To help combat the practice of obscuring platform commissions, we produced a widget that clearly highlights the true fees associated with popular cryptocurrency exchange platforms — helping crypto traders make more informed choices about which exchange to trade with.
When it comes to selecting a cryptocurrency exchange, the usual list of desired features usually includes great liquidity, easy to use tools, and relatively low fees.
However, although great strides have been made in terms of liquidy and ease of use, many exchange platforms are still not forthcoming about the total fees that can be expected when using the exchange. Inevitably, this leads to users being charged more than expected, and often more than is fair.
Revealing Hidden Cryptocurrency Trading Fees
Although many traders often consider the overt trading fees charged by an exchange platform, it is important to note that most exchanges also feature fees that are less obvious and can, ultimately, reduce the profitability of trading on the platform.
One of these hidden fees is the spread, which is essentially the difference between the lowest ask price and the highest bid price on the exchange. Traders placing a market order on a cryptocurrency exchange with a high spread are therefore getting less bang for their buck since buy orders will be filled at far above the highest limit buy price, whereas sell orders will be sold at far below the lowest limit sell price.
As we can see, although Binance has one of the lowest taker fees around at 0.10 percent, when you also consider its average BTC/USDT spread of 0.22 percent, the total cost of using the platform is 0.32 percent per trade. Kraken and CEX.io are even worse since cryptocurrency traders can expect to lose 0.36 percent and 0.41 percent commission, respectively, on each platform with every trade. This is equivalent to losing as much as $41 on every $10,000 traded.
Now, while 0.41 percent commission doesn’t sound too bad initially when you consider the fact that trading cryptocurrency market movements of less than 0.41 percent are a net negative, it becomes clear that commission this high can seriously limit the number of profitable trading opportunities. These fees can also quickly rack up for high-frequency traders, who might end up seeing a large chunk of their profits eaten up by hidden costs.
It isn’t all bad news, however. Three of the cryptocurrency trading platforms tested feature total commissions under 30 percent, with Poloniex coming in at 0.29 percent, whereas XCOEX and StormGain manage to achieve an impressive 0.15 percent and 0.08 percent, respectively. To accomplish this, the incredible liquidity offered by XCOEX and StormGain keeps the spread at 0 percent, whereas Poloniex is right behind with a low 0.04 percent spread.
Using the Widget
To get these numbers, we didn’t just rely on the documentation provided by each cryptocurrency exchange, since this is often purposefully confusing to make it difficult to determine the commission costs. Instead, we registered at each platform, made a deposit, and placed a trade to ascertain exactly how much a trader can expect to lose due to commission with each trade.
By default, the widget will automatically rank supported cryptocurrency exchanges by the total commission — but the exchanged can also be ranked based on taker fee or BTC/USDT spread only.
As it stands, the widget tracks six popular cryptocurrency exchange platforms:
Over time, an increasing number of exchange platforms, filters, and options will be added, helping to bring increased transparency to even more cryptocurrency exchanges.
Full Disclosure: StormGain and XCOEX are cryptocurrency exchange partners of BeInCrypto.