A typical crypto exchange cost is between 0.1% and 1% or more for every transaction, although this may vary widely. If you invest $1,000 or more in crypto, the transaction costs may range from $100 to $1,000 on average.
Here are five ways traders and investors may save money while sending cryptos.
Tip 1. Lightning to the rescue
On-chain BTC transaction costs and Lightning transaction fees are just a cent apart. As developers have predicted, transaction costs may rise as more people use BTC. Hence, the Lightning network is a network built on BTC that can handle more transactions while lowering congestion. Customers who plan to make several purchases in the future may wish to investigate this long-term option.
You’ll have to spend money if you use Lightning to start a channel. Clients will no longer be able to send as many transactions at the same fee once their first few are free.
To top it all off, Lightning is still a work in progress. As technology has improved, customers still have to worry about being bankrupt. So you shouldn’t invest all of your savings into it.
Tip 2. Storing crypto in a custodial wallet
A custodial wallet could be considered the default option for crypto storage. A third party holds your crypto for you through cold storage, hot storage, or a combination.
When you buy coins from crypto exchanges, apps, or stockbrokers, they typically put them in a custodial wallet they control. You can transfer it to your own hot or cold wallet if you want to store it yourself.
Many investors use custodial wallets with no issues, and there are advantages to this type of wallet:
- It requires the least amount of work on the user’s part.
- Since your crypto is stored in your account, it’s easy to access if you want to trade it.
- You don’t need to worry about losing a crypto wallet. As long as you can access your account, you can access your crypto.
Tip 3. Choose a less crowded moment on the blockchain
For example, fewer transactions occur since many establishments are closed on weekends. In addition, it means transactions may occur more rapidly. Wait for your transaction to clear for a lower cost before you proceed. For most customers, a BTC transaction will not cost them more than $25.
According to bitcoinfees.earn, the quickest transaction fee is about 102 satoshis/byte. So, it would cost about $11 to make a 224-byte BTC transaction. Using this service costs about $93 (about $9) per byte, taking about 30 minutes. If you’re willing to wait, the price will continue to drop.
You need a crypto wallet to set your transaction fees for this approach to work. Before you use your wallet, make sure you understand whether or not you can customize the fees. However, keep in mind that this strategy comes with a degree of risk. A charge that is too low may cause a failed transaction. If you’re concerned about the price of a BTC transaction, you can view how much it’s presently costing at mempool.space. High-priority transactions incur a higher cost. Transactions will proceed more swiftly as a consequence of the increased priority pricing. Choose a more negligible cost and add it later if necessary if you’re not in a hurry.
If the fee is high enough, it is also possible to determine how much the BTC network would disregard a transaction with the “purging” header. Make your cost “replaceable” by selecting “Replace-By-Charge” in your wallet.
RBF is an option if you’re unsure whether the cost is high enough but don’t want to spend too much. Once a BTC transaction has been submitted, you may use this function to increase the transaction fee if the transaction has not yet finished. Only a few wallets, such as Blockstream Green and Electrum, allow you to do so.
Tip 4. Best crypto bonuses
Sign-up bonuses and other promotional offers from crypto exchanges reduce the effect of fees on your account balance.
- For signing up with Coinbase or referring a friend, you’ll earn $10 in BTC.
- Get a $10 BTC bonus when you trade $100 within 30 days of Gemini account opening.
- New users who join will get a $50 sign-up bonus when they use referral code M778EfIsF on Hodlnaut.
- A $25 bonus is yours when you successfully recommend a friend to Voyager.
- A $50 bonus is yours when you successfully recommend a friend to Celsius.
- A $50 bonus is yours at eToro.
- New users who open a free Okcoin account will receive a $50 BTC bonus when they buy $100 or more in crypto within 30 days of account sign-up.
- Maintain a $100 or more balance in your BlockFi account to get BTC incentives.
Tip 5. Be strategic about your transaction types
Is it possible to sell your Bitcoins without needing fiat currency? By exchanging it for another crypto, you may be able to exit your BTC investment with minor charges. However, there may be fees associated with deposits into your digital wallet, and there may also be fees when converting from BTC to fiat money.
To summarize how to safely store crypto, start by choosing one or more crypto wallets. We recommend picking up a hardware wallet for most of your crypto holdings and downloading a hot wallet for crypto for easy access. Send your crypto to your wallets, record your recovery phrases, and keep those phrases safe.