Buying Bitcoin and trading it involves several fees that you’ll need to pay. Now, this is true for all cryptocurrencies. However, different cryptos require different types of fees, and different platforms also have varying ways of charging clients.
Generally speaking, users tend to be charged fees for buying crypto, selling crypto and moving it around within the platforms (or even between platforms). However, the exact amounts and specific rules regarding these fees will differ depending on the platform in question.
Of course, as with any kind of investment, the aim for users is to try and get the best deal possible – that is, in terms of achieving their goal effectively while spending the least amount of money on fees. That’s why we’re going to run you through how to buy Bitcoin with the lowest possible fees. We’ll explain the fees that are involved in buying Bitcoin, the best Bitcoin brokers with the lowest fees, the best options and how they work and some of the key things to consider when buying Bitcoin. We’ll also have a quick look at a few alternative ways to invest in Bitcoin, just so that you know all the options.
So, without further ado, let’s dive right into how to buy Bitcoin with the lowest fees.
As we’ve mentioned, different platforms charge different fees for their services, so you’ll need to research the exact platform you’re hoping to use. But to start off with, we’re going to tell you a little bit more about the three main costs you’ll encounter when you’re trading with Bitcoin:
You’ll be required to pay a transfer fee when you transfer money from your bank account to the exchange that you’ve decided to use. This amount, like most of the other fees, will vary depending on the blockchain that you’re using. In addition, you’ll be charged a fee of between 0.5% and 2% when you use your bank to deposit funds.
Once you’ve purchased Bitcoin, you’re going to want to withdraw it – you have the option of doing so into either a hot or a cold wallet. Both wallets allow you to store and exchange cryptocurrency, Bitcoin and otherwise. The difference between hot and cold wallets is that the former is internet-enabled, and it operates completely online. Meanwhile, a cold wallet is offline and actually comes in the form of a physical device, such as a USB drive.
Thus, when you withdraw your Bitcoin from an exchange into either a hot or a cold wallet, you’ll be charged a fixed fee that is paid with Bitcoin.
Finally, the most obvious fee you’ll need to pay while using Bitcoin is a trading fee. This is a fixed fee that applies to all trades made on the exchange, but it varies from one exchange to the next. Bitcoin trading fees normally range from about 0.1% to 0.5% of the trades in question.
Of course, anybody wanting to trade in or get involved with Bitcoin is going to want to find a way to do it that’ll cost them the least amount of money when it comes to fees.
Here are the Bitcoin brokers that offer the lowest fees:
With so many platforms available and a plethora of different options to choose from, it can be difficult to know which direction to go when it comes to buying Bitcoin. We’re going to give you some insight.
Binance is the world’s biggest cryptocurrency trading platform. Not only is it the largest, but it also offers a large selection of coins (larger than many other platforms) that offer several different trading pairs.
Binance also offers several other services, including allowing you to take part in staking, Binance Earn and liquidity pools. Furthermore, their fees fall at the very lowest end of the spectrum at only 0.1% on buy or sell orders, which is quite a lot cheaper than many of their competitors.
The other advantage of using Binance is that they have different user interfaces that can be used by different clients based on how familiar they are with the process. That is, there’s a “convert” page that is ideal for beginners – this makes it a lot easier to exchange coins for Bitcoin. Alternatively, for those who know what they’re doing, there’s the advanced or classic pages. This allows you to purchase Bitcoin using different kinds of orders.
The top two features of Binance are that it boasts the best/lowest fees, as we’ve mentioned above, for depositing, trading and staking coins. The other key feature of this platform is that users are able to set up two-factor authentication which will add an additional layer of security.
Pros of Binance:
Cons of using Binance:
KuCoin is an incredibly popular platform, with almost 10 million users. The platform’s fees are already incredibly low, but they can be lowered even more. They’re dependent on your trading volume – the more you trade, the cheaper it gets – and if you have a KuCoin token, 25% cheaper. Generally speaking, though, depending on trading volume, trading fees range from 0.0125% to 0.1%.
