| Updated: December 3, 2024Trading cryptocurrencies has become a popular investment option for millions of traders across the globe. Estimates suggest the number of people using cryptocurrencies is anticipated to hit 861 million users worldwide by 2025. And while there is a plethora of broker and exchange platforms that allow crypto trading, it is always crucial to pick a reliable entity that will offer competitive trading conditions. Fees applied to trades are of key importance for one’s success as a crypto trader or investor. When traders buy and sell cryptocurrencies or speculate about their price fluctuations, they are typically charged a small fee known as the spread.
Low spreads are crucial for budget-friendly trading so we have covered some of the best brokers and crypto exchanges that offer the tightest spreads. Below, you can check our list of top-notch crypto trading platforms and their trading conditions.
PrimeXBT
MEXC
Binance
KuCoinTop 9 Crypto Trading Platforms with Low Spreads
- 1. PrimeXBT
PrimeXBT is our next suggestion for a reliable exchange platform facilitating crypto trading. The company launched its operations in 2018 and has since provided traders around the globe with advanced financial technology, helping them capitalize on the cryptocurrency markets. In a short time, the brand managed to attract over 1 million users across more than 150 countries thanks to its favorable trading conditions and competitive charges.
PrimeXBT supports more than 60 crypto assets, enabling its customers to purchase them with their VISA or Mastercard. Trading crypto futures contracts for cryptocurrencies like Bitcoin and Ethereum is also among the company’s offerings. By creating an account with PrimeXBT, traders will benefit from some of the most competitive fees and funding rates in the industry. Maker fees start from just 0.1%. BTC/USDT Maker/Taker fees, for example, stand at 0.01%/0.02%, and the minimum order size is 0.001 BTC. Trading on leverage up to 1:200 is possible at PrimeXBT, giving traders the chance to increase their profitability.
Beyond cryptocurrencies, PrimeXBT allows traders to diversify their portfolios through forex, indices, and commodities. Copy Trading is another core product supported by the brand, empowering traders to replicate the trading moves of recognized experts.
Risk warning: Before engaging with this website and the services made available through it, you should read all relevant Terms & Conditions, policies, and accompanying documentation which govern the Terms of Use of all PrimeXBT products and services. Crypto Futures and CFDs products are complex financial instruments which come with a high risk of losing money rapidly due to leverage. These products are not suitable for all investors. You should consider whether you understand how leveraged products work and whether you can afford to take the inherently high risk of losing your money. Virtual Assets are volatile and their value may fluctuate, which can lead to potential gains or significant losses. Returns or profits may be subject to capital gains tax. If you do not understand the risks involved, or if you have any questions regarding the PrimeXBT products, you should seek independent financial and/or legal advice if necessary. - 2. Binance
Binance is one of the most popular crypto exchanges that allows over 200 million customers to buy, sell, and trade more than 500 crypto assets. Since Binance allows both Basic and Advanced trading, the exchange is considered an equally good option for beginners and more experienced traders. With so many cryptocurrencies to choose from, one can easily diversify their portfolio and opt for multiple profitable investments.
Spot trading is the most straightforward trading form you can engage in as a Binance member. Whether you buy or sell crypto, you will be charged a small trading fee of 0.1%. Meanwhile, traders who use the in-house coin of Binance, BNB Coin, will be able to further reduce their trading costs. More advanced trading options available on the Binance exchange platform include margin trading, futures, and perpetuals. Margin traders can use maximum leverage of 1:125. If you compare the maker and take fees charged on trades, you see that Binance offers some of the lowest trading charges.
Spreads offered by Binance are also tight, further reducing trading costs. While the bid-ask spread on cryptocurrencies is variable, we have detected that the most recent average spread on currency pairs like BTC/USDT, ETH/USDT, and USDT/USD has been around 0.06%, 0.08%, and 0.34%, respectively.
- 3. MEXC
MEXC is a leading cryptocurrency exchange renowned for delivering seamless trading with minimal or no delays. The exchange provides a broad range of services to its customers, enabling them to buy, sell, swap, and custody over 2,700 popular and emergent crypto coins. Over 10 million traders from more than 170 countries have chosen MEXC as their go-to platform for low-cost crypto trading, unsurprising considering the competitive prices the exchange offers.
