Where to buy Bitcoin with the lowest fees
Key Takeaways
- Fees are the silent killer of cryptocurrency assets. They are everywhere, and they eat up your profits.
- You can reduce costs by using strategies such as choosing cheaper payment methods, trading during low-fee periods, and consolidating transactions.
- When choosing a cryptocurrency exchange, consider more than fees.
If you’re investing in cryptocurrency, you’re likely to buy Bitcoin.
However, if you buy Bitcoin directly, there will always be a “tax” in the form of a fee. Unfortunately, fees are not standard across platforms, so savvy investors will want to shop around to get the best (lowest) fees.
Finding a low-fee platform for buying Bitcoin is about more than just saving a few pennies. It’s about maximizing profits in the long run. Fees can have a big impact on your profitability. This is especially true if you are an investor who continues to buy over time.
In this guide, we will discuss Bitcoin fees and show you where you can buy cryptocurrency at the lowest possible cost.
Understanding Bitcoin Purchase Fees
Let’s take a look at how fees affect your investment portfolio over 20 years.
When working with various cryptocurrency exchanges, you will encounter three main types of fees: trading, withdrawals, and deposits.
- transaction fee The fees charged per transaction vary depending on the platform and transaction size. Some exchanges offer tiered fee structures. More active traders are rewarded with lower trading fees. This is great for institutional traders, but doesn’t mean much to smaller investors.
- Most of these fee structures operate on a maker-taker model. A “maker” order creates a buy or sell order that is not executed immediately like a limit order. A “Taker” order executes a trade immediately, like a market order.
- Withdrawal Fee This happens when you transfer Bitcoin from an exchange to a personal wallet. The fee is usually a fixed amount of BTC rather than a percentage of the total transaction value (but this is not the case in all cases).
- deposit fee Fees apply for adding liquidity (funds) to your cryptocurrency exchange account, whether fiat or cryptocurrency. Bank transfers are generally cheaper than credit or debit cards, but they incur higher fees due to processing costs. Payment method is an important factor in the overall cost of purchasing Bitcoin. This is because each payment method comes with a fee..
Cross-platform fee comparison
Low fees are good for investors because they maximize returns, support smaller transactions, and facilitate cost-effective portfolio rebalancing. Below is an overview of trading fees by platform.
Tips for minimizing fees
Fees may accumulate over time. They may seem small on the outside, but they gather like raindrops and cause flooding and a loss of revenue. To minimize these fees, you need to understand the nuances of your chosen cryptocurrency exchange and use a comprehensive strategy that suits most use cases.
Some strategies can help you reduce fees and grow your wealth faster.
- Only use specific payment methods. Bank and ACH transfers are generally low-cost ways to fund an exchange account, but they take time to clear for regulatory purposes. Avoid using credit or debit cards as they usually have the highest fees due to network fees. However, it is helpful when you lack tradable funds but have a good opportunity to buy.
- Trade only during periods of low fees. Some platforms adjust their fee structures based on market activity or time of day. Volume discounts and promotional periods can help you lower transaction fees.
- Consolidate transactions. If you’re a retail investor who doesn’t plan on meeting volume discount requirements, consolidating deals may be a good idea. The concept is similar to bulk purchasing. For example, Gemini charges a flat fee of $2.49 for orders under $200. A flat fee of 1.49% applies to amounts over $200.
Best platform with low fees when purchasing Bitcoin
Binance US
Purchase fee: $0
Withdrawal/transfer fee: 0.0002 BTC
Minimum purchase: 0.00001 BTC
View the full fee schedule here.
Binance.US is the US branch of Binance, one of the world’s largest cryptocurrency exchanges.
Binance.US offers tiered pricing based on trading volume and cryptocurrency pairs. Tier 0 listings reduce trading fees to zero, with no minimum trading volume or holding requirements. Bitcoin is on the Tier 0 list of tradable assets and can be traded for free.
Advantages
- Bitcoin can be bought and sold for free.
- low withdrawal fees
disadvantage
bisque
Purchase fee: 0.15%
Withdrawal/transfer fee: $0
Minimum purchase: 0.061 BTC
View the full fee schedule here.
Bisq is far from the centralized exchanges we’ve seen on this list. It embodies the ideals of cryptocurrency as it uses a peer-to-peer network to facilitate transactions. Think of it as buying cryptocurrency from places like eBay or Craigslist instead of Best Buy or Nike.
Because it is a decentralized exchange, it has one of the lowest fees on this list. Transaction fees will increase to 0.15%, but there will be no minimum withdrawal or transfer fees. However, you must have at least 0.061 Bitcoin in your account to cover transaction costs and deposits.
Advantages
- Decentralization and community focus results in the lowest fees on the list.
- strong security measures
- Users maintain a level of anonymity not found anywhere else.
disadvantage
- Bitcoin is required to initiate any transaction.
- Limited customer support
Kraken
Purchase fee: 0.16%
Withdrawal/transfer fee: 0.0002 BTC
Minimum purchase: 0.00001 BTC
View the full fee schedule here.
Kraken is a cryptocurrency exchange primarily for experienced traders, offering low fees for derivatives and high-volume traders.
Kraken offers tiered pricing for fees. If your trading volume is less than $50,000, fees start at 0.16% for makers and 0.26% for takers. However, trading fees for margin and futures are much lower, starting from 0.0200% for makers and 0.0500% for takers.
