Last summer I decided to actually track what I was paying to use crypto exchanges. Not just glance at trading fees, but write down every single cost for six months straight.
The number I ended up with was roughly four times higher than what I thought I was paying based on the advertised fee schedules. And talking to other people who’ve done similar tracking, my experience isn’t unusual.
What Shows Up in the Marketing
Exchanges advertise trading fees front and center. Coinbase: 0.6% for regular users. Binance: 0.1%. Kraken: 0.25%. These are real numbers, they’re just not the whole story.
Someone making a thousand dollar trade at point one percent pays a dollar in fees. Totally reasonable. Problem is, that’s usually the smallest cost you’re actually paying.
The Withdrawal Fee Reality
Here’s what I actually paid to withdraw crypto from various exchanges over my tracking period:
Bitcoin withdrawals: Between $18 and $28, depending on which exchange and when
Ethereum: $22 to $38
Stablecoins on Ethereum: $28 to $42
Various altcoins: All over the place, $8 to $50
These aren’t percentage fees – they’re flat amounts. Which means they hurt way more if you’re moving smaller sums.
I withdrew $800 of Bitcoin in August and paid $24. That’s three percent just to access my own money. Did that four times over the six months – nearly a hundred bucks in withdrawal fees for one asset.
Why This Got Worse
Checked my records from 2023 and withdrawal fees were noticeably lower back then. Bitcoin withdrawal used to run me maybe $12-15. Now it’s consistently over twenty.
Exchanges point to increased costs – regulations, security, network fees. And sure, some of that’s legitimate. But when network fees are five bucks and exchanges charge twenty-five, that markup is hard to justify as just “passing through costs.”
Spreads: The Thing Nobody Explains
Took me embarrassingly long to realize how much the spread was costing me.
When you buy crypto, you pay slightly above market price. When you sell, you get slightly below. That difference – the spread – is essentially a hidden fee.
On Bitcoin, spreads are usually pretty tight. Point one, point two percent maybe. But I was also trading some smaller altcoins where spreads hit one percent or higher.
Bought and sold the same coin in a test? Lost about 1.8% to the spread even though the “trading fee” was only 0.25%. The math works out – you’re paying the spread twice when you round-trip a position.
Some exchanges market “zero fee” trading. Yeah, because they’re making it back in the spread instead. You’re still paying, they just renamed it.
The Rebalancing Cost Problem
This is what really got expensive for me personally.
I rebalance monthly – sell what went up, buy what went down, maintain target percentages. Standard portfolio management stuff.
But every rebalancing cycle using an exchange goes like this:
My crypto starts in my wallet (I’m not keeping significant amounts on platforms). So first I deposit to the exchange – network fee, maybe $4-6. Wait for confirmations – ten, twenty minutes usually. Trade – trading fee plus spread. Then withdraw the new crypto – withdrawal fee of $20-35 depending what it is. Wait for the withdrawal to process.
One rebalancing trade ends up costing me thirty to forty bucks all-in, sometimes more. Do that monthly? I’m at three hundred to five hundred dollars a year just in deposit and withdrawal fees, not even counting the actual trading costs.
What I Found That Works Better
Started using Changeum.io for these monthly rebalances instead. The process is way simpler – send crypto from my wallet, receive different crypto back to my wallet. No deposit step, no withdrawal step. Just one swap.
Costs me about 0.75% plus the network fee to send. So on a thousand dollar rebalance, maybe eight or nine bucks total versus thirty-five or forty through an exchange.
Over a year of monthly rebalancing, that difference adds up to a few hundred dollars. Not life-changing money, but enough that it matters.
Time: The Cost Nobody Counts
Started tracking my time too, because why not be thorough.
Managing crypto across three different exchanges (which is what I was doing) ate up about four hours a month. Logging into platforms, checking balances, dealing with verification emails, moving things around, tracking it all for taxes.
Four hours doesn’t sound like much until you multiply it out. That’s forty-eight hours a year. Two full days spent on portfolio administration.
Put any value on your time – twenty bucks an hour, fifty, whatever – and that time cost dwarfs the fee costs.
