Key Takeaways
- Fees are the silent killer of crypto wealth. They are everywhere, and they eat into your profits.
- Strategies like choosing low-cost payment methods, trading during low-fee periods, and consolidating transactions can be used to reduce costs.
- Consider more than just fees when choosing a cryptocurrency exchange.
If you’re investing in crypto, there’s a good chance you’re buying bitcoin.
However, there’s always a “tax” for directly purchasing bitcoin, in the form of fees. Unfortunately, costs aren’t standard across platforms, so savvy investors will want to shop around to get the best (lowest) fees.
Finding a low-fee platform for buying bitcoin is about more than just saving a few pennies; it’s about maximizing your profits over the long run. Fees can significantly impact your profitability, especially if you’re an investor who makes consistent purchases over time.
In this guide, we’ll discuss bitcoin fees and show you where to purchase crypto at the lowest possible cost.
Understanding Bitcoin Buying Fees
Here’s how fees affect an investment portfolio over 20 years.
When working with different crypto exchanges, you’ll encounter three primary types of fees: trading, withdrawal, and deposit.
- Trading fees are fees charged per transaction and vary depending on the platform and transaction size. Some exchanges offer tiered fee structures. More active traders are rewarded with lower trading fees, which is great for institutional traders but doesn’t mean too much for small-scale investors.
- Many of these fee structures are made in a maker-taker model. “Maker” orders create buy or sell orders that aren’t immediately executed, like limit orders. “Taker” orders execute trades immediately, like market orders.
- Withdrawal fees are incurred once you move your bitcoin from an exchange to a private wallet. Fees are usually fixed amounts of BTC rather than percentages of the total transaction value (though that’s not true for all cases).
- Deposit fees are charged when you add liquidity (funds) to your crypto exchange account, whether in fiat or crypto. Generally, bank transfers will be cheaper than a credit or debit card, which would incur higher fees due to processing costs. The payment method is a significant factor in the overall cost of buying bitcoin, as each comes with its fees.
Comparing Fees Across Platforms
Lower fees are great for investors, as they maximize returns, support small transactions, and facilitate cost-efficient portfolio rebalancing. Here’s an overview of trading fees across platforms.
Tips to Minimize Fees
Fees can accumulate over time. Though seemingly small, they gather like raindrops that form into a flood, slashing your profits. Minimizing these fees requires understanding the nuances of your chosen crypto exchange and using overarching strategies that work for most use cases.
Some strategies can help you cut down on fees and grow your wealth faster:
- Only use specific payment methods. Bank and ACH transfers are usually low-cost methods for funding exchange accounts, though they take time to clear for regulatory purposes. Avoid using credit or debit cards, as these usually carry the highest fees due to network charges. However, they are helpful when you run out of tradable funds but see an excellent opportunity to buy.
- Only trade during low-fee periods. Some platforms adjust their fee structures based on market activity or time of day. Volume discounts and promotional periods can lower trading fees.
- Consolidate transactions. If you’re a retail investor who doesn’t plan to meet the requirements for a volume discount, consolidating transactions might be a good idea. The concept is similar to buying in bulk. For example, Gemini charges a flat fee of $2.49 for orders under $200. Anything over $200 is subject to a 1.49% flat fee.
Top Platforms with Low Fees for Buying Bitcoin
Binance.US
Purchase Fee: $0
Withdrawal/Transfer Fee: 0.0002 BTC
Minimum Purchase: 0.00001 BTC
See Complete Fee Schedule here
Binance.US is the United States arm of Binance, one of the world’s largest crypto exchanges.
Binance.US offers tiered pricing depending on trading volume and crypto pair. Their Tier 0 list reduces trading fees to zero with no minimum trading volume or holding requirements to meet. Bitcoin falls under their Tier 0 list of tradable assets and is free to trade.
Pros
- Bitcoin is free to buy and sell
- Low withdrawal fees
Cons
- An account can only be funded with crypto
- Regulatory issues
Bisq
Purchase Fee: 0.15%
Withdrawal/Transfer Fee: $0
Minimum Purchase: 0.061 BTC
See Complete Fee Schedule here
Bisq is far from the centralized exchanges we’ve seen on this list. It embodies the ideals of cryptocurrency as it uses peer-to-peer networks to facilitate trading. Think of it as buying cryptocurrency from places like eBay or Craigslist instead of Best Buy or Nike.
Because it is a decentralized exchange, it has one of the lowest fees on this list. Its transaction fees increase to 0.15%, but no minimum withdrawal or transfer fee exists. However, your account must have at least 0.061 bitcoin to cover transaction costs and security deposits.
Pros
- Decentralized and community-driven leads to some of the lowest fees on the list
- Strong security measures
- Users retain a level of anonymity not available elsewhere
Cons
- All transactions require bitcoin to start
- Limited customer support
Kraken
Purchase Fee: 0.16%
Withdrawal/Transfer Fee: 0.0002 BTC
Minimum Purchase: 0.00001 BTC
See Complete Fee Schedule here
Kraken is a crypto exchange primarily for experienced traders, with low fees for derivatives and high-volume traders.
Kraken offers tiered pricing for their fees. When trade volume is below $50,000, fees start at 0.16% fee for makers and 0.26% for takers. However, trading fees on margins and futures are much smaller, starting at 0.0200% for makers and 0.0500% for takers.