There are various ways to gain exposure to the crypto markets at MEXC, from spot and perpetual futures trading to copy trading. More active customers who trade crypto on the spot will benefit from 0.000% maker and taker fees. The exchange charges futures maker/taker fees as low as 0.000% and 0.010%, respectively.
While MEXC offers very tight spreads, trading costs may vary significantly across different markets. High-volume cryptocurrencies like Bitcoin and Ethereum come with average spreads of 0.01%, but the costs may exceed 3.40% for less-known coins like PIB (Pibble). Existing customers are eligible for referral commissions for bringing their friends over. Collecting additional rewards is also possible through staking, as MEXC offers locked and flexible savings options.
- 4. KuCoin
The year 2017 saw the launch of KuCoin, which went on to become one of the largest exchanges in the crypto sphere, with a daily trading volume that exceeds $1 billion. Its spreads are considered to be relatively low, and its notable cryptocurrencies include Bitcoin (0.01% spread), Ethereum (0.01% spread), and Tron (0.06%).
KuCoin users can partake in spot trading and try out crypto derivatives such as futures, coin-margined contracts, and more. Trading with margin is also available. The platform is suitable for both desktop and mobile devices. Its smartphone app can be downloaded either from the App Store or Google Play, making it compatible with both Android and iOS phones.
If you decide to give KuCoin a try, you can rest assured if you ever need assistance, you can always reach out to a representative of KuCoin’s support team. Customer support is available 24 hours a day, 7 days a week.
Fusion Markets is a retail broker that has been in operation since 2019, bringing top-class trading services to its customers. The brand offers CFD trading on multiple markets, with crypto being one of them. Trading Bitcoin, Ethereum, and 11 other popular cryptocurrencies is extremely easy, with CFDs allowing traders to speculate on the price of an asset without actually owning it.
Fusion Markets ensures that every type of investor will have a smooth trading experience, with the broker’s trading platform boasting a user-friendly interface, suitable for both beginners and experienced traders. As for ensuring fair and safe trading conditions, Fusion Markets follows regulatory guidelines imposed by authorities like ASIC, VFSC, and FSA.
One of the main reasons we recommend Fusion Markets to crypto traders is the competitive trading cost it offers. Spreads on major crypto pairs like BTC/USD, ETH/USD, and DOGE/USD average around 20,2.7, and 0.0, respectively.
Gleneagle Asset Management Limited (ABN 29 103 162 278) trading as Fusion Markets, is the issuer of the Fusion Markets Products described in this communication. Trading in Fusion Markets Products involves the potential for profit as well as the risk of loss which may vastly exceed the amount of your initial deposit and is not suitable for all investors. You should read all of these Financial Product Service Terms, the Product Disclosure Statement (PDS) and the Financial Services Guide (available on our website) carefully, consider your own financial situation, needs and objectives for investing in these Fusion Markets Products and obtain independent financial advice.- 6. IC Markets
You can start your crypto journey as an IC Markets member – one of the top-performing retail brokers online. Launched in 2007, IC Markets offers a wide selection of CFD assets, including cryptocurrencies. With more than 20 crypto pairs available to trade, the broker allows easy diversification of one’s portfolio, with both stablecoins and altcoins available on IC Markets’ CFD platform.
Some of the exclusive features of trading crypto CFDs with IC Markets include leverage of up to 1:2, trading crypto CFDs 7 days a week, and being able to take both long and short positions. However, we believe that one of the most distinctive advantages of trading cryptocurrencies on IC Markets’ platform is paying competitively low trading fees.
Clients of the broker will pay zero commissions on their crypto CFD trades. What is more, low spreads will further reduce the trading cost, allowing investors to trade popular pairs like BTC/USD, ETH/USD, and DOGE/USD with an average spread of 6.46, 2.97, and 0.000, respectively.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70.64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 7. eToro
Popular for its copy trading feature, eToro is also a great brokerage company for overall trading, with crypto being on the markets you can invest in as an eToro client. While most retail brokers limit their crypto coverage to CFDs, eToro also offers its members spot crypto trading, meaning they can own the crypto assets they buy and sell. Clients can securely hold their digital coins in a safe custodial wallet available via the eToro Money app. No matter which form of crypto trading you pick, eToro will provide some of the most competitive conditions you can come across online.
