New to crypto? This might save you a LOT of money

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New to crypto? This might save you a LOT of money

DISCLAIMER: Specific numbers cited below come from personal experience on some exchanges. They may not be accurate, because I might misremember, or because exchange fees can change. If anyone spots any errors in this post, PLEASE point them out, so I can make edits.

UPDATE: A couple of people have helpfully pointed out that my post doesn’t consider the tax implications of interconverting crypto. That’s true, and I am not yet well-informed about tax law. DYOR to learn whether this makes sense for you based on your country’s tax law. Basically, it might be important if you are only moving stuff off-exchange to HODL long term.

We make a lot of dumb mistakes in crypto. New people make more than experienced traders and HODLers, but dumb mistakes are by no means limited to n00bs. I have been lucky, and my own early blunders consisted of two transactions between which I paid a total of about $42 in fees that I didn’t have to pay, had I been more careful, and understood fees better.

Here I will cover the various fee types, and include some general advice on minimizing loss to fees. This is largely targeted at new crypto users, because I see a lot of posts that indicate newcomers lose money due to an incomplete (or non-existent) understanding of fees. The post is long, and there is no TL; DR version, but here's a quick outline:

  1. Five “rules” (personal suggestions, mainly) for keeping your fees low
  2. Explanations of the various fee types
  3. One example of how you might trade on an exchange with lower trading fees, yet take advantage of lower withdrawal fees on a different exchange


The first step is understanding the fees you are likely to incur on any transaction. You can’t manage or control anything until you understand what it is, why it’s happening, and whether there are ways you can affect it. I hope the remainder of this post will help with that.


Next up is awareness. Here I refer to reading the fine print on the actual transaction page, just before you click the button that will make the trade or transfer final and irreversible. This is the most important part of this post. No matter what I say below, what anyone else says, or what you read on exchange FAQs or any other web page, the amount a transaction will cost you will be displayed RIGHT THERE on the page, before you click. Read it. Calculate the fees in your native currency, being careful to enter the right number of zeros and the decimal point in the right place. That is the most certain indicator of your fees. If it seems bad, it probably is. This is your chance to back out and look for a different strategy.

Note that when I say the fee info will always be on the penultimate transaction page, I am speaking solely from my experience on Coinbase Pro, BinanceUS, and Kucoin. I am fairly confident that other exchanges will be similar, but I don’t know that. Also, if an exchange does NOT reveal how much a transaction will cost before you finalize it, IMO it’s probably withholding that info with the express purpose of making it easier to fuck you.


Don’t buy ETH, or any ERC20 token. I know this one will be controversial, but keep in mind I am targeting newcomers, and this particular rule is probably only temporary. I am not trying to cast Ethereum in a poor light, rather I am only trying to suggest things that will allow newcomers to get acquainted with trading without incurring unreasonable fees. The reason I suggest this rule is solely due to the current Ethereum network fees, and would not apply if you plan to HODL the coins on a custodial exchange wallet. But if you want to move them to a real wallet, it can cost you an obscene sum. Note that big changes are planned for the Ethereum network in the coming months and years, and the plan is to reduce the fees. Until that time comes, however, I recommend staying away from ETH and any other token that requires ETH for gas.

Honestly, if you’re new and just looking to get your feet wet, gain a better understanding of crypto, and hopefully make some money, the “no ERC20” rule isn’t very restrictive. There a lot of non-ERC20 coins that have been making big gains this year, and you know you can’t buy everything, anyway. Taking these fee monsters off the table won’t hurt you. It will make your decisions easier, and I guarantee it will save you money. So even though everyone is telling beginners to buy ETH, I’m suggesting the opposite. Stay away until the changes are implemented and stable.


Don’t use a wallet to make exchanges. The fees will kill you. In general, exchanging via a wallet will incur much higher fees than doing it directly on the exchange. Wallets will usually connect to some specific exchange to make exchange possible. Then they will charge you the fee they pay to the exchange, PLUS an additional fee. That’s what allows wallet creators to make money.

