Newbie Question: Fees for Long-Term BitCoin Investment

[CricketUser]

Hey everyone. I've been thinking for a long time of buying BitCoin as along term investment to diversify a bit. Been reading a lot the last couple of days and I'm kind of surprised at the fees. I'm used to Ameritrade type fees where it's a flat rate for a transaction.

Do I have this correct? If I put in $10,000 through Coinbase or Paypal or similar platforms I am charged 1.5-2% immediately. That's $200, which is pretty steep. Is everyone surrendering 1.5%-2% with every trade? If so, I should invest in Coinbase instead of BitCoin. Maybe I'm missing something.

For longer term holding is RobinHood the way to go or do their raised prices and spreads make it a worse alternative?

Any input would be appreciated to help a Newbie understand the fee structure. Thanks in advance!

[GeorgeJohn]

If actually you want to invest in Bitcoin, just go directly to invest instead of making complications issues, bitcoin investment is cordial and quiet understanding for it's speculation, i believe that bitcoin is the best cryptocurrency investment to start up with, it's not that I'm condemning the fact that Coinbase is bad to invest on, but Bitcoin is the best because it status of appreciation.

[jackg]

Crypto based stocks are going to suffer when compared to the actual asset - coinbase is more likely to go bankrupt than bitcoin for example.

Coinbase.com is the slick exchange to buy crypto instantly - you're paying the high fee for the "ease of use".

https://pro.coinbase.com/fees - coinbase pro is a lot cheaper and can normally be accessed once you're verified on a normal coinbase account ( fees should be around 0.4-0.6% for a fiat deposit).

As an additional note, crypto.com seem to charge 0.4% fees and sometimes offer fee free experiences for new sign ups (I think it depends on your jurisdiction but it might be worth looking at).

[CricketUser]

JackG, thanks for the input. I'll check those two options out.

I was joking a bit when I said that Coinbase might be a good investment, but I am surprised that the transaction fees are so high on most of these platforms. I 100% want to buy BitCoin, just trying to understand the entry fees.

I'll check out Coinbase Pro and also look at Crypto.com.

[odolvlobo]

... If I put in $10,000 through Coinbase or Paypal or similar platforms I am charged 1.5-2% immediately.
... For longer term holding is RobinHood the way to go or do their raised prices and spreads make it a worse alternative?

When you buy bitcoins from an exchange or service, you pay more for the convenience. If you want pay lower fees, then you can buy bitcoins on the market through an exchange instead.

Do not buy bitcoins from a seller or exchange that doesn't give you the option to withdraw them to your own wallet.

[Marvelman]

Is everyone surrendering 1.5%-2% with every trade?

No. People don't usually pay such high fees with every trade. You just have to find the best option according to your jurisdiction and payment options. It takes research and patience, but it's definitely possible.

[24Kt]

... If I put in $10,000 through Coinbase or Paypal or similar platforms I am charged 1.5-2% immediately.
... For longer term holding is RobinHood the way to go or do their raised prices and spreads make it a worse alternative?

When you buy bitcoins from an exchange or service, you pay more for the convenience. If you want pay lower fees, then you can buy bitcoins on the market through an exchange instead.

Do not buy bitcoins from a seller or exchange that doesn't give you the option to withdraw them to your own wallet.

The fees depend on the trading platform you are dealing with so yes, better compare it first before spending large amount in fees alone. Maybe, try the P2P in binance since you are dealing with fiat to buy crypto. Don't know how much your service provider will charge if you deposit fiat. But once you got a hold of your BTC, better transfer it to your own wallet and don't let it stay long in any trading platform.

[hatshepsut93]

There's a ton of ways to buy Bitcoin - exchanges, p2p trading, Bitcoin ATM, personal meeting, DEX, automated exchange services, chat bots. They all have different fees, ranging from zero to single-digit percentages. Also keep in mind the risks of scams - they are low with more reputable exchanges and high with less obscure ones or some forms of p2p trading.

[sheenshane]

For the low fees crypto exchange from fiat to crypto might be these.

• Coinbase
• Binance
• Crypto.com

But as they said, it depends on your jurisdiction because all of these are required KYC verification.

For longer term holding is RobinHood the way to go or do their raised prices and spreads make it a worse alternative?

Remember always this golden rule in crypto, "Not your keys, not your coin" it's better to transfer it to a hardware wallet if you want for the long-term holding.

[Apocollapse]

AFAIK currently FTX is the most cheap fees among all centralized exchange, the fiat deposit fee will depends on the bank you used and they offer free fiat withdrawal for above $5000. It's only for anyone who doesn't really care with KYC since you must complete KYC in this exchange.

Don't hold your coins on exchange, spend another $50-$100 to buy a hardware wallet.

All fiat withdrawals over $5000 USD in value are free!*

[tranthidung]

Remember always this golden rule in crypto, "Not your keys, not your coin" it's better to transfer it to a hardware wallet if you want for the long-term holding.

• https://notyourkeys.org/. With centralized exchanges, you don't own your keys, in most cases.
• Hardware wallet is perfect but if people can not manage to buy one hardware wallet, they can use an alternative like Electrum wallet. Make sure always back up wallet and know how to recover it.
  
