Today we are going to talk about a very important topic that can influence your budget. When we trade cryptocurrencies on exchanges, we always have to pay fees. Keep in mind that there are different kinds of fees.
Group 1: Deposit Fees
Exchanges usually don’t charge any fees at all when you deposit cryptocurrencies. They’re happy enough that you have chosen to place and trade your crypto there. However, when you deposit fiat currencies, deposit fees are almost always charged. The amount of deposit fees depends on the way your payment is made. Bank transfer deposits usually have low deposit fees, while debit card deposits are higher.
✔️ The deposit fee on Cryptology is free (minimum deposit is 25$).
Group 2: Trading Fees
Every trade occurs between two parties: one person whose order exists on the order book prior to the trade, and another person who places the order that matches the first person’s order.
🔸 The first person is called a “maker”, as they “make” the order that gets executed.
🔸 The second person is called a “taker” as they take the order that the maker made.
Makers’ orders make the liquidity in a market. Takers are the ones who remove this liquidity by matching makers’ orders with their own. Normally, takers pay higher fees than makers. Makers accordingly receive a discount for providing the liquidity in the market.
- Maker’s fee: -0,01%
- Taker’s fee: 0,01%
Group 3: Withdrawal Fees
This is the final group of fees that exist. Let’s say that you have been trading at an exchange for a while and you have made a good profit, and for some reason, you need to withdraw your funds. For instance, you have to pay for something or you just want to move the assets to a separate wallet or another exchange. Then, exchanges normally charge you withdrawal fees.
🔹 Fixed Withdrawal Fees
Withdrawal fees are typically fixed at a certain level, regardless of the size of the withdrawn amount. So, if you withdraw BTC, it is the same fee for withdrawing 1 BTC as it is for withdrawing 1,000 BTC. Many exchanges only charge the network fee, i.e. the mandatory fee that you incur in every transaction on a certain blockchain. This is consumer-friendly.
🔹 Percentage-based Withdrawal Fees
There are also exchanges charging percentage based withdrawal fees. With a percentage based withdrawal fee model, when you withdraw small amounts, the fee is beneficial to you. On the other hand, if you withdraw a big amount of crypto, the fee becomes extremely high. You should consider whether this withdrawal fee model is suitable for your own trading.
As you see, before starting trading crypto at any specific exchange, you need to assess the fees taken as a whole.