It’s easy to get excited about the explosive growth of Bitcoin and other cryptocurrencies. You may even be looking at the recent drop in the price of Bitcoin as an opportunity to get in the market. We aren’t looking to convince you that you should be in the market for any particular cryptocurrency, but we want to help you save the most money on any cryptocurrency purchases and transactions. We put together a guide to the highest rated cryptocurrency exchanges and those with the lowest fees.
Understanding Typical Fees for Cryptocurrencies
There are a few key things that will impact the costs and fees associated with any activity on a cryptocurrency exchange. The first thing to understand is that the country you make your purchases, trades and transactions in can have a significant impact on your costs. There are also different fees with most exchanges depending on your payment method. Each currency has its own fee structures as well and they vary depending on whether you are purchasing new currency or using the currency for a different transaction.
There are a few other common fees associated with the various options for purchasing and trading cryptocurrencies. Any purchase of new currency will typically involve an exchange fee. This will vary depending on which exchange you use. There are also trade fees when you exchange one currency for another. This could be the exchange of US Dollars into Bitcoin or the exchange of Ethereum into Litecoin. Each currency exchange has separate costs associated with that exchange and those can be significantly different between currencies and exchanges. You will also run into Maker fees when you create an offer to sell Bitcoin (or any cryptocurrency) and Taker fees when you accept an offer to purchase a currency from another user on the exchange. The final common fee on cryptocurrency exchanges are the deposit and withdrawal fees.
Best Cryptocurrency Exchanges
Now that you understand some of the basic fees to expect, the main question is which cryptocurrency exchange will be best for your desired transactions and currency. Here are the best current exchanges for a number of different currencies.
We start our list with Coinbase, because it is the largest exchange in the United States and many other parts of the world. It is also makes the process extremely simple. There are plenty of downsides to it as well. For starters, they only currently support Bitcoin, Ethereum, and Litecoin. If you are looking for some other altcoin, like Monero or Raiblocks, you will need to setup additional accounts on other exchanges. Coinbase currently accepts US Dollars, Euros, and Great British Pounds for deposits.
You can deposit funds into your Coinbase account using a credit card or bank account. They will allow for instant purchases of cryptocurrency with your credit or debit card for amounts up to $400. If you are looking to make a larger purchase, you will need to connect a bank account and the process can take up to 10 days to complete. Coinbase charges a deposit fee of 3.99% for credit cards and flat fee of $10 for wire transfers in the US. They charge 1.49% for withdrawals to your bank account and trades between other currencies on their exchange.
If you already have a Coinbase account, you will want to become familiar with GDAX. The exchange is owned by Coinbase and it is designed for high volume trading and larger purchases. GDAX has the same cryptocurrencies as Coinbase on the exchange, Bitcoin, Ether, and Litecoin. However, they have 0% maker fees and taker fees of .1% to .25% depending of the size of the trade. They charge the same 3.99% for credit card deposits. GDAX charges a flat rate of $25 for withdrawals to your bank account.
Mercatox is a decentralized peer-to-peer cryptocurrency exchange that currently supports trading of more than 80 digital currencies. This is a great exchange to consider if you would like to purchase or trade in many of the new altcoins that have shown up on the scene. You will not be able to make bank or credit card deposits directly to Mercatox. They currently require you to deposit Bitcoin in order to open an account. Once you have deposited Bitcoin, you will be able to trade in all of their available currencies with a low trading fee of .25% per trade.
Kraken is one of the most popular exchanges in the world, but it is not necessarily a great exchange for new users. It has a complicated user interface and the fee structures can be complicated. One of the advantages of Kraken is the large number of currencies they support for deposits. There are currently more than 16 currencies that can be used for deposits into your Kraken account, including US Dollars, Euros, Japanese Yen, Canadian Dollars, Bitcoin, Dogecoin, Lumen, ZCash, Monero, Ripple and more. Kraken does not currently support credit or debit card deposits.
The typical costs for Maker fees on Kraken range from 0% to .36% depending on the amount and currency pair. Their taker fees are between .1% and .36% of the transaction amount. For bank withdrawals, they typically charge .19%. It can be less for some currency withdrawals.
CEX.io was one of the first exchanges in the United Kingdom and still one of the most popular in Europe. They have fair fees and support both credit card and bank deposits. You can currently deposit in US Dollars, Euros, Great British Pounds, Russian Rubles, Bitcoin, Litecoin, and Ether. CEX.io does not charge a maker fee for trades and they charge between .1% and .2% for taker fees.
LocalBitcoins is one of the most flexible exchanges in the world. There are no fees for buying Bitcoins, but there is a 1% fee for selling Bitcoin. Although there are reports of suspicious users, the public rating system of sellers and buyers allows you to decide on your own. You can use an assortment of payment options through their system, like PayPal, Western Union, bank transfer and even cash. LocalBitcoins is unique because it will allow you to complete transactions with a local wallet without any need for web-based exchange.
Making Your Decision
As we mentioned earlier, we aren’t saying you should be buying any particular cryptocurrency and there is certainly risk involved if you are expecting some return on your investment. There is extreme volatility in cryptocurrency markets and an individual currency can frequently go up or down by 10% or more in a single day. If you are thinking about making your first cryptocurrency purchase, you will want to understand the best practices for keeping your cryptocurrency safe and secure. Investopedia.com put together an excellent guide for the best way to keep your currency as safe as possible. We highly recommend you understand these important guidelines before making any purchases or trades in cryptocurrency.