Since eToro allows its members to trade more than 100 crypto assets, it is extremely easy to diversify your portfolio. When you buy or sell crypto assets on eToro, you will pay a flat-rate fee of 1%, with spot trading actually allowing you to gain ownership over the asset you have purchased. The 1% fee is added to the ask-bid spread, allowing traders to easily calculate the cost they will pay for trading crypto with eToro.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. - 8. FP Markets
Trading crypto is widely accessible to members of FP Markets, which is one of the leaders in the Forex and CFD trading sector. The broker allows its customers to trade CFDs on various assets, including a dozen popular cryptocurrencies. Crypto traders are allowed to take both long and short positions, providing them with the opportunity to benefit from any type of price movement.
FP Markets offers its clients some of the best trading conditions, allowing them to use leverage and further boost their profits. Meanwhile, the spreads that apply to crypto trades at FP Markets are competitively low, allowing you to trade popular crypto pairs like BTC/USD, ETH/USD, and DOGE/USD with average spreads of 21.08, 4.45, and 0.0012, respectively. The best part is that you will pay no commission on your trades, making your crypto trading experience with FP Markets extremely cost-effective.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.92% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. - 9. Global Prime
Another top-notch brokerage suitable for crypto traders is Global Prime. Operating since 2010, the brand strives to be one of the best service providers in the trading sector, covering a wide range of markets, including cryptocurrencies. Members of the broker will have the opportunity to take both long and short positions, speculating on the price movements of popular crypto coins, with Global Prime covering 40 popular crypto assets.
Since crypto can be traded only in the form of CFDs, you are not required to have a crypto wallet as you will not gain actual ownership over the underlying asset. Instead, you can make profits from the price fluctuations of the crypto asset of your choice. To further boost your gains, Global Prime will also allow you to use leverage of up to 1:2. Meanwhile, those who open a professional trading account with the broker or are members of the VFSC entity can use leverage of up to 1:5. Global Prime charges an insignificant trading fee of 0.1% and competes with major crypto exchanges when it comes to spreads. You can trade popular crypto pairs like BTC/USD, ETH/USD, and DOGE/USD with an average spread of 64.3, 6.61, and 0.93, respectively.
Global Prime is a trading name of FMGP Trading Group Pty Ltd (ABN 74 146 086 017) and is regulated by ASIC and licensed to carry on a financial services business in Australia under Australian Financial Services License No. 385620. Gleneagle Securities Pty Limited trading as Global Prime FX, is a registered Vanuatu company (Company Number 40256) and is regulated by the VFSC. The website is owned and operated by FMGP Trading Group Pty Ltd, ABN 74 146 086 017.