There’s a caveat to the information I’ve provided about wallets, and that is that I have only used a few of them. I can say from direct personal experience that Exodus wallet (it looks nice, it allows multiple coins, and yes, I use it) exists only because it is horse-dicking your asshole on exchange fees. Other wallets may be different. Your best protection here is to fall back to rule #2 above: be aware of the fees you will pay before you finalize a transaction.


Sometimes, when you find yourself moving coins between exchanges, you can save yourself a lot of money by interconverting currencies. I have generally found XLM and LTC to be good for this, but you do need to be aware that the market price of these can change during the transaction. Most often, that will result in a very small loss (or even a small gain) for you, but when markets are particularly volatile as they are now, the difference can be larger. Just keep this in mind. More on this, with a transaction example, toward the end of this post.


The major categories of fees include trading fees, network fees, flat transaction fees, maker/taker fees, and withdrawal (or deposit) fees. Some explanation of these follows.

Flat transaction fees

Let me get these out of the way first, as they are the dumbest, and the easiest to avoid. Some platforms charge a flat fee for any transaction. A notable example is Coinbase. Many first timer crypto transactions are done on Coinbase. Mine was. I bought $100 worth of bitcoin, and was charged a flat fee of $2.99. I don’t know if this is still the amount, and it may vary with the amount of the transaction. Bottom line, it’s a fee that doesn’t need to be there, and it’s exploitative. Exchanges make a shit ton of money from basic trading fees and from the spread on market orders, so a flat transaction fee is straight-up bullshit. Services that let you buy crypto with Apple Pay or credit/debit cards also generally charge such a flat fee, and it’s often a lot higher even than Coinbase.

The only way to avoid flat transaction fees is to NOT USE the platforms that charge them. For Coinbase, the solution is straightforward: switch to Coinbase Pro. It’s not hard. You will use the same credentials to log in, and if you have stuff on Coinbase, you can easily move it to Coinbase Pro without incurring any fees. There’s literally no reason not to use Pro.

Trading fees

This is how exchanges make most of their money, and I suppose it’s reasonable, being loosely modeled on stock exchanges. You make a trade, and you pay a very small percentage of the total trade value to the exchange. Fair enough…I am OK with this, at least until DEXes and P2P trading become more mainstream, manageable, and secure.

On Coinbase Pro, this fee is 0.5%. A half of a percent. So if I buy (or sell) $100 worth of BTC, my trading fee is 50 cents. Not terrible.

But for Binance, the fee is only 0.1%. This is one reason I am often surprised to see people complain about Binance fees, while also saying they use Coinbase. Coinbase trading fees are 5x what Binance trading fees are.

I am not shilling for Binance here. I use all three of the exchanges mentioned above, and never have any issues with any of them. I know customer support for ALL of them blows, but in general I believe if you read the FAQs and understand what you’re doing, you won’t have a problem (maybe I’ll change my mind one day if they screw me, but so far, so good).

An additional advantage of Binance is that if you hold some BNB on the exchange and use that to pay your trading fees, they reduce it even further, to 0.075%. Remember, I am only talking about trading fees right now. If you send money or crypto to an exchange, then trade it for other crypto, and leave it on the exchange, then trading fees are all you really care about. Leaving large sums of money or crypto on an exchange is generally not recommended, but perhaps not as horrible as some people here would have you believe. A deeper discussion of “not your keys, not your crypto” is beyond the scope of this post.

Withdrawal, deposit, and network fees

First, let me dispense with deposit fees. I see references to them here and there, but have never used any platform that attempted to charge me a deposit fee. I think a deposit fee would be 100% fuckery, but someone can chime in if they know of a case where it exists, and in particular of one where it would even be justified.