Advantages
- 100+ tradable tokens
- It offers much lower fees on margin and futures.
disadvantage
- Not available in New York or Washington.
- High fees for low trading volumes (less than $50,000)
coinbase
Purchase fee: 0.5%
Withdrawal/transfer fee: 1.0%
Minimum purchase: 0.0001 BTC
Coinbase Price and Fee Disclosure
Coinbase is the most popular cryptocurrency exchange in the US market. It’s easy to use and has great customer support. This is an essential factor for novice traders to consider when choosing an exchange.
Coinbase’s transaction fees start at 0.50%, and cash withdrawals are subject to a 1% fee. Hidden fees added to transactions are something to watch out for with Coinbase. These fees are not publicly disclosed. It can only be viewed during actual transactions.
According to the Coinbase Help Center, “You will be charged a fee when you buy, sell, or convert cryptocurrency on Coinbase. These fees are calculated when you place an order and may be affected by factors such as the payment method you select, order size, market conditions, jurisdiction, and other costs we incur to facilitate your transaction. You can view the fees in the transaction preview screen before submitting your transaction.”
Additionally, withdrawing cryptocurrency from the Coinbase platform will incur network transaction fees depending on network congestion and market conditions.
Advantages
- Low Minimum Funding Requirement
- easy to use
- Open to US investors
disadvantage
- Higher fees than most other exchanges
- Litigation with SEC.
gemini
Purchase fee: 1.49%
Withdrawal/transfer fees: Varies depending on network fees
Minimum purchase: 0.00001 BTC
View the full fee schedule here.
Gemini is a leading cryptocurrency exchange co-founded by brothers Tyler and Cameron Winklevoss. The exchange currently offers access to over 80 cryptocurrencies. We are one of the first companies to receive SOC 1 Type 2 and SOC 2 Type 2 certification, demonstrating our commitment to building a highly compliant cryptocurrency platform.
Advantages
- Available in all U.S. states
- strong security
- Trusted Exchange
disadvantage
- Gemini has the highest fees on this list. The exchange charges a 1.49% commission on purchases and additional cryptocurrency withdrawal/transfer fees.
Crypto.com
Purchase fee: 0.075%
Withdrawal/transfer fee: 0.0006 BTC
Minimum purchase: $1
View the full fee schedule here.
Crypto.com is a low-cost cryptocurrency exchange that aims to integrate cryptocurrency into everyday life through a cryptocurrency debit card that offers customers up to 5% cashback depending on the amount of cryptocurrency they hold.
Crypto.com offers reasonable purchase and withdrawal fees starting from 0.075% on purchases.
Advantages
- low fees
- Cryptocurrency cashback rewards through Visa cards
- Comprehensive application for cryptocurrency payment management
disadvantage
- Accessibility issues in the United States
- App can be overwhelming for new users
Cash App
Purchase fee: up to 3%
Withdrawal/transfer fee: $0
Minimum purchase: $1
View the full fee schedule here.
Unlike other cryptocurrency-focused options on this list, Cash App is a full-service banking option that allows users to accept debit cards, receive ACH transfers, and invest in traditional stock markets.
Although it is a complete banking solution, Cash App’s fees are often higher than other exchanges. When purchasing $200-$1000 of BTC, Cash App charges a transaction fee of 1.75%, the highest on this list.
Advantages
- Access to other banking features and existing stocks
- Free withdrawals.
- Excellent integration into everyday life
disadvantage
bitstamp
Purchase fee: 4%
Withdrawal/transfer fee: 0.0005 BTC
Minimum purchase: 0.0002 BTC
View the full fee schedule here.
Bitstamp is one of the oldest cryptocurrency exchanges on this list, serving customers since 2011.
Exchange fees for traders are reasonable, but the platform’s 4% fee for instant Bitcoin purchases is the highest we’ve seen. Bitstamp also charges 0.0005 BTC for withdrawals.
Advantages
- easy to use
- Reasonable withdrawal/transfer fees
disadvantage
- very high purchase fees
- Security Breach History
Other Considerations When Buying Bitcoin
Remember that low fees should not be your only consideration before using a particular exchange.
In addition to transaction costs, consider the platform’s security features, user interface, customer support, and reputation.
Security features play an important role in cutting-edge fields such as cryptocurrency. Two-factor authentication, cold storage, and leading encryption protocols ensure the safety of your tokens.
A clean and intuitive user interface makes it easy to execute trades and navigate the exchange. Bonus points for having a comprehensive mobile app that allows investors to access advanced trading tools without the need for a desktop platform.
Customer support is another important factor that affects the overall quality of your trading experience. Make sure the exchange you want has 24/7 customer support and appropriate support channels.
Lastly, consider the reputation of the exchange. Check for records of data breaches, security incidents, or compliance violations.
Investor Implications
Fees, no matter how small, quickly eat up your profits. Find a trustworthy exchange with low purchase and withdrawal fees. Exchanges that focus on keeping costs low can attract more users, which can lower fees even further over time in response to higher trading volumes.
When choosing where to buy Bitcoin, remember that fees are only part of the overall process. Always consider reliability, longevity, customer support, and security. And subscribe to the Bitcoin Market Journal newsletter to stay up-to-date on the best rates and fees every week.
