The crypto world can seem challenging to navigate and risky for investors. However, many traders have found great success in cryptocurrency over the last several years. Today, there are so many options for cryptocurrencies and exchanges that it can be challenging to find the right one for you. Regarding trading, one of the most important considerations is the fees you will pay for each move you make in the market. Fees can hold you back from reaching your investment goals, so it’s essential to understand what costs are involved in trading and how you can minimize these expenses.
What fees are associated with trading crypto?
Fees vary from exchange to exchange, so it is essential to read the fine print before you start trading. Fees are usually charged per transaction, but some exchanges charge fees for depositing and withdrawing fiat currency. It’s also worth noting that exchanges often have different fee structures for market makers (those who add liquidity) and takers (those who remove liquidity). If you enter a dApp for yield-farming or staking, there are also fees associated with joining these pools, as there are for those who borrow from those pools.
Can I get a discount on crypto fees?
Cryptocurrency exchanges give discounts to traders who want to pay with fiat currency or credit cards. You can also get a discount if you pay in crypto, but it won’t be as big of a discount as paying with fiat.
It is also possible to receive fee discounts if you hold a specific cryptocurrency type. For example, FTX is offering fee reductions for those who invest in and hold their native toke, FTT. FTT stakeholders receive various benefits, including reduced fees across the FTX platform, token and NFT airdrops, and exclusive access to the FTX DAO.
How can I minimize fees?
The first thing to do is determine which trading platform has the lowest fees. There are many exchanges to choose from, but FTX is one of the only exchanges offering low fees, access to over 300 cryptocurrencies, and a broad knowledge base to teach investors everything from how to buy Matic to how to trade crypto on margin.
Below are a few things to consider when choosing where to trade:
- Trade on an exchange that offers free trades. If you’re just getting started and aren’t sure how much interest you have in cryptocurrency, it’s best to start small. One way of doing this is using a crypto exchange that offers free trades if you meet certain conditions (such as making a minimum deposit).
- Use a crypto wallet with lower fees. Another alternative for those who want to use their funds but avoid paying excessive transactions fees would be using one of the many mobile wallets currently available for Android or iOS devices, such as Jaxx or Breadwallet; these apps allow users complete control over their private keys, so there’s no need for third parties like banks when storing cryptocurrencies securely offline.
Once you’ve selected the best exchange, you need to fund your wallet to access the exchange and begin trading. The way you fund your investments can also impact the fees you will pay. Here are some options:
- Use a bank transfer to fund your account; this will reduce the amount of overall fees by a percentage point or two (if done correctly).
- Use a credit card to fund your account; this will not result in any additional fees but may result in decreased trading discounts if used frequently due to the higher risk associated with credit cards being compromised over time rather than bank accounts.
Crypto trading can be confusing, but with some research and simple tips, you can minimize your fees and save money. Do your research before going all in on any one crypto or exchange. Learning how to reduce your transaction fees could be a great way to save significant crypto year over year.
