How to Buy and Sell Cryptocurrency Without Paying Fees (or With Paying Minimal Fees)
The page originally focused on using Coinbase Pro to avoid fees, this method was great as you could deposit dollars for free, then move your dollars to Coinbase Pro and place limit orders there for free. However, starting March 22nd 2019 Coinbase Pro has done away with free limit orders and replaced them with a industry standard fee of 0.15% (most exchanges charge between 0.1 – 0.25%).
Given the change to Coinbase Pro, there are no longer any major exchanges which allow trading without fees, however there are a few major exchanges that have reasonably low 0.1% fees including KuCoin and Binance that can be made even lower by using the tokens of these exchanges (when you use their tokens to pay your fees you get a discount on your trading fees).
Meanwhile, there are some smaller exchanges that try to incentivize users with zero fees. One example is Cobinhood.
With that said, to get crypto into Cobinhood you have to first convert dollars into crypto, and that means using an exchange like Coinbase to do the conversion and then sending your crypto to Cobinhood… so really, there is no longer any way that I know of to trade crypto without paying fees!
Thus, this page is now going to be about “how to trade at low fees / minimal fees.”
TIP: Other exchanges aside from the ones noted here allow you to trade without fees or with low fees. This page just provides some examples. To do your own research Google “fee schedule” + “the name of the exchange.” For example, see Kraken’s Fee Schedule.
UPDATE MARCH 2019: Limit orders on Coinbase Pro (GDAX) are no longer free starting March 22nd 2019. See: Coinbase Pro Market Structure Update. Note, free limit orders are still offered to those who do over $50 million in volume. Also, if you trade over $100k worth of crypto, your fees are reduced to 0.1%. So if you trade a lot, Coinbase Pro sill offers reduced fees.
To Keep Fees Low, as a Rule of Thumb, Use Bank Deposits and Limit Orders: In general things like using bank wires to fund a crypto account, buying with a credit card, and using market orders instead of limit orders can result in higher fees.
Coinbase Pro Used to Be Called GDAX: GDAX is now called Coinbase Pro. At one point in time this page was about trading for free on GDAX. Times have changed, now it is about trading for minimal fees on exchanges like Binance, KuCoin, and Coinbase Pro.
Why does this matter? Most (if not all) user-friendly ways to buy cryptocurrency involve paying rather hefty fees. For example, if you have a Coinbase.com account (the app and website, not the Coinbase Pro exchange), you probably have already realized that buying cryptocurrency via the basic interface means paying fees (at least 1.4% per buy and 1.4% when you sell). That means you have to not only make money on cryptocurrency but have to make an extra 3% at least to pay off Coinbase before you see a profit. That isn’t ideal, so we tell you how to avoid that.
NOTE: Fee schedules are always subject to change. Please check the current fee schedule.
How to Trade With No Fees
To trade with no fees you have to use a lower volume exchange. Cobinhood is one example. You can trade with no fees at Cobinhood, meaning your only cost would be moving funds back and forth from Cobinhood. Some other smaller exchanges will use zero fee trades to get users in the door as well.
- Fund a Coinbase account using a bank deposit. You can follow the directions below for how to sign up and deposit funds in Coinbase. We are doing this method to avoid fees, there is no fee for using your bank account to fund your account with dollars.
- Transfer your dollars to Coinbase Pro.
- Buy Dai, BTC, ETH, LTC, or another coin that trades on Cobinhood using Coinbase Pro (it is cheaper than using Coinbase directly).
- Transfer the Coin you bought to Cobinhood.
- Optional: Buy some Cobinhood to lower margin fees and withdrawal fees.
- Trade a Cobinhood for free.
- Transfer back to a coin that trades on Coinbase to trade back to dollars.
With this method you’ll pay for your initial trade via Coinbase Pro and for your fees for sending crypto between exchanges, but you will otherwise pay zero fees.
TIP: You can also do commission free trading on Robinhood. Robinhood is a custodial service without crypto deposit or withdrawal options. It has a limited selection of cryptocurrencies and only operates in some states. However, with those drawbacks noted, Robinhood is a solution for saving fees when trading crypto.
How to Trade at Minimal Fees Using Binance and KuCoin
Here is how to trade at minimal fees (this is not the only way, just one way that will work):
- Fund a Coinbase account using a bank deposit and then convert your dollars into USDC or simply use your bank account to buy USDC on Coinbase. You can follow the directions below for how to sign up and deposit funds in Coinbase, and then you can swap your dollars for USDC or buy USDC directly. We are doing this method to avoid fees, there is no fee for using your bank account to fund your account with dollars or for using your bank account to buy the USDC stable coin directly.
- Transfer your USDC to Binance or KuCoin.
- Use USDC to buy Binance’s BNB or KuCoin’s KCS. Using these tokens to pay fees will allow you to get a discount on fees.
- Go into your account settings and toggle the switch that let’s you use the exchange’s token to pay discounted fees.
- Use limit orders and market orders, you’ll pay the 0.1% rate minus the discount for using BNB or KCS respectively to bring your fees below 0.1%.
