Understanding crypto fees

Crypto fees are unusually opaque, and the largest one is usually invisible. Here is the complete picture.

1. Exchange commission

The advertised trading fee, typically a percentage of the trade. Many platforms use a maker/taker model: adding liquidity with a limit order that rests on the book (maker) costs less than taking existing liquidity immediately (taker). Simply using a limit order can therefore reduce this fee.

2. The spread — usually the biggest

The spread is the gap between the best buy price and best sell price. Buy and immediately sell, and you lose that difference before any commission.

This is how “commission-free” platforms make money. A 2% spread on a purchase costs you 2%, whatever the advertised commission says. It is a real cost that simply is not itemised.

How to measure it: look at the buy and sell prices for the same asset at the same moment. That gap is your round-trip cost.

3. Deposit fees

Bank transfer is usually cheap or free but slower. Card deposits are instant and typically cost several percent — a meaningful bite out of a small first purchase. If you are not in a hurry, the bank transfer is almost always the better choice.

Watch for currency conversion too: depositing in one currency to trade in another can incur an exchange margin well above the interbank rate.

4. Withdrawal fees

Charged when moving crypto off the platform. Some exchanges pass through the actual network cost; others charge a fixed amount well above it and keep the difference. This is worth checking before you choose a platform, because it applies every time you self-custody.

5. Network fees

Paid to the blockchain itself, not to any company. Two properties surprise people:

They do not depend on the amount. Sending £10 and £10,000 can cost the same, because the fee prices block space, not value. This makes small transfers disproportionately expensive.

They vary with congestion. On Ethereum, gas is an auction: when demand is high, fees rise sharply within minutes. The same transaction can cost pennies or a great deal more depending on when you send it.

A third point that catches people out: a failed transaction still costs gas. The network did the work before the failure, so you can pay and receive nothing — for instance when a swap reverts because of slippage.

6. Costs that are not fees

• Slippage. Getting a worse price than quoted because your order moved the market. Real money, no line item.
• Conversion margins. The rate applied when your currency is converted.
• Tax events. In many jurisdictions each disposal is taxable — see how crypto is taxed.

Reducing what you pay

• Use bank transfer rather than card for deposits.
• Use limit orders where available — better price control and often a lower fee tier.
• Batch withdrawals rather than moving small amounts repeatedly.
• Check network conditions before transferring; fees fall considerably at quieter times.
• Compare platforms on round-trip cost, not advertised commission.

What to read next

Next: market orders vs limit orders.