How to Pay Less for Your Crypto

How to Save Money When Buying Crypto

If you’re not careful, buying crypto can be costly. 

When you factor in taxes, conversion rates, and price swings, the costs involved can quickly mount up. 

With the correct techniques, though, you may save expenses and obtain more crypto for your money. 

Use the useful advice in this guide to learn how  you can pay less for your crypto regardless of your level of knowledge in investing.

1. Choose the Right Exchange

All cryptocurrency exchanges are different. 

The amount of fees charged can vary signifciantly, so it’s worth shopping around to find the cheapest option. 

Here’s what you should look for when choosing an exchange. 

• Low Trading Fees: Some exchanges charge lower fees than others. For example, Binance offers trading fees as low as 0.1%, while Coinbase Pro charges 0.5% per trade 1 www.binance.com https://www.binance.com/en/fee/schedule .
• Discounts for High Volume: Some platforms, like Kraken, offer reduced fees for high-volume traders. 2 www.kraken.com https://www.kraken.com/features/fee-schedule
• No Hidden Costs: Watch out for hidden fees like deposit or withdrawal charges. Always read the fine print before signing up.

It’s also a good idea to consider the types of crypto available at each exchange, as the offerings are sometimes different.

2. Use Limit Orders

Limit orders are an excellent way to buy cryptocurrency at a value lower than the current market price. 

Here’s how limit orders work and can be used to save you money: 

• How Limit Orders Work: You specify the price you’re willing to pay, and the order executes only if the market reaches that price. This can help you avoid overpaying during price spikes.
• Example: If Bitcoin is trading at $100,000, but you want to buy at $99,500, set a limit order. If the price drops to $99,500, your order will automatically execute.

Most major exchanges, like Binance and Coinbase Pro, support limit orders. 3 www.coinbase.com https://www.coinbase.com/learn/tips-and-tutorials/how-to-use-limit-orders

Using limit orders can often help with finding the best time to buy cryptocurrencies.

3. Avoid Credit Card Purchases

While it’s convenient to use a credit card to buy crypto, it’s not the most cost effective way. 

Credit card purchases often come with high transaction fees.

Below is why it’s not recommended to use a credit card to buy crypto if you want to save money:

• High Fees: Credit card purchases typically incur fees of 3-5%. For example, Coinbase charges a 3.49% fee for credit card transactions. 4 help.coinbase.com https://help.coinbase.com/en/coinbase/trading-and-funding/pricing-and-fees/fees
• Better Alternatives: Use bank transfers or debit cards instead. Bank transfers usually have lower fees, and some exchanges even offer fee-free deposits.

4. Take Advantage of Fee Discounts

Lots of cryptocurrency exchanges offer ways you can reduce fees, such as holding native tokens or staking. 

Here are some common strategies:

• Hold Exchange Tokens: Some platforms, like Binance, offer fee discounts if you hold their native tokens. For example, holding Binance Coin (BNB) can reduce your trading fees by up to 25%. 5 www.binance.com https://www.binance.com/en/support/faq/115000429332
• Stake Crypto: Staking is another way you can save money. Some platforms like Kraken give users discounts for staking native tokens. 6 www.kraken.com https://www.kraken.com/features/staking

5. Buy During Market Dips

This option is a top way to save money when buying crypto, but isn’t as easy as it seems. 

Thanks to the volatility in the cryptocurrency market, dips often take place. Buying when prices drop can save you money. 

Here’s how you can spot dip buying opportunities:

• Monitor the Market: Use tools like CoinMarketCap or TradingView to track price movements.
• Set Price Alerts: Many exchanges and apps allow you to set alerts for specific price levels. For example, you can set an alert to notify you if Bitcoin drops below $100,000.

6. Use Dollar-Cost Averaging (DCA)

Dollar-cost averaging (DCA) is one the simplest ways to buy Bitcoin and other crypto. 

It involves investing a fixed amount at regular intervals, regardless of price. 

This way you reduce the impact of volatility and avoid overpaying. Here’s how DCA works:

• Example: Instead of investing $1,000 in Bitcoin all at once, invest $100 every week for 10 weeks. This spreads out your purchases and reduces the risk of buying at a peak.
• Platforms for DCA: Services like Swan Bitcoin and Coinbase allow you to automate DCA investments. 7 www.swanbitcoin.com https://www.swanbitcoin.com/

7. Avoid High Gas Fees on Ethereum

If you’re buying or transferring Ethereum-based tokens, gas fees can add up quickly. Here’s how to minimize them:

• Choose the Right Time: Gas fees fluctuate based on network congestion. Use tools like Etherscan’s Gas Tracker to find the best time to transact 8 etherscan.io https://etherscan.io/gastracker .
• Use Layer 2 Solutions: Platforms like Polygon or Arbitrum offer lower fees by processing transactions off the main Ethereum network. 9 polygon.technology https://polygon.technology/

8. Compare Prices Across Exchanges

There’s no need to be loyal to one single exchange. In fact, it often makes sense to use different exchanges. 

Prices can vary between exchanges because of differences in liquidity and demand. This means you’ll often find better deals when comparing. 

Here’s how to compare prices:

• Use Price Comparison Tools: Websites like CoinGecko and CoinMarketCap allow you to compare prices across multiple exchanges. 10 www.coingecko.com https://www.coingecko.com/
• Example: If Bitcoin is trading at $100,000 on Binance but $99,800 on Kraken, you could save $200 by choosing Kraken.

9. Avoid Frequent Trading

Unless you’re a profitable trader, frequently buying and selling can quickly eat into your profits thanks to fees and taxes. 

Here’s why:

• Trading Fees: Each trade incurs a fee, which can add up over time.
• Tax Implications: In many countries, crypto transactions are subject to capital gains tax. Holding your investments longer can reduce your tax burden. Paying tax on crypto is unavoidable for many people.

Final Thoughts

Paying less for your crypto is all about being strategic. 

Choose the right exchange, use limit orders, avoid high fees, and take advantage of market dips. 

By following these tips, you can maximize your investment and get more crypto for your money.