The platform has several features that make it so attractive to users, including the fact that it has lots of trading pairs for Bitcoin and the opportunity to lower fees by 25% if you hold a KuCoin token. Furthermore, one in four investors in the platform uses it themselves.
Pros of KuCoin:
Cons of using KuCoin:
Although part of the same organisation as CoinBase, CoinBase Pro is the professional part of the platform. The fees are also reasonably low, at about 0.05%, and Bitcoin has several trading pairs with fiat currency and cryptocurrency. An additional feature that CoinBase Pro offers customers is the ability to set up limit, stop-loss and market orders with Bitcoin.
Another excellent feature of this platform is its heightened security in comparison to other platforms. That is, it requires two-step authentication when withdrawing coins making it far safer.
Here are a few of the most essential pros of CoinBase Pro:
Cons of using CoinBase Pro:
For those who value security and transparency over all else, Kraken is the ideal choice when it comes to looking for a reliable platform for purchasing and trading Bitcoin. When it comes to transparency, Kraken allows you to view recent audits if you’re a customer, directly from the platform itself, making it trustworthy. With regards to security, Kraken utilises several layers of protection, including air-gapped cold storage, two-step authentication, precise API key permission control and SSL encryption.
Of course, the other major selling point of Kraken is that it offers low fees for Bitcoin, ranging from 0% to 0.26%. The fees all depend on your trading volume, so if you’re trading a lot, it comes even more worth it to use Kraken.
Here’s a quick glance at Kraken’s most important pros:
Cons of using Kraken:
Last but not least, eToro is one of the top choices when it comes to providing CFDs for stocks and cryptocurrencies – that is, they use CFDs in place of real coins. On eToro, Bitcoin has a spread fee of 0.75%. The platform’s popularity and growing number of users allow it to offer significantly fewer fees for crypto transactions.
Another nice service that eToro offers is the potential of diversifying your portfolio, as they host a plethora of other coins too. This means that you can make your own selections, or, if you’re not sure of what to do, you can always copy somebody else’s portfolio – just make sure it’s someone successful!
Pros of using eToro:
Cons of using eToro:
Obviously, fees are a massive consideration when you’re deciding on which platform to use when you’re buying Bitcoin. However, there are a few other important aspects of the process you need to consider as well, a few of which we’ve touched on.
When you’re dealing with money and you’re doing everything online, security ought to be your top priority. Unfortunately, even though technology is improving every day, there have still been some scams and security breaches involving crypto exchanges. Thus, it’s essential that you’re extra careful. The best option is normally to use a platform that requires two-step authentication and uses whitelisted crypto addresses.
As we’ve already seen, some platforms’ interfaces are clear and nice and easy to use. Some even offer different options for different people, depending on your ability and experience. The last thing you want is to have to deal with a complicated buying process, because this will just make the whole situation frustrating and tedious. As long as the interface is simple and provides the most important information clearly and succinctly, you should be fine. This way, you can avoid making any mistakes.
If you’re a holder of various coins, then you’re going to want to use a platform that offers a good choice of trading pairs.
You’re going to want to avoid platforms that have very strict withdrawal limits because this may stop you from withdrawing the amounts that you need. The other thing that can make withdrawals more complicated than necessary is if the platform requires you to complete the KYC process, so keep an eye out for that.
If investing is your main objective, then it’s important to ensure that you select a trading platform that offers services like liquidity pools, staking and other things.
Of course, there are a few alternative ways that you can invest in Bitcoin. Here are a few options:
When it comes to buying Bitcoin, Bitcoin fees are always at the top of your list of things to consider in terms of which platforms are better than others. Luckily, as we’ve shown there are several different platforms that offer competitive fees, but they all work in different ways.
Thus, the best thing to do is to decide what’s most important to you and find a platform that matches your priorities.