Hidden costs of currency and crypto exchange

Three types of fees

  • Spread (bid-ask gap): the difference between the buy and sell price offered by the platform. Often the highest and least visible cost.
  • Commission: a fixed percentage applied to the transaction amount.
  • Withdrawal fees: a fixed or variable amount to transfer your funds off the platform.

Hidden fee example

You convert 1,000 € on a platform advertising "0% commission". Market rate: 1 BTC = 50,000 €. Platform rate: 1 BTC = 50,750 €. The 1.5% spread actually costs you 15 € on this transaction.

Tips to reduce your fees

  • Always compare the applied rate to the mid-market (interbank) rate.
  • Use limit orders instead of market orders to control the price.
  • Batch your conversions: one large transaction costs less than several small ones.