Comprehensive Comparison of the Top 5 Crypto Trading Brokers with Low Spreads
| Broker | Account Minimum | Regulators | Spread | Avg Execution Speed | Leverage | Instruments | Cryptocurrencies | Other Fees | Negative Balance Protection | Trust Pilot Rating |
|---|---|---|---|---|---|---|---|---|---|---|
| 1. Fusion Markets | $0 | ASIC, FSA (Seychelles), VFSC (Vanuatu) |
| 37ms | 1:2 (ASIC), 1:10 (FSA, VFSC) | CFDs | 13 |
| Yes | 4.9 ⭐ |
| 2. FP Markets | $100 | ASIC, CySEC, FSA (Seychelles), FSCA, FSA (St. Vincent and the Grenadines) |
| 40 ms | Up to 1:2 (Retail); Up to 1:5 (Pro) | CFDs | 12 |
| Yes (Retail traders) | 4.7 ⭐ |
| 3. IC Markets | $200 | FSA (Seychelles), CySEC, ASIC |
| 35ms | Up to 1:2 (Retail); Up to 1:5 (Pro) | CFDs | 23 | Raw Spread Account (cTrader) - $3 commission per $100k; Raw Spread Account - $3.5 commission per lot per side; Swaps on long and short positions of -15 points; No deposit and withdrawal fees | Yes (European and Australian Retail traders) | 4.5 ⭐ |
| 4. Global Prime | $0 | ASIC (No. 385620), VFSC (No. 40256) |
| 100 ms, 1 to 5 ms with VPS | Up to 1:2 (ASIC); Up to 1:5 (Pro and VFSC) | CFDs | 39 | $7 round-turn commission on Raw Accounts, 0.1% trading fee | Yes (Retail ASIC traders) | 4.5 ⭐ |
| 5. eToro | $50 - $10,000 (varies in different jurisdictions | FCA, CySEC, ASIC, MFSA, ADGM, FSA, FINRA/FinCEN, AMF, SEC, GFSC | Variable spreads | < 1000 ms | Up to 1:2 (European and Australian Retail traders) Up to 1:5 (Pro and FSA traders) | Spot, CFDs, Copy Trading | 100+ |
| Yes (Retail traders) | 4.2 ⭐ |
Top 5 Crypto Exchange Platforms with Low Spreads
| Exchange | Tradable Coins | Maker/Taker Fees | Spread | Slippage Resistance Feature | Interest Rates | Wallet Service | Max Leverage | Payment Methods | Regulators | Trust Pilot Rating |
|---|---|---|---|---|---|---|---|---|---|---|
| 1. CoinJar | 50+ | Taker fee between 0.10% and 0.06% depending on monthly trading volume; Maker fee between 0.10% and 0.02% depending on monthly trading volume |
| No | Not specified | Yes (Custodial) | Unavailable | Bank Transfer, SEPA Trasnfer, PayID, Faster Payments, Instant Buy through Visa, Mastercard, ApplePay, and GPay | FCA (No. 928767), ASIC (ACN 163 543 824), MAS | 4.2 ⭐ |
| 2. Coinbase | 260+ | Taker fee between 0.05% and 0.60% depending on monthly traded volume; Maker fee between 0% and 0.40% depending on monthly traded volume |
| Yes (protection points) | 8% annual rate | Yes (Self-Custody) | Up to 1:10 | SEPA Transfer, East Bank Transfer, 3D Secure Card, Instant Card Cashouts, Sofort, iDeal, PayPal, Apple Pay, Google Pay, BancomatPay, Sofort, iDeal, Crypto | CFTC (US), FCA (UK), Licensed in almost all states in the US | 3.8 ⭐ |
| 3. Crypto.com | 350+ | Spot & Margin: from 0.2500%/0.5000% to 0%/0.0500% (depends on tier) |
| Yes (Slippage Tolerance) | from 0.0800% to 0.0100% daily rate (depends on tier) from 29.20% to 3.65% annual rate (depends on tier) | Yes | 1:10 | Bank Transfer, Wire Transfer, SEPA Transfer | FCA, MAS, AMF, VARA, South Korean authorities, AUSTRAC, ASIC, OAM, Hellenic Capital Market Commission, CySEC, CIMA, CFTC | 1.5 ⭐ |
| 4. Kraken | 260+ | Spots: from 0.25% / 0.40% to 0.00%/0.10% (depends on tier); Margin: 0.02% opening fee; Futures: from 0.0200% / 0.0500% to -0.0060%/0.01% (depends on tier) |
| Yes (Market Price Protection, Fat finger Warning) | 0.02% on every 4 hours | Yes (Self-Custody) | 1:50 | Visa, Mastercard, PayPal, Wire Transfer, Etana Custody, Apple Pay, Google Pay, Crypto | FinCEN (US), FINTRAC (Canada), FCA (UK), FSRA (Abu Dhabi), AUSTRAC (Australia), CBI (Ireland), DNB (the Netherlands), BoS (Spain), OAM (Italy), CBB (Bahrain), VARA (Dubai), AUSTRAC (Australia), BAPPEBTI (Indonesia), SEC (Thailand), SAT (Mexico), CNAD (El Salvador), Registered FSP in South Africa | 1.4 ⭐ |
| 5. Binance | 500+ | Spot & Margin: from 0.1000% / 0.1000% to 0.0110% / 0.0230% (depends on tier); Futures: from 0.0200%/0.0500% to 0.0000%/0.0170% (depends on tier) |