Withdrawal and network fees are somewhat similar, but not technically and precisely the same. Network fees are what allow crypto to move from one place or another, and they go to fund the maintenance of the nodes, whether they be PoS, PoW, or something else. Some exchanges may only charge you the standard network fees for withdrawal. Some will charge you a flat withdrawal fee that includes the network fee. Still others might have a separate withdrawal fee, and then charge you the network fee on top of that.

An exchange by exchange fee comparison isn’t really possible, and I would strongly recommend AGAINST trusting any such comparison you see on crypto web sites. These fees can change any time, and the web sites are not going to keep up. Bottom line, the first two rules of fee reduction above (understanding and awareness) will always protect you.

Network fees vary a lot between currencies, thus withdrawal fees will vary as well. As an example, here is the Binance fee schedule for all of the coins they trade.

I’ll stress once more that you shouldn’t blindly follow even the exchanges’ own pages on this, as they can be out of date, and they also have fine print about being able to change these fees any time. They will usually be accurate, but always refer to rule #2: On the actual transaction page, you should be able to see what your specific transaction will cost you, at the time you are trying to execute it.

I believe withdrawal fees on Coinbase Pro are generally a lot lower than on Binance, with Kucoin falling somewhere in between. This is possibly what people are talking about when they say Binance fees are high. Every coin is different.

Personally, I do a lot of trading on Binance because the trading fees are low. When I want to move some coins to a wallet, however, Binance might cost a lot more than CB Pro to do that. So I will do an interconversion as mentioned above. There’s an example at the end (you’re almost there!).

Maker/taker fees

I’m not going to cover these at length, but you will see them mentioned, so I figured they were appropriate to include here.

Briefly, this refers to liquidity, and when you are putting an order on the order book, you are making** liquidity rather than taking it, so you might get a fee reduction.

For the exchanges I have used, makers only get reduced fees over takers beyond a certain high dollar amount that most newcomers will not be trading, like ten thousand dollars and up. So if you’re trading in lower amounts, you don’t have to worry about this. It’s also worth noting that most of this entire discussion applies only to people trading sub-$10K amounts, and if you are moving much larger amounts of money, some of your other fees may also be reduced, depending on the exchange.


This example uses mock (but realistic) numbers: Let’s say I have $1000 in BTC on Binance and I want to move it to my wallet. Moving from Binance directly would incur a withdrawal/network fee of $25. If I had that $1000 BTC on Coinbase Pro, I could withdraw to my wallet for only $2. So on Binance, I convert that BTC to XLM for a fee of 0.075% (since I hold some BNB for the trading fee reduction). My cost there is 75 cents. I send the XLM to Coinbase Pro, for a withdraw fee of 0.02 XLM (according to the schedule linked above), which is about a penny. Once it hits CB Pro, I convert the XLM back to BTC. This time the trading fee is higher. For CB Pro, it’s 0.5%, or $5. Finally, I withdraw the bitcoin from CB Pro to my wallet, incurring another fee of $2. That’s a total fee of under $8 to move $1000 in BTC from Binance to my wallet, whereas moving it directly from Binance would have been $25.

If you’re new to all of this, that may seem complicated. Once you’ve done it a few times, it’s easy, although there are some precautions I would emphasize. First, during the time between converting to XLM and converting back, the price of XLM could change. Just be aware of that. Just about any coin can be used for this, though you’ll want something stable and with low network fees. Obviously, the coin must be supported on both exchanges. Second, your conversion trades should NOT be market trades. Make sure you do limit orders for amounts near the current bid/ask. An explanation of market vs. limit orders is also beyond the scope of this post, but you can easily find that info elsewhere. Just make sure you fully understand how to control your buy/sell prices before you do this.

Welp, that’s about it. I know this post is long and dull, but it would have saved me some money if I could have read it when I was just starting. I hope it helps someone else save money!

Finally, I will repeat that I want this to be as accurate and complete as possible, so if anyone identifies important errors or omissions, please comment. If it turns out I got something wrong, I will update the post.

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