My Actual Six-Month Numbers
Here’s what I paid from June through November last year, tracking everything:
Trading fees: $43
Withdrawal fees: $387
Network fees for deposits: $34
Estimated spread costs: $28
One wire transfer for a fiat deposit: $25
Total hard costs: $517
My average portfolio value during that period was about $18,000. So I paid 2.87% in six months, or roughly 5.7% annualized, in fees and costs.
The advertised trading fee I was supposedly paying? 0.25%.
Real cost was about twenty-three times the advertised rate.
Where It Hurt Most
Withdrawal fees were three quarters of my total costs. That $387 out of $517.
If I’d kept crypto on exchanges, I wouldn’t have paid withdrawal fees. But then I’m accepting custody risk – trusting platforms to hold my assets and give me access when I want it.
Given what happened with FTX, Celsius, and others, that trust feels misplaced. But the alternative is paying these withdrawal fees every time I want my crypto in my own custody.
That’s the trap. Keep it on platforms and accept custody risk, or maintain self-custody and pay heavy withdrawal fees. Neither option is great.
What Other People Are Paying
Talked to maybe a dozen other people who track their exchange costs carefully. Numbers vary a lot based on activity level and portfolio size, but some patterns emerged.
People with larger portfolios (fifty thousand plus) pay lower percentages because withdrawal fees are fixed amounts. Someone withdrawing ten thousand dollars paying twenty-five bucks is only paying 0.25%.
People with smaller portfolios get hit harder. Withdrawing five hundred dollars and paying twenty-five bucks? That’s five percent right there.
Active rebalancers pay way more than buy-and-holders. Makes sense – more transactions means more fees.
Everyone I talked to said their real costs were significantly higher than they initially thought. The range was anywhere from two to ten times the advertised trading fees, depending on behavior.
The Platform Response
To be fair, some exchanges have tried to address fee complaints.
A few reduced withdrawal fees on certain assets. Others offer fee discounts if you hold their platform token. Some have tiered structures where high-volume users pay less.
But overall trend is fees going up, not down. Every exchange I use has higher withdrawal fees now than two years ago.
Meanwhile, alternatives are emerging. Platforms like Changeum.io doing wallet-to-wallet swaps tend to charge in that 0.5% to 1.5% range all-in. When you compare that to total exchange costs including withdrawals, it’s often competitive or better.
What Actually Makes Sense
After tracking all this and thinking about it, here’s what I’ve landed on:
Exchanges make sense when you need specific features – margin trading, advanced order types, really obscure altcoin pairs. If you’re using those features, the costs might be worth it.
For basic stuff – holding crypto, occasional conversions, portfolio rebalancing – exchange total costs are pretty high compared to alternatives.
My current approach: One exchange account for buying crypto with dollars. That’s it. Everything else happens in my wallet. When I need to convert between cryptos, I use direct swap services.
Been doing this for about eight months now. My fee costs dropped by roughly sixty percent compared to the heavy exchange-use period.
If You Want to Track This Yourself
Honestly recommend doing what I did – actually write down every cost for a few months.
Track:
Trading fees (exchanges show these)
Withdrawal fees (easy to miss if you’re not looking)
Network fees you pay to deposit
Time spent managing across platforms
Any fiat deposit or withdrawal fees
Add it up at the end of three or six months. Compare to what you thought you were paying.
Bet you’ll be surprised. Most people are.
The Bigger Picture
This isn’t about exchanges being evil or anything dramatic. They provide services, those services cost money to operate, they charge fees to cover costs and make profit. That’s how businesses work.
But the gap between advertised costs and real costs is wide enough that it matters for investor returns.
Someone paying five percent annually in total exchange costs needs their portfolio to grow by five percent just to break even. That’s a real drag on returns over time.
Being aware of actual costs helps make better decisions about whether specific services are worth what you’re paying for them.
For me, tracking costs led to changing how I use exchanges pretty significantly. Might lead you to different conclusions based on your situation. But at least those conclusions would be based on actual numbers instead of marketing copy.
Numbers and experiences here are personal and for illustration. Your costs will vary based on platform choice, activity level, and portfolio size. This isn’t financial advice – just one person’s cost analysis.