| Yes (Slippage Resistance Tool) | from 0.00068958% to 0.001104% hourly rate (based on tier); from 6.04% to 9.67% yearly rate (based on tier) | Yes (Self-Custody) | Up to 1:125 on crypto futures | Credit/Debit Card, Bank Transfer, iDEAL, Digital Wallets, Crypto | AMF (France), OAM (Italy), FIU (Lithuania), BoS (Spain), FSA (Sweden), AIFC (Kazakhstan), FSRA (Abu Dhabi), CBB (Bahrain), VARA (Dubai), AUSTRAC (Australia), JFSA (Japan), BAPPEBTI (Indonesia), FMA (New Zealand), SEC (Thailand), SFCA (South Africa), SAT (Mexico), CNAD (El Salvador) | N/A ⭐ |
Coinbase
When it comes to crypto trading, there are a few top players that guarantee some of the best trading conditions. Coinbase is among these top-tier trading platforms, making sure to always upgrade its services, offering low fees, a wide range of tradable assets, and a user-friendly platform catering equally to newbies and experts. Coinbase customers have access to over 260 tradable cryptocurrencies and more than 400 pairs, with the option to hold over 400 digital coins in a secure hosted or self-custody wallet.
Spot trading at Coinbase will allow you to buy and sell digital assets, paying extremely low maker and taker fees, with higher monthly trading volume further decreasing maker fees to 0.0% for VIP traders. You can also trade cryptocurrencies by simply speculating on the price movements of the underlying crypto asset. Futures and Perpetuals are also tradable at Coinbase, with the exchange charging some of the lowest trading fees in the crypto market.
Spreads at Coinbase are also competitive, ensuring the most budget-friendly trading experience for customers. While spreads are variable and depend on multiple market conditions, the average spreads on major crypto pairs like BTC/USD, ETH/USD, and USDT/USD are estimated to be around 0.02%, 0.02%, and 0.01%, respectively.
Kraken
Kraken is a popular crypto exchange, preferred by over 10 million traders from more than 190 countries due to its low fees and advanced trading features. After you create and verify your account with Kraken, you will have the opportunity to trade more than 300 crypto assets. This means portfolio diversification is extremely easy with Kraken.
Kraken allows you to buy and sell crypto, offering you actual ownership over the asset. Taker and maker charges are very competitive, allowing spot traders to reduce maker fees to 0.0% if they accumulate a monthly trading volume above $10 million. Futures trading is also available to Kraken customers, enabling investors to trade crypto assets without owning them. As for those who wish to place bigger orders, it is also possible to engage in margin trading and boost your potential wins with maximum leverage of 1:5.
One can easily check the fee structure implemented by Kraken before they start trading. While ask-bid spreads are variable and will change as market conditions also go through some alterations, the average spread on major crypto pairs like BTC/USD, ETH/USD, and USDT/USD is 0.01%.
Crypto.com
Crypto.com is another great crypto exchange worth exploring as it offers its customers multiple trading options, covering more than 350 digital assets and 590 tradable pairs. You can buy, sell, and trade different altcoins and pick multiple assets to enrich your crypto portfolio. You can engage in both spot and margin trading, picking the trading option that fits your goals the best.
Trading fees at Crypto.com are extremely competitive, allowing retail investors to trade multiple crypto assets and pay a maker or taker fee of 0.1500% or 0.3000%, respectively. The good news is that advanced traders who accumulate bigger monthly trading amounts can reduce these fees. Meanwhile, customers who are actively participating in Crypto.com’s staking program can get a discount on the maker and taker fees they pay for their crypto trades. Staking is available for over 25 coins, with maximum rewards reaching 15.39% for ATOM.
