With the rising popularity and value of cryptocurrency, more people are opening to trade in cryptocurrency. Trading in cryptocurrency has been profitable for many traders and easy to make profits. Since cryptocurrency is a digital currency, hence you need online trading exchanges where you can trade in cryptocurrency online from your smartphone or laptop. Before you start trading in cryptocurrency, you should be aware of a few things related to cryptocurrency exchange fees which are important to know before trading cryptocurrency.
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The things to know about cryptocurrency exchange fees
Before you start trading in cryptocurrency, you should know about a few other things related to cryptocurrency exchange fees, such as the types of cryptocurrency exchange fees, discounts, and few other facts. This will help you to understand the concept of crypto exchange and will aid you in smooth and efficient trading in cryptocurrencies.
1. Types of Cryptocurrency exchange fees
Trading fees are the most common fees charged at every online cryptocurrency exchange. While trading in cryptocurrency, the online crypto exchanges charge trading fees on trading from Fiat money to cryptocurrency and crypto to crypto trades as well. This is the primary source of income for online crypto exchanges.
Deposit and withdrawal fees
Deposit and withdrawal fees are charged by these online crypto exchanges when you deposit or withdraw money from your crypto wallet. Deposit fees differ, and it is related to the type of deposit you make, whereas withdrawal fees vary more as compared to deposit fees because the target of these crypto exchanges is to make the users fund their accounts by giving more incentive. Several Cryptocurrency exchanges set limits for their withdrawal fees for any transaction in cryptocurrency. There are few exchanges that take additional withdrawal fees for crypto users based on different countries or the type of cryptocurrency.
Interest, Borrowing, or Liquidation Fees
Some crypto exchanges provide crypto margin trading options. Crypto margin trading allows traders to earn more exposure to a particular asset by borrowing additional funds from other crypto traders on a crypto exchange. It increases your position and makes leverage, and this borrowing of additional funds costs extra fees based on the funds borrowed. Also, an interest rate is fixed based on the supply of funds. Liquidation fees are charged by crypto exchange if the trade goes negatively.
Market Makers and Volume Discounts
Several online crypto exchanges offer discounts to Market makers, traders, and volume traders. Market makers traders often get low trading fees and discounts on placing limit orders in place of market orders, whereas high volume traders get higher incentives and discounts on exchange liquidity of the cryptocurrency.
Exchange token Discounts
Exchange token discounts are offered to traders who buy cryptocurrency tokens of a particular crypto exchange. Many cryptocurrency exchanges have their own cryptocurrency token, and providing exchange token discounts enables the exchanges to make users invest in their tokens, and this increases the value of their cryptocurrency. This marketing strategy is widely used by several crypto exchanges and constantly adding value to their own crypto tokens.
3. Features of Cryptocurrency exchange fees
- Trading fees in several exchanges range from 0.1% to more than 1%. The charging of trading fees depends on the order of magnitude.
- The minimum taker fees are offered at 0.1% by some crypto exchanges. Crypto exchanges that have their own crypto tokens offer even lesser exchange rates if you use their exchange tokens for transactions.
- There are several crypto exchanges that don’t charge additional fees on purchases or deposits made through Bank ACH or direct cryptocurrency deposits. Purchase or deposit made through wire transfer or credit cards incurs additional fees charged by these crypto exchanges.
- Withdrawal fees on Cryptocurrency trading are restricted to the blockchain transaction cost. No additional fee is charged on withdrawal apart from few different countries and the type of cryptocurrency.
4. Quick facts about crypto exchange fees
- There are apparently over 300 crypto exchanges that deal with trading only in cryptocurrency. There are several other trading platforms which include stock and other trading assets trading in cryptocurrency. There are over 5000 different cryptocurrencies to trade with amongst which Bitcoin, Ethereum, Litecoin are the popular cryptocurrency which have the highest values.
- There are several decentralized crypto exchanges where the traders have to store the keys to their wallets by themselves, whereas the centralized crypto exchanges have complete control of your wallet keys. The decentralized exchanges are more secure as compared to centralized exchanges. The hackers cannot steal your funds when the exchange is shut down, and you can also recover your funds.
- Many crypto exchanges persuade trading with crypto coins. Deposit and withdrawal fees are generally charged on Fiat currencies at every crypto exchange, but the rates of crypto exchange fees usually differ in different trading platforms. Crypto exchange fees are usually lower if the amount of funds and frequency of trade are higher in a particular exchange. This attracts more traders to their crypto exchange.
Trading in cryptocurrency can be easy once you are familiar with the process and know everything about cryptocurrency. You have to keep updated with the fluctuations in the crypto market to make a trade at the right time to earn maximum rewards. Also, the selection of the platform from where you are making a trade is also important. Different crypto exchanges offer a different percentage of rewards, and also, the cryptocurrency exchange fees differ from one exchange to another. The cryptocurrency exchange fees also vary depending on the country you live in and the type of cryptocurrency you are trading with.