Cryptocurrency is being used extensively by many investors. It is important to know crucial details about trading in order to make the most of your investing experience. Utilizing trading strategies is important but one also needs to maximize profits by minimizing additional costs that can be avoided. One of those additional costs are trading fees that can take up a lot of unnecessary costs from your pocket.
There are some ways in which you can save up on the total costs. In this article, we will explain some of the major ways in which you can avoid paying high cryptocurrency trading fees.
Choose a Commission-Free Trading Exchange
There are many investing apps in trading platforms that offer their services completely free of cost. Commission free platforms are great for new investors who want to save some extra bucks while engaging in high frequency trades. There are different cryptocurrency trading platforms that offer commision free services.
However, there may be some platforms that only offer free services for a limited period of time after which you will have to pay for a premium membership. There are services that allow users to sign up for free and engage in live tracking of crypto they are trading in. Platforms like bitcoin-up.live. are designed for new and old users to make tehri investoren experience easier.
Use Promotional Offers
Whenever a new user science upon a platform there are some promotional offers they can take advantage of. Crypto exchange platforms are much like any other business trying to build a customer base which is why they have promotional offers that can help you minimize the trading fees.
Make sure to compare the sign up offers of different exchange platforms as they can give you free cryptocurrency or commission free trade for your initial month. These promotional offers are perfect for maintaining balance in your portfolio and can come in the following ways:
- Getting bitcoin worth a specific amount
- Getting cashback into your account after linking your bank account with the exchange app
- Getting cahaback after referring a friend
Buy with Coins
There are instances when a trader or investor would want to liquidate the cryptocurrency into the fiat currency. Withdrawal services are included as transaction fees and have a flat fee on certain exchange platforms.
There will be fees to pay at both ends of the transfer: from the crypto exchange for the withdrawal and in the digital wallet for the deposit. Using the coins to trade rather than opting for liquidity. A chance to reduce the overall fees.
Be Aware of the Transaction Types
You should be aware of the different transaction types because they work differently and can cost you more when compounded together. Depending on how you are trading and the market rate there might be time when you want to exit by selling. Sometimes the investment does not work out and you might want to exit the trade so baking out from a holding can cost you extra.
One way to avoid this unnecessary cost is by replacing the current cryptocurrency trading with another holding. Save you some money you will have to pay conversion costs. They are also applicable when you liquify your crypto investment into fiat currency.
Know the Transaction Amounts
You need to have a strategy when it comes to managing the different transaction types. The standard practice is charging a certain percentage of the overall exchange which cannot be changed because it follows the policy of the exchange platform.
If the charge is one percent, you are going to be paying more as you trade a larger amount. It is very important to know how much is going out of your pocket when you are enlisting the service of any platform.
What are the Major Types of Crypto Trading Fees?
Every crypto transaction brings with it a certain set of standard deductions. They can be changed in a moment;s notice and there is nothing the user can do about it. There are different costs that you will be familiar with during your course of crypto transfers. The extra cost are divided into two categories, a=namely:
Exchange Fees
The exchange platform allows for multiple services at your fingertips. Because of the high level of convenience, the platforms attach some level of fees with their services. They are cost attached to the following basic services:
- Deposits when made to other online platforms
- Liquidity and withdrawals
- Trading
- Loans
Network Fees
Everyone knows that the biggest advantage of trading or dealing with rypto is that it is a decentralized platform. Blockchain technology is not centralized like other currency or trading platforms involving fiat currencies. This gives users who access the exchanges from over the world the connecto trade irrespective of time or geographical locations. The networks function across boundaries.
There is a level of anonymity involved with each crypto transaction. But each translation is still validated and verified for legitimacy. The network fee is related to the cost of validation of your credentials and details in the public blockchain. It can fluctuate based on the network you are using.
What to Remember
One has to remember a single thing while making all of their trading and investing decisions. The core of the decision should be on the returns and maximizing profit as much as possible.
The additional cost and commissions from platforms can really eat up into your portfolio and be detrimental to your investment in the long run. Third party costs can be avoided if you are vigilant about the transaction types, amounts and promotional offers. Being resourceful will allow you to reduce some of that additional burden.
The Takeaway
Any investor looks for ways to avoid paying extra transaction fees during transfers. When you are a trader who is engaging in multiple trades per day, these extra costs can take up a big fraction of your overall earnings. One needs to know about the two types of transaction fees and promotional offers.
