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Anyone who’s been around a while should already know this little secret, this tip is not intended for you, it’s intended for the un-initiated who are unknowingly being ripped off on fees. When I say ripped off it’s pretty substantial so maybe there ARE some veterans out there that are falling victim to this as well. Let me know if you learned anything in the comments.
The Problem
Everyone knows Coinbase, it’s the easiest, most well known, most advertised and also the most expensive on/off ramp for crypto. Key words being MOST EXPENSIVE. Take a few minutes and have a look here at the fee disclosure you probably never read when you created your account:
“Coinbase may charge fees when you buy, sell, or convert cryptocurrencies. Fees are calculated at the time you place your order and may be determined by a combination of factors including the selected payment method, the size of the order, and market conditions such as volatility and liquidity. The applicable fees will be listed in the trade preview screen which will be surfaced before you submit your transaction, and may differ for similar transactions.
Additionally, COINBASE includes a spread in the price when you use simple Trade to buy or sell cryptocurrencies, as well as in the exchange rate when you convert cryptocurrencies. This allows us to temporarily lock in a price for trade execution while you review the transaction details prior to submitting your transaction. When using Advanced Trade, no spread is included because you are interacting directly with the order book.”
So what does this add up to? let’s take a look.
Today is February 24th at approx 11:00 am EST
the current price of BTC is $35,930 USD.
If I try to place a buy order for .01 BTC (roughly $359.30)
I would pay a fee of $13.81 netting me $346.19 in BTC.
This comes out to be around 3.84% As the transaction fee. That doesn’t sound TOO bad does it?
Ok, there’s a fee, so what, every exchange has a fee. That’s true, however Coinbase themselves also operate a traditional exchange known as either Coinbase Pro or GDAX (Global Digital Asset Exchange) depending on how long you have been around.
The solution
Now for the tricky bit. Anyone that has opened a Coinbase account also has a Coinbase pro account and vise versa. The two are linked to the exact same account information you provided when signing up. So how does this help you may ask? Well, Coinbase allows you to transfer your assets seamlessly between the two accounts with no fee and no wait, it’s instant. Ok so, let’s take a look at the fees on the exact same trade over there…
BTC @ 36,147.57
Buy order of 0.01 BTC
Fee $1.80
For a total of $363.28 in BTC
This comes out to be a whopping 0.5%
By simply clicking a few extra buttons you save yourself 3.3% in transaction fees. That’s insane. If you happen to follow the “make this a weekly buy” suggestion on Coinbase this adds up extremely fast. Potentially hundreds of dollars per year from each individual participating.
Put simply, link your bank account, not your credit/debit card, transfer your cash to Coinbase with an ACH, there’s no fee for that. Take the cash and send it over to Coinbase pro, again no fee, buy the crypto you want with a LIMIT order, not market, you can get an even lower fee by being a maker instead of a taker. Once done you can do whatever you intend to do with your crypto, transfer it to a wallet, go buy some Axies, whatever it may be. Just stop paying painfully high transaction fees!!!!!
This is NOT financial advice, I am NOT a financial advisor. This is not an endorsement of any particular brand, product, platform or asset. Do your own due diligence before making any investment decisions.
