Cryptocurrency trading has become increasingly popular in recent years despite notable bear markets that occur every few years. More and more individuals are turning to digital assets as a form of investment despite critics saying it’ll all go to zero. With the growth of the crypto market, there has been a corresponding increase in the number of exchanges offering cryptocurrency trading services.
When it comes to trading cryptocurrencies, one of the most important considerations is the fees associated with each exchange. In this article, we will take a closer look at some of the most popular exchanges and apps to understand their trading and withdrawal fees, advantages, and disadvantages.
Centralized exchanges examples
If there’s something a beginner investor should know, it’s the fact that Binance is the largest crypto exchange in the world with influence all across the globe. Binance is one of the most popular cryptocurrency exchanges in the world, and for a good reason. However, we will also cover other trading platforms that are not solely crypto exchanges, but brokers.
This is because they are also very favorable by traders along with investors, and their ease of usage. Trading platforms that also offer stocks or CFDs besides cryptocurrencies could also bring you benefits, such as bonuses or different charting options. That’s why we’ll also cover Robinhood and Webull.
1. Binance as the industry leader
The platform offers a wide range of cryptocurrencies for trading and has a user-friendly interface that makes it easy for beginner traders to navigate. Binance is the crypto exchange with the lowest fees as it charges a 0.1% fee for both maker and taker trades (for buying and selling). Withdrawal fees vary depending on the cryptocurrency being withdrawn, with a flat fee of 0.0005 BTC for withdrawing Bitcoin, for example.
Binance also offers a discount on trading fees for users who hold Binance’s native token, Binance Coin (BNB). Withdrawing fiat currencies like euros or US dollars from Binance is possible with a bank transfer that only costs one euro or a bank card withdrawal that costs 1.8% of the withdrawn sum. These withdrawals are mostly very fast and in the case of SEPA, it’s just one euro fee.
Binance also has its own NFT marketplace if crypto enthusiasts want to tap into non-fungible tokens. Binance has no doubt the largest range of products, also offering margin trading, futures trading, options, farming, loans, etc.
- Wide range of cryptocurrencies available for trading
- Low trading fees
- User-friendly interface
- Discount on trading fees for BNB holders
- Almost zero chance of losing money due to a hack or bankruptcy of the exchange
- Not available in certain countries (e.g. China)
- High withdrawal fees with card transfer or buying crypto with a credit card
- May be difficult for beginners
Robinhood is a popular commission-free trading platform that offers trading of stocks, options, and cryptocurrencies. Robinhood does not charge any fees for trading cryptocurrencies but does charge fees for transferring cryptocurrencies out of its platform. The withdrawal fee is 1.5% of the whole sum.
Robinhood fees are basically non-existent, people may think. If people trade a lot, this might be a good choice. However, a 1.5% fee for withdrawals is considerably high compared to Binance, which charges only one euro as a withdrawal fee in the case of SEPA.
While this broker, or a trading platform, was very popular in the late 2010s, a lot of people stopped using it because of its ties with Citadel, one of the largest hedge funds in the world. While traders weren’t charged fees for trading, their trades were sent to Citadel, which made little profits by practicing market-making.
Moreover, Robinhood basically halted trading on buy orders on Gamestop stock, which resulted in a panic. Traders only had the possibility to sell the stock, not buy it. Needless to say, Citadel was shorting the stock, so it went hand in hand with Robinhood to manipulate the market when necessary.
- Commission-free trading
- No additional fees for trading cryptocurrencies
- Easy-to-use platform
- More types of assets available for trading
- A limited selection of cryptocurrencies available for trading
- High fees for transferring cryptocurrencies out of the platform
- Buying or selling may be halted by the company’s needs
Webull is a commission-free trading platform that offers trading of stocks, options, and cryptocurrencies. However, Webull crypto fees are 1% for each trade, 100 basis points for every time traders click the sell or buy button. The platform offers advanced charting tools, making it a great option for advanced traders. It has been founded in the same year as Binance, in 2017.
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Investors and traders may unite at Webull and trade a variety of assets, including cryptocurrencies, stocks, options, ETFs, and more. But the trading fees are basically 10x higher than what Binance offers. Thus, it’s more suitable for investors who don’t make regular traders but buy and hodl their investments for the long term instead.
- Advanced charting tools
- Over 44 available cryptocurrencies to trade
- More types of assets available for trading
- High trading fees
- Not accessible in all countries (not available in Europe)
Other exchanges with low fees
There are several other exchanges that offer low fees for trading and withdrawing cryptocurrencies. Some of these include Coinbase Pro, which charges a 0.5% fee for both maker and taker trades, and Kraken, which charges a 0.26% fee for maker trades and a 0.16% fee for taker trades. There are many options but mainly think about your investment decisions, not the fees.
Choosing the right exchange for trading cryptocurrencies is a crucial decision, as fees can have a significant impact on a trader’s bottom line. But if someone is looking to invest only from time to time, security and investment strategy are much more important than trading fees. It is important to understand the advantages and disadvantages of each exchange, as well as the trading and withdrawal fees associated with each platform.
Binance is a great option for beginner traders as well as for advanced traders or investors due to its wide range of cryptocurrencies, low trading fees, and user-friendly interface. Robinhood is a good option for traders looking for a commission-free platform, while Webull may be a great option for advanced traders who are looking for a platform with advanced charting tools.
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Ultimately, the best exchange for an individual trader will depend on their specific needs and preferences. Before making a decision, it is essential to carefully consider the fees, the range of cryptocurrencies available for trading, the platform’s user interface, and the location of the trader. Each exchange has its advantages and disadvantages, and it is up to the individual trader to determine which exchange is best for their needs.