  • [GUIDE] How to Safely Download and Verify Electrum
  • Regarding to downloading, installing and using wallets, "Don't trust, verify"

[Mpamaegbu]

For the low fees crypto exchange from fiat to crypto might be these.

• Coinbase
• Binance
• Crypto.com

I don't know your parameters for judging them so, anyway. For me, I can't remember the last time I did a BTC withdrawal from Binance because the commission is crazy when pegged in dollar. It's cheap for me to swap my BTC on Binance to a stable coin like BUSD or USDT and then withdraw with as low as $1 fee. I can't be paying 0.0005 ($15 at current rate) for something that will be $0.5 if I withdrew in BUSD. I still can't figure out why Binance has refused to adjust its withdrawal commission on BTC.

[jaberwock]

There's a ton of ways to buy Bitcoin - exchanges, p2p trading, Bitcoin ATM, personal meeting, DEX, automated exchange services, chat bots. They all have different fees, ranging from zero to single-digit percentages. Also keep in mind the risks of scams - they are low with more reputable exchanges and high with less obscure ones or some forms of p2p trading.

The goal is to find a platform which has a less fess but some on your list has known to have a high fees like bitcoin atm and exchanges. When you say exchanges I believe it means centralized exchanges because you also have dex or decentralized exchange in your list and we all know that most centralized exchange charge a high fee.

Some in your list are also risky like chat bots, I supposed this can be found on telegram? Since, telegram is more crypto oriented right now but this platform is becoming a den of scammers lately. P2p is also risky but we are more sure in personal meeting because that is face to face. The low the fee the riskier it was. Are we really sure that we can sacrifice our security only to save fees?

[Findingnemo]

You also have to oay brokerage fee while buying stocks as well right the rates depends on your country and which brokerage you choose to for trading your stocks, while the fees are same for every individual while trading on an exchange this isn't wrong paying but there is no compulsion that you have to buy from the exchanges only, you can even buy from someone personally with zero trading fee and paying only the transaction fee.

[buwaytress]

Welcome to trading then. You'll find the same for forex or commodities -- if they don't charge you a percentage fee, then they hide the fees from commissions in the spread. Lots of other exchanges do this, Bitpanda is one I can name rightaway. No commissions, no fees for swapping or withdrawals, but their spread's awful. You find the same with remittances. If they don't have a fee, their rate is poor. Simple as that.

Try buying your Bitcoin p2p instead.

[KingsDen]

For the low fees crypto exchange from fiat to crypto might be these.

• Coinbase
• Binance
• Crypto.com

I don't know your parameters for judging them so, anyway. For me, I can't remember the last time I did a BTC withdrawal from Binance because the commission is crazy when pegged in dollar. It's cheap for me to swap my BTC on Binance to a stable coin like BUSD or USDT and then withdraw with as low as $1 fee. I can't be paying 0.0005 ($15 at current rate) for something that will be $0.5 if I withdrew in BUSD. I still can't figure out why Binance has refused to adjust its withdrawal commission on BTC.

In anyway one tries to get his money out from binance he will be paying. A better option could be p2p if you are ready to compromise your identity.
When you convert from Btc to Usdt, you are first charged a conversion fee. Then if you withdraw with Usdt, you are also charged. Though not as high as bitcoin withdraw fee. What they are technically doing is pushing traders to BTC/BUSD pair to strengthen even their stable coin.

Also keep in mind the risks of scams - they are low with more reputable exchanges and high with less obscure ones or some forms of p2p trading.

Some forms of p2p trading involves scam, especially when there is a price offer above what the current market is saying. It's suspicious and doesn't always end well.

[PrivacyG]

Everything else mentioned above aside, since you mention your investment is long term here is my take.  If you have a holding of $10,000 worth of Bitcoin, you will not even notice this $200 fee.  It happens all the time that no matter what sum I choose to invest, it declines or increases in value by at LEAST 5 to 20 percent per day, sometimes even per hour.

In consequence, I learned to simply not care as much about fees anymore.  In fact, whenever I tried my best to look for a cheaper alternative, something worse happened.  Account locked until KYC is completed.  Money frozen for 'suspicious' activity.  Trying to avoid an x% fee but before I get to the best option the market moves like crazy by more than the % I tried to avoid.  You should care about not spending on excessive fees but sometimes it is what it is and with Cryptocurrencies you sometimes can just not avoid it.  Wait until you decide to invest in random Altcoins and find out that during intense times of transaction volume Ethereum will ask hundreds for a basic transaction of a Token.

Of course.  Not your keys, not your coins.  Try using less centralized, or even better, decentralized exchanges or Peer to Peer to purchase Bitcoin.  Never store your coins in custodial wallets.  These rules always apply for me and should always apply to everyone, maybe except active traders.

-
Regards,
PrivacyG

[dlightag]

Since your buy Bitcoin for a long term holding, don't let the trading fees to stop not buying Bitcoin from Coinbase or paypal, as you mention, in other words, Binance Exchange (p2p) charge less amount fees to buy bitcoin base on your location for verification, and I learn my Big lesson on Shiba Inu. At late 2020 and i saw shiba Inu Price at $0.00000000006 and because of Ethereum gas fees make me not to buy Shiba Inu and shiba reach $0.00008, and that is my latest regret while buying of coin don't need to look gas fee, Buy Bitcoin and Hold.