Vince Lombardi once said that American football is a “game of inches.” Over the course of a game, an inch here and an inch there add up to valuable yards that can determine whether you win or lose.
It’s a volatile game, and the team that best manages the unpredictable situations wins. An inch here and there often determines who wins.
Cryptocurrency trading works the same way. Crypto is volatile, as seen by the wild swings in Bitcoin prices over the past month. You may wake up on Monday and see experts debating how high it will go...and then on Friday, those same people will debate how low it will drop.
Trading crypto, like football, is a game of inches. Small gains create big results in the long term, but there’s a catch: you have to understand the fee structures of the sites you do business on before you start to invest. Most fees don’t seem bad, but they can have a serious impact on your profit.
Two of the most used exchanges are Coinbase Pro and Binance. While both offer great service, we’re going to look at Coinbase vs. Binance fees and give you our recommendation on which one you should use if you're looking for long-term profits.
Coinbase Buying / Deposit Fees
Coinbase charges a spread of around 0.50% for each purchase you make, although this percentage can change depending on market fluctuations. They’ll confirm the price of the transaction fee before you complete your purchase.
They also charge a Coinbase fee, which is the GREATER of either:
- The minimum flat fee
- The variable fee
This amount will vary based on the method of purchase and your location. For anything over $200, the variable fee will always be higher.
If you’re in the U.S., the flat fee is:
|Up to $10||$0.99|
For anything over $200, the variable fee will always be higher.
Then, there are the deposit fees. In the U.S, ACH transfers are free. If you use a U.S. bank account or the Coinbase wallet, you’ll pay 1.49%. A wire transfer costs a $10 flat fee and using a debit card costs 3.99%. Debit cards are the most expensive option, but the funds become available immediately.
For example, if you buy $300 in Bitcoin using a debit card, you’ll actually receive $288.49 (The 3.99% plus the spread). Over time, these fees add up.
How Much Does it Cost to Buy Or Transfer Coins With Binance
You can deposit funds on Binance for free using an ACH or wire transfer. You can also use your debit card, but you’ll pay a 4.5% deposit fee.
This seems like a lot, but there are a few options you can use to get around these fees.
The good news is that once you buy coins on Coinbase, Binance won’t charge you a fee when you transfer them to their exchange. Also, there are no limits on the number of coins you can deposit into your Bitcoin account.
Basically, you have a couple of options. If you find a cheaper debit card fee, you can buy coins using that option and then transfer those coins into your Binance wallet. You can also use an ACH or wire transfer to buy coins for free.
Coinbase Trading Fees
Coinbase is one of the most popular exchanges, and for good reason. Its interface is very user friendly, particularly for new traders.
The problem that many people have with Coinbase is that while their interface is easy to understand, their terms and conditions and fees aren’t.
Whether you are a buyer or seller, there’s a fee for everything you do in the exchange.
Coinbase uses the maker/taker fee structure and determines what you pay based on your volume over the past 30 days. Basically, the more you trade over the course of a month, the less you pay in fees. This is great for established traders, but for new traders or those that want to explore crypto trading, it can be a drag.
In the chart below, you’ll notice that there are taker and maker fees.
For example, let’s say that you post an order at market price. If that order happens immediately, you’re the taker and will pay that fee.
If your order isn’t immediately matched, it goes into the order book. From there, if someone else matches your order, you’re the maker. Sometimes, this means you’ll pay a lower fee. Note that this only occurs if you trade over 50 million USD over the course of 30 days.
|Price Tier (Volume / 30 Days)||Taker Fee||Maker Fee|
|Up to 10k||0.50%||0.50%|
|Over 1 Billion||0.04%||0.0%|
When you look at this chart, a few things stand out. First, the fees go down the more you spend, which encourages high-volume trading. The more you spend, the less you pay, so ideally you’ll reach the higher limits. The problem, however, is that most people aren’t going to get to the 50 million mark.
Keep that 50 million mark in mind when we talk about Binance’s fees.
Understanding Binance Trading Fees
There are a few advantages to using Binance over Coinbase regarding fees.
For Binance, you’ll pay .1% for both maker and taker fees. That fee drops to .02% for makers and .04% for takers when exchanging futures. You also get a 25% discount when using BNB, which is Binance’s crypto token.
This means two things. First, you’ll save A LOT of money, whether you’re a new trader just wading into the waters or a high volume trader. Remember earlier when we said to keep the 50 million dollar mark in mind?
You’d have to trade over 50 million in 30 days on Coinbase to reach the tier that allows you to pay Binance-level fees. Considering that most people don’t trade that much, chances are you’d be better off trading on Binance.
Of course, if you are a Bitcoin billionaire, you may better off trading with Coinbase…after throwing me a few coins, of course. 😂
Binance also has the advantage of keeping things simple.
You can trade more coins with Binance for less money, increasing your profit margin substantially.
Binance Coin aka BNB
Earlier, we mentioned that you get a pretty substantial discount when you use the Binance Coin, BNB.
BNB is based on the Ethereum blockchain, meaning that it follows the same technical guidelines of the popular ETH.
By buying these coins and using them for trading, you can cut your costs, which will allow you to see some serious long-term gains. The best part about these coins is that they offer you discounted trading, and in the future, they’ll gain value!
There’s a trading supply of 200 million coins, and once those coins are gone, they’ll stop making more. They’ll become more valuable over time because of their limited availability and practical use.
Over the past two months, the value of BNB has grown from $28 to $45 (as of Jan. 18, 2021), making it an excellent investment long-term.
Even Without Considering the Difference in Fees, Binance is the Best Trading Platform
When looking at Coinbase vs. Binance fees, it’s clear that Binance is the better platform. They have lower fees that are easier to understand, so you’ll make more money over time.
Even if you take the fees out of the equation, Binance is still a better platform for both new and experienced crypto traders.
Binance offers more coins on their platforms, allowing you access to more opportunities to make money. You’ll also have the option of selecting between two interfaces: beginner and advanced.
The advanced interface has tools that allow you to do technical analysis and make more informed decisions that go beyond historical trends. It also has three levels of identity verification. Each level comes with a higher withdrawal limit.
Even if Binance adopted Coinbase’s fees tomorrow, I’d still recommend that you sign up for Binance. Luckily for you, you can have all the advanced features of Binance while also saving money on fees!
Also, please do make sure to get a secure hardware wallet to store your cryptocurrency off exchanges when you’re holding mid or long-term. I recommend the Ledger Nano X since it’s so easy to use and very safe, but here’s a massive guide about the best crypto wallets I just wrote: Best Cryptocurrency Wallets
If you’re already holding coins, I suggest learning about BlockFi & Celsius to earn interest on your coins like me.
Lastly, if you don’t like Binance, check out this article comparing Gemini vs. Binance.
If you have any questions or scenarios you’d like to run by me, just leave a comment below and I’ll personally reply back.