying trading fees. Everyone follows their own rule and expects traders to follow them. The best way around these high trading fees is to select a crypto exchange that charges lower trading fees. But there are some things you need to look for when choosing a crypto exchange.
- Zero Deposit and Withdrawal Fees – Several leading crypto exchanges do not charge any fees for deposits or withdrawals of fiat currencies.
- No Additional Charges for Crypto Deposit and Withdrawals – You can find many exchanges that do not levy any additional charge for crypto deposits and withdrawals. However, you are expected to pay network charges for crypto-asset transactions. These network charges are pretty low in the range compared to the value of the crypto assets.
- Low Trading Fee – Some exchanges charge trading fees as low as 0.6%. Besides, these platforms also offer an additional discount for high volumes.
So, these are a few ways to save yourself from hidden trading fees and get the maximum profits of crypto trading.