What fees do you pay with crypto?

Using crypto involves several separate charges: a fee to trade, a spread built into the price, a fee to the network that processes transactions, and fees to move money in and out. Different parties collect them, often at different steps, so the total is easy to underestimate.

What do exchanges charge?

• Trading fees. A percentage of each trade. Many exchanges use a "maker-taker" model. Makers place orders that wait in the order book. Takers fill orders already there and usually pay more.
• The spread. The gap between the price to buy and the price to sell. On instant-buy services the platform quotes its own price with a margin built in. A service advertised as "zero commission" can still earn from the spread.
• Deposit and card fees. Paying by card generally costs more than a bank transfer.
• Withdrawal fees. A charge for sending cash to a bank or coins to an outside wallet. For coins it is often a flat amount that can exceed what the network itself charges.

Each crypto exchange publishes a fee schedule, and schedules change.

What are network fees?

Network fees are paid to the miners or validators who add transactions to a blockchain, not to an exchange or wallet company. On Ethereum they are called gas fees.

A network fee depends on how busy the network is and how complex the transaction is, not on the amount of money moved. Sending $10 can cost as much as sending $10,000. Fees climb when many people want to transact at once. A layer 2, a network built on top of a main blockchain, exists largely to bring these costs down.

What other costs are there?

• Decentralized exchanges. A swap on a DEX carries a fee to the pool's funders, a network fee and slippage, which is the price moving against the trader as the order fills.
• Funds. A spot bitcoin ETF charges a yearly management fee, taken from the fund's assets.
• Bitcoin ATMs. Kiosks typically add a large markup to the price.
• Futures. Leveraged positions pay funding and liquidation fees on top of trading fees.
• Staking. Services that stake coins for customers usually keep a share of the rewards.

How do you see the true cost?

The fee line on a receipt rarely tells the whole story. The fuller measure is to compare the money paid with the market value of the coins received at that moment. If $100 goes in and the coins that arrive are worth $97 at the going market price, the purchase cost 3%, whatever the stated fee.

Costs apply in both directions, so buying and later selling means paying twice. Flat minimum fees weigh most heavily on small purchases.