When you exchange crypto, there are fees attached to each transaction and these fees can be a major drain in your pocket especially if you are trading at peak hours. Unfortunately, fees can’t be avoided as they are sometimes charged by the platform where you want to exchange cryptocurrency or the blockchain you want to use. At times, both the platform and blockchain can charge fees on your transaction. However, there are ways to save money on crypto trading. In this article, we will be looking at how to save money when exchanging crypto.
Explaining crypto exchange fees
As mentioned above, exchange platforms charge customers transaction fees on transactions carried out on their platform. We define some of these exchange fees below:
- Withdrawal and deposit fees
An exchange provides a platform for users to trade and transact cryptos. To do that you will need to withdraw or deposit crypto to the platform for exchange to take place. Exchanges charge users fees on deposits and withdrawals to their platform. However, some exchanges don’t charge any fees on deposits to their platform.
- Trading fees
This is the fee charged on every transaction. Whether you convert your crypto to another token/coin or fiat currencies, anytime this occurs, you are charged a fee.
- Borrowing/Liquidation/Interest Fees
These fees are usually incurred by margin traders who borrow funds to boost their position. The fee is based on the borrowed amount on margin and the interest rate.
Choosing the right crypto for transfer
One of the ways to save money when you exchange crypto is to choose the right crypto for transfer. You can follow the following tips on how to save money by choosing the right cryptocurrency to exchange.
- Choose your level of risk
Each crypto has its level of risk due to volatility; the more volatile a crypto is, the more the fees associated with it are likely to fluctuate. Take crypto like Ethereum for example; it is a more volatile token compared to a stable coin like BUSD. It is also more traded, which means its fees can sometimes jump up to a high level that some traders can’t cope with. Once you understand this, you will be able to look for crypto with lower fees and less volatility that can save you money on each transaction you make.
- Conduct independent research
The key to selecting the right coin to save money is conducting independent research. It gives you a better judgment when choosing the right crypto to transfer. Looking at the historical data of any coin of interest can give you a better idea of fees associated with them and the fees have changed over time.
- Be aware and vigilant
Selecting the right crypto to trade on a new exchange is not an easy task. You have to be constantly vigilant on fees and the cost of transactions. Awareness is key to not falling into high transaction fees.
Avoid peak times
Another way to save money is to know the peak times of crypto trading and avoid them. Exchanging crypto is not like regular commodities and stocks trading. The market for cryptocurrencies is open all through the week at every hour of the day through several crypto exchanges.
The usual peak hours for crypto trading are normally around 8 a.m. to 4 p.m. in your market locality. For every locality, these peak hours usually see the highest number of transactions and subsequently the highest fees and cost of transactions. Once you are able to ascertain your region’s peak hours then you can figure out how to save money on a transaction by favoring the non-peak trading hours.
Change crypto only on trusted platforms
Everybody wants a piece of crypto and to do that you need to visit a crypto exchange platform available in your locality where you can exchange cryptocurrency. The best way to go about exchanging your coin is to do it on a trusted platform. Not only will you be protecting your funds from dubious channels that could siphon them, but you will also be able to save money on transactions.
So, selecting a reliable and trustworthy exchange platform can be tedious. However, there are important features to consider such as security, fees, and if they list the assets that you are interested in. A secure exchange is important for protecting your funds when transacting on the platform. You will also need to watch the fees so they don’t eat into your funds.
There are many exchange platforms to choose from that are dependable, reliable, and trustworthy. One of these platforms is Swapzone, an exchange aggregator that finds you the best exchange and price all in one place to effortlessly allow you to save money and time on the transaction process. Swapzone is a non-custodial exchange aggregating platform that doesn’t charge any fees on the transaction. Any fee charged is by partner exchanges of which you can choose the cheapest one to help you save money on transactions.