- Transfer back to USDC and send back to Coinbase to swap USDC back to dollars.
Thus the only fees you’ll pay are your discounted trading fee and the fee to send USDC.
NOTE: Alternatively, if you are a high volume trader, you can move your dollars or USDC to Coinbase Pro and trade until you qualify for lower fees.
How to Use Coinbase/GDAX to Buy/Sell Cryptocurrency Without Paying Any Fees
NOTE: Given the changes to GDAX’s name and fee structure, it is important to note that the information below is somewhat dated. For one, GDAX is now Coinbase Pro… for two, the method below will result in 0.15% fees instead of “$0” fees unless you are a high volume trader. That said, this method will still work until March 22nd for no fees and will work to get you set up with a Coinbase account whenever you use it. Once the new schedule is officially in place I’ll update this section.
The idea below is to set up both Coinbase and GDAX, to fund your account in USD, and then use limit orders on GDAX to trade. After that, you can use a platform like Shapeshift to change Bitcoin, Litecoin, or Ethereum into other altcoins like Ripple and Dash.
This isn’t the only way to trade cryptocurrency without paying fees, but it may be the simplest and most user-friendly option (especially in WA and NY where choices of exchanges are limited due to state regulations).
To trade cryptocurrency without paying any fees:
- Sign up for Coinbase (click that link for instructions and a link that will net us both $10 in Bitcoin). NOTE: You’ll need to at least attach your bank account (so you can withdraw and deposit money and verify yourself). You’ll probably also want to upload your ID. Verifying your identity via an ID and bank account will expand your withdrawal limits and spending limits and such.
- Sign up for Coinbase’s GDAX (click that link for instructions, Coinbase and GDAX use the same login).
- Deposit money into Coinbase or GDAX (use a bank wire and pay a small fee, but get access quickly and avoid limits, or make a deposit and wait about 4-8 days and pay no fee, but face a limit of somewhere around $200 – $5,000). NOTE: There is no difference as far as I know between depositing into Coinbase or GDAX.
- If it is that you deposited into Coinbase (and not GDAX), then transfer your funds from your Coinbase USD wallet to your GDAX account by clicking “deposit” in GDAX (on the top left under “balance”). NOTE: Go to “deposit,” the button right next to “withdraw,” select the “Coinbase account” tab, change the “source” to your USD wallet, and hit “withdraw” funds. All withdrawals and deposits are instant and free (same is true for moving coins between accounts).
- Now buy and sell your coins in GDAX. To avoid all fees you must only buy with limit orders and “let the order sit on the books.” In other words, you can’t buy/sell too close to the current price (as that could trigger a fill or partial fill of the order immediately and result in a fee). In simple terms, if your order sells too quick you pay a “taker” fee. NOTE: GDAX is intimidating to get used to, but ultra simple to use. Just turn of margin trading, set limit orders, and double check numbers before you hit the “place an order” button. See our page on GDAX for more.
- Once you have USD from your coin trading on GDAX, “withdraw” your USD from GDAX and put them in your USD wallet in Coinbase (do not withdraw coins from GDAX and sell them on Coinbase unless you want to pay the 1.4% fee; you must sell them on GDAX). NOTE: Go to “withdraw,” the button right next to “deposit,” select the “Coinbase account” tab, change the “destination” to your USD wallet, and hit “withdraw” funds).
- Now from Coinbase go to “accounts,” go to your USD wallet, and hit “withdraw” to withdraw to your bank account.
And that is it, GDAX was your exchange, Coinbase was like your “home base,” and the grand result is that instead of paying a 3% total fee or more for every buy/sell combo, you have now traded cryptocurrency paying no fees at all. Pretty sweet!
Considering we just potentially saved you some money, consider Sending some coins to one of our wallets below:
NOTE: We didn’t create the video below, but it pairs well with the page.
How To Stop Paying Coinbase Fees.
TIP: I do not mean to say that one should never use Coinbase. I do personally (and when I do, I have no problem paying the fees for the ease of use and risk they are taking regarding market volatility in doing my trade for me). First off, Coinbase has an app, and GDAX doesn’t, that means one you can manage on the go, and the other you can’t. With that said, I only do this when the situation calls for it (for example, if the price of BTC dips, I only have my phone on me, and my limit orders aren’t set to take advantage of the dip on GDAX). In other words, one could say that theoretically, the goal would be for 95% of your trading to be done on GDAX with limit orders, 2.5% on GDAX with market buys, and 2.5% on Coinbase. That 5% should be situations where sitting at a desktop and being methodical isn’t an option.
TIP: Market buys on GDAX cost about .3%, that is way better than 1.4%. Still, 0% is better. Unless you can’t get a limit order to fill, there is almost never a good time to do a market buy / sell. Further, if you do a market buy / sell, make sure there are enough buy/sell orders on the books (as if the market is too thin, it can result in slippage).
ADVICE: To get your feet wet, you may want to use only Coinbase. Then when you get to GDAX, you may want to try a few market buys. Once you start buying for real though, do yourself a favor, focus on GDAX and limit orders (using Coinbase, market buys, and stops only when necessary).