Trading in cryptocurrency is becoming more popular as more and more people and corporations have started trading in this form of currency. Bitcoin is currently one of the largest cryptocurrencies in the world and many people have started trading in it.
Just like normal bank transactions Bitcoin transactions can also attract some transaction fees. This is why it is important for traders to be aware of such charges. To be thorough with Bitcoin trading and get the latest information about Bitcoin and cryptocurrency in general, such traders can visit websites like https://www.bitcoinsmarter.de.
Besides this there are certain things that every trader who trades in Bitcoin should know about the transaction fee, they are:
1. They are lesser than banking fees
Bitcoin is a cryptocurrency so it is natural that it does not have as many middlemen controlling the system as compared to the banking system. This means that one does not need to pay high transaction fees just to send their Bitcoin from one place to another.
Whereas normal banking transaction fees can be pretty high as compared to the transaction fee of Bitcoin as there are many middlemen involved in such a system. This is another reason why trading in cryptocurrencies like Bitcoin is preferred by many over trading via Bank transfers in this day and age.
2. They can range from 0.1% to 1% of the transaction amount
Different mediums can demand different transaction fees from the user. As for cryptocurrencies like Bitcoin and others the transaction fees can range from a meager 0.1% to a solid 1%of the total amount being transferred.
Although this transaction fee might not seem much, especially when compared to the transaction fees taken by the banks, with eventual and regular trading, such charges can add up to become a significant amount of Bitcoin currency.
As a trader who works with tendering the currency from one account to the other on a regular basis, it is important to focus not only on the money made but also on the money invested. Hence, by adding up the transaction fee one should be able to get a significant sum of the total amount invested, and hence such charges should be taken a note of, for keeping a track of one’s Bitcoin earnings as a trader.
3. There are different types of fees
Although one might feel that the transaction fee is the only amount that is forgone during Bitcoin trading, that is not always the case. Besides the regular fee charged on transferring money from one account to another, there are other fees and taxes that can be levied when one decides to trade in such currency. A trader should be aware of such fees too. Some of the other commonly charged fees are:
Charges on transferring Bitcoin from exchange wallet to personal wallet.
If one has obtained some Bitcoins via a crypto exchange, the amount obtained is usually situated in a different wallet than the user’s personal wallet. That wallet is also referred to as an exchange wallet. A trader can choose to transfer this currency from the exchange wallet to the personal wallet to ensure that the currencies obtained remain secure. This also has another benefit of price arbitrage for the trading party.
Charges on transferring Bitcoin from exchange wallet to bank account
Besides transferring currency from one’s exchange wallet to one’s personal wallet, one might also choose to directly transfer the currency obtained from the exchange to one’s bank account. This is usually done when one wants to cash out the amount to secure the currency value.
Although traders do not usually do this it is important for them to know that such a transfer also attracts some money charges usually higher than a wallet-to-wallet transaction. Such charges are also referred to as UPI or NEFT charges taken by the bank when one transfers their crypto like Bitcoin to one’s bank account.
Gas or network fees
Besides fees needed for trading, fees are also required for mining of cryptocurrencies like Bitcoin. Crypto mining is still a resource and energy-consuming procedure and hence extra charges can be taken to cover up for the fuel and electricity when one decides to get a new Bitcoin mined. Such a fee is referred to as either gas fees or network fees.
It is one of the highest charges involved in crypto-trading and has only been rising with the rising popularity and widespread use of the crypto.
Although usually not taken cognizance of by the traders, there also exists charges that are to be taken when someone transfers their fiat currency from their respective bank accounts to their respective crypto wallets. This is the first step of entering the world of cryptocurrency and Bitcoin trading and hence is one of the first charges that one has to pay for starting their trading journey in Crypto like Bitcoin.
Such deposit charges can vary according to the laws of different countries. For countries that have less restrictive laws with regard to Crypto trading, the deposit charges can be considerably low as compared to the countries that have more restrictions on Bitcoin trading.
Moreover, these charges can also vary from platform to platform. Some websites or applications used for crypto trading can charge higher than others. Hence one should do thorough market research before taking up such trading.
While trading in cryptocurrencies like Bitcoin it is important for traders to keep a check on both the cost as well as the earnings made. Transaction fees are a part of the cost that a trader has to incur so that he can get better benefits in the future.
But before trading one should have a good idea about the different kinds of charges related to the transfer of Bitcoin and how such charges can vary from place to place. Involving in market research before diving into such trading is a good option to maximize the benefits.