Initially regarded as a niche market by traders and investors, Bitcoin has become a popular asset class. To get involved in this burgeoning industry, you should use a cryptocurrency exchange for all trading. One excellent recommendation of an available platform is BIT-INDEXPRIME.COM, that aid in trading efficiently and making the most profits.
Trading cryptocurrencies is similar to trading stocks. However, you are limited to trading on cryptocurrency exchanges. Many Bitcoin exchanges charge fees in one of two ways: on a tiered scale based on your 30-day trading volume. Learn more about the costs you’ll incur when trading cryptocurrency so you can devise strategies to keep them from eroding your profits.
Considerations to Make When Choosing a Crypto Currency Exchange
There are some considerations that a trader should make when they consider selling and buying crypto on a crypto exchange platform.
A tiered “maker” and “taker” scheme is cryptocurrency exchanges’ most common fee schedule. It creates tiers according to the trading volume and charges maker and taker fees depending on your trading volume. A maker is a party that sells cryptocurrency to make a market on the exchange, and a taker is a party that buys it off the market. Each party pays transaction fees, but makers typically pay less.
Fee plans at cryptocurrency exchanges stimulate frequent trading in large amounts worth thousands of dollars. Fees frequently fall as a trader’s 30-day cumulative trade volume rises. Some crypto exchanges may still charge a per-transaction fee, but most have switched to a combination fee schedule.
As a result, small and infrequent trades at cryptocurrency exchanges are not cost-effective unless you want to buy a cryptocurrency. In that case, most crypto exchanges charge a spot trading fee to buy and hold a digital coin.
Many countries do not regulate cryptocurrency exchanges. In some of the world’s largest trading markets, most regulators have picked a hands-off approach to cryptocurrency regulation. On the other hand, cryptocurrency exchanges in the United States must register with the Financial Crimes Enforcement Network. And this means that crypto exchanges based in the United States are regulated and may not provide the same services as platforms found elsewhere. Therefore, before settling on a cryptocurrency exchange to trade your Bitcoins, consider its location and how convenient it is for you.
The majority of well-known cryptocurrency exchanges do not provide access to all coins. Some give only a few dozen, while others may provide hundreds. You might have to use multiple crypto exchanges to access the cryptocurrencies of interest. One popular coin among all cryptocurrency exchange platforms is Bitcoin. Bitcoin is the first crypto to be invented and traded, thus its popularity. You might not have a hard time finding it on an exchange platform because it is on most of them. The challenge would be finding an exchange where you spend the little funds to make the most out of your trading.
Since Bitcoin’s debut in 2009, Bitcoin trading and investing have grown in popularity. There are now hundreds of online exchanges where you can buy, sell, and trade virtual currencies.
Typical trading costs you will likely incur during trading include:
- Fund transfer fees to and from your bank account.
- Maker/taker fees.
- Set transaction fees.
- Tiered transaction fees based on trading volume.
These costs, however, may vary depending on the cryptocurrency exchange platform you use for Bitcoin trading. The trading amount may differ between exchange platforms. Research how various trading platforms function, the amount they charge for any trade, and settle for one with reasonable trading fees. Do not forget to check how legit and viable is the Bitcoin trading platform.