Pros
- Over 100 tradable tokens
- Offers much lower fees on margins and futures
Cons
- Not available in New York or Washington
- High fees for low trade volume (under $50,000)
Coinbase
Purchase Fee: 0.5%
Withdrawal/Transfer Fee: 1.0%
Minimum Purchase: 0.0001 BTC
Coinbase Pricing and Fees Disclosure
Coinbase is the most popular crypto exchange in the US market. It’s easy to use and offers great customer support, essential factors for beginner traders to consider when picking an exchange.
Coinbase’s transaction fee starts at 0.50%, and cash withdrawals incur a 1% fee. The hidden fees it adds to transactions are the thing to watch out for at Coinbase. These fees are not disclosed openly; you’ll only see them during an actual transaction.
According to the Coinbase Help Center, “When you buy, sell, or convert cryptocurrencies on Coinbase, fees are charged. These fees are calculated when you place your order and can be influenced by factors such as your chosen payment method, order size, market conditions, jurisdictional location, and other costs we incur to facilitate your transaction. You can view the fees in the trade preview screen before submitting your transaction.”
Additionally, withdrawing cryptocurrency from the Coinbase platform incurs network transaction fees that depend on network congestion and market conditions.
Pros
- Low minimum required funds
- Easy to use
- Open to U.S. investors
Cons
- Higher fees than most other exchanges
- Lawsuit with the SEC.
Gemini
Purchase Fee: 1.49%
Withdrawal/Transfer Fee: Dynamic based on network fees
Minimum Purchase: 0.00001 BTC
See Complete Fee Schedule here
Gemini is an industry-leading cryptocurrency exchange co-founded by brothers Tyler and Cameron Winklevoss. The exchange currently offers access to over 80 cryptocurrencies. It was among the first to receive SOC 1 Type 2 and SOC 2 Type 2 certifications, showcasing its commitment to building a highly regulatory-compliant crypto platform.
Pros
- Available across all U.S. states
- Strong security
- Trusted exchange
Cons
- Gemini has the highest fees on this list, as the exchange charges 1.49% on purchases and additional crypto withdrawal/transfer fees.
Crypto.com
Purchase Fee: 0.075%
Withdrawal/Transfer Fee: 0.0006 BTC
Minimum Purchase: $1
See Complete Fee Schedule here
Crypto.com is an affordable, low-cost cryptocurrency exchange that has made it their goal to integrate crypto into daily lives with the crypto debit card that offers as much as 5% cashback depending on the amount of crypto a customer has staked.
Crypto.com offers reasonable purchasing and withdrawal fees, starting at 0.075% for purchases.
Pros
- Low fees
- Crypto cashback rewards with a Visa card
- A comprehensive application for managing crypto payments
Cons
- Accessibility issues in the US
- App may be overwhelming for new users
Cash App
Purchase Fee: Up to 3%
Withdrawal/Transfer Fee: $0
Minimum Purchase: $1
See Complete Fee Schedule here
Unlike the other crypto-centric options on this list, Cash App is a full-service banking option, allowing users to get a debit card, receive ACH transfers, and invest in the traditional stock market.
While it’s a complete banking solution, Cash App’s fees are often higher than other exchanges. When purchasing $200-$1000 of BTC, Cash App charges a 1.75% transaction fee—the highest on this list.
Pros
- Access to other banking features and traditional stocks
- Free withdrawals.
- Great integration with day-to-day life
Cons
Bitstamp
Purchase Fee: 4%
Withdrawal/Transfer Fee: 0.0005 BTC
Minimum Purchase: 0.0002 BTC
See Complete Fee Schedule here
Bitstamp is one of the oldest crypto exchanges on this list, having served customers since 2011.
While exchange fees for traders are reasonable, the platform’s 4% charge for instant bitcoin purchases is the highest we’ve seen. Additionally, Bitstamp charges 0.0005 BTC for withdrawals.
Pros
- Easy to use
- Reasonable withdrawal/transfer fees
Cons
- Very high purchase fee
- History of security breaches
Other Considerations When Buying Bitcoin
Before using a specific exchange, remember that low fees shouldn’t be your only consideration.
Beyond transaction costs, consider the platform’s security features, user interface, customer support, and reputation.
Security features play a crucial role in an area as cutting-edge as cryptocurrency. Two-factor authentication, cold storage, and leading encryption protocols ensure your tokens are safe.
A clean and intuitive user interface makes executing trades and navigating the exchange easy. Bonus points for having a comprehensive mobile app that gives investors access to advanced trading tools without requiring a desktop platform.
Customer support is another crucial factor that feeds into the overall quality of your trading experience. Ensure the exchange you want has 24/7 customer support and adequate support channels.
Finally, consider an exchange’s reputation. Check its history for data breaches, security incidents, or compliance violations.
Investor Takeaway
Fees quickly eat up profits, no matter how small. Look for trusted exchanges with low purchase and withdrawal fees. Exchanges that focus on keeping costs low can also attract more users, which can further lower fees over time, in response to greater volume.
When choosing a place to buy bitcoin, remember that fees are only one part of the equation. Always consider trustworthiness, longevity, customer support, and security. And subscribe to our Bitcoin Market Journal newsletter to stay updated on the best rates and fees, every week.
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