Coinbase, Binance, and Kraken are undoubtedly three of the most popular centralized exchanges among crypto users. Before using any of them, it is vital to compare various aspects, such as fees and asset offerings. This guide compares the fees charged by Binance, Kraken, and Coinbase to help you understand which exchange has low trading costs.
Types of Fees on Crypto Exchanges
Like other businesses, crypto exchanges must raise revenue to continue running. These trading platforms can generate income in multiple ways, including collecting fees. Here are the various types of fees charged by exchanges.
Trading fees
Traders incur trading fees when they place a buy or sell order on an exchange. These fees are classified into two: Taker and Maker. Exchanges charge a maker fee on traders who place a sell order. On the other hand, a maker fee is deducted from a transaction amount when a trader enters a buy position.
Naturally, maker fees are lower than taker fees.
Deposit and Withdrawal Fees
When moving your digital assets from your exchange account to a non-custodial wallet, you are likely to pay withdrawal fees, which vary from one trading platform to another. As for deposits, most exchanges allow users to fund their accounts with crypto for free.
Network/Gas Fees
While you may not incur deposit fees, you must pay network or gas fees to allow validators or miners to process your transaction. These fees change constantly depending on the level of network activity. If a particular network is congested, gas fees increase, and vice versa is true. Most exchanges give customers access to functionalities that optimize network fees, thus enabling their transactions to bypass network traffic.
Kraken Fees
If you want to become a Kraken user, these are the charges you may incur.
Instant Buy Fees
You will be charged a 3% flat fee if you buy crypto via the Instant Buy feature.
NFT Trading Fees
Besides cryptocurrencies, Kraken also supports the trading of NFTs on Solana, Polygon, and Ethereum. Each trade attracts a 2% fee. Note that NFT listing is free.
Withdrawal Fees
Kraken charges different withdrawal fees on each of the supported networks. For instance, the minimum withdrawal fee on the Bitcoin blockchain is 0.00028 BTC.
Users who wish to withdraw fiat to their bank accounts are charged a fee of up to 6%, depending on the withdrawal amount.
Spot/Futures Trading Fees
Kraken offers access to both futures and spot markets. A buy order in the spot market attracts a 0.16% maker fee, while a sell order is charged a 0.24% taker fee. Note that when you achieve $10 million in 30-day trading volume, the maker and taker fees reduce to zero and 0.10%, respectively.
If you want to trade futures contracts, expect a taker fee of 0.05% and a maker fee of 0.02%. The taker and maker fees reduce to 0.015% and 0.01% when your monthly trading volume crosses the $20 million mark.
Binance Fees
Binance is the biggest centralized exchange based on trading volume. But is its fee structure the best? Let’s find out.
Instant Buy Fees
Binance has an Instant Buy functionality like Kraken. This feature enables users to purchase their favorite cryptocurrencies using debit/credit cards. Binance charges a 3.70% processing fee.
Withdrawal Fees
Crypto withdrawals attract varying fees based on the network used. For example, Binance charges a minimum fee of 0.0005 BTC on withdrawals made via the Bitcoin network.
Spot/Futures Trading Fees
Futures traders on Binance pay 0.02% and 0.04% in maker and taker fees, respectively. Spot traders, on the other hand, are charged a 0.095% maker fee and 0.01% taker fee. Notably, paying these fees using Binance’s native token, BNB grants you a 25% discount.
Coinbase Fees
The leading crypto exchange in the US, Coinbase, charges the following fees.
Lightning Network Transaction Fees
Bitcoiners who want their transactions processed quickly can use the Lightning Network offered by Coinbase and pay a 0.1% fee.
Withdrawal Fees
Like the other two exchanges, Coinbase imposes varying fees on crypto withdrawals depending on the blockchain used. Regarding fiat transfers, the withdrawal fee starts from $1.
Trading Fees
The taker fee on Coinbase ranges between 0.06% and 0.65%, while the maker fee starts from zero to 0.45%.