Crypto.com also strives to offer some of the tightest spreads on crypto trading, allowing clients to enjoy the best price for their investments. While spreads may range, we have spotted an average spread of 0.01% on major crypto pairs like BTC/USD, ETH/USD, and USDT/USD. Margin traders will benefit from a maximum leverage of 1:10 for select pairs.
CoinJar
CoinJar is one of the most prominent crypto exchanges in Australia and the UK, offering crypto investors a safe and fair environment to buy, sell, and trade cryptocurrencies. This over-the-counter trading exchange delivers faster order execution and some of the best prices to its customers to ensure plenty of fruitful outcomes.
Members of the exchange will be able to buy, sell, and convert more than 50 crypto assets. Competitive trading fees are one of CoinJar’s big advantages, allowing investors to purchase and sell crypto and pay maker and taker fees of 0.10%. As traders increase their monthly trading volume, they can further reduce their trading fees and pay a 0.02% maker fee and a 0.06% taker fee.
Spreads charged on trading crypto with CoinJar are also very reasonable, allowing traders to enjoy the best price for their orders. Since the exchange operates mainly in Australia and the UK, you will have major cryptocurrencies traded against fiat currencies like GBP and AUD. The average spread on major crypto pairs like BTC/AUD, ETH/AUD, and USDT/AUD may range around 0.28%, 0.32%, and 0.07%, respectively.
Spread in Crypto Trading
Whether you will be buying and selling crypto assets on a brokerage platform or via a crypto exchange, you will try to make a profit from the difference between the buy and sell price of the asset. That said, you should also keep in mind that you will end up paying some trading fees, with the spread also being one of the surcharges.
Since the crypto market is composed of both buyers and sellers, both sides are striving to generate profits from the best possible price point. However, the difference between the two values will create the so-called bid-ask spread. In the crypto sector, the spread is considered the gap between the highest bid or ask price point and the lowest ask price value recorded in the order book.
It should be noted that the way the spread is created can differ depending on the market you are trading in. Retail brokers usually rely on the so-called market makers or liquidity providers to determine spreads. Meanwhile, crypto markets determine the spread based on the difference between the limit orders set by both buyers and sellers.
If traders wish to buy crypto instantly at the market price, they will have no other choice but to settle for the highest ask price, which is favorable for the seller. Meanwhile, if you want to have your sell order matched instantly, you will need to opt for the lowest bid price of the seller. Assets with higher liquidity, like Forex, have tighter spreads, allowing buyers and sellers to trade the asset without experiencing a drastic difference between the two price points. Meanwhile, less liquid markets could have traders wait longer for their orders to be matched and executed.
Creating liquidity is crucial for trading, with many markets relying on brokers and market makers to provide liquidity in various financial markets. Buying and selling the same asset is often used by market makers as a method to create a spread and ultimately generate arbitrage profits. As there is huge competition among market makers, assets that enjoy higher demand tend to come with lower spreads.
To be able to determine which crypto exchange or broker is offering the lowest spreads on cryptocurrencies, you need to be able to calculate spreads. To be able to assess the spread you will be charged for trading a cryptocurrency, you can use the following formula:
(Ask price – Bid price)/ Ask price x 100 = Spread
If we follow the formula above, we can have a cryptocurrency like GNO, which at the time of writing has an ask price of $263 and a bid price of $261, making the spread $2. If we divide 2 by 263, we will get a spread percentage of about 0.8%. Now, if we explore the BTC price points for the same period, we will see that traders might pay a spread of around $6. While this surcharge is 3x higher than the GNO spread, it is actually lower in percentage, representing a much tighter spread of around 0.010%. That means trading bigger volumes of the highly liquid cryptocurrency would actually impose lower spread fees.
What is Slippage and How it Affects Crypto Traders?
While keeping track of the spread can be done by comparing the ask and the bid price of the crypto asset, traders should also consider the slippage percentage. This factor is a key element that will help you assess the potential price you will end up with when your order is executed.
Slippage is a common occurrence in highly volatile or low-liquidity markets. The simple way of describing this phenomenon is when the order is executed at a price different from the one the trader expected. As mentioned earlier, to get your orders matched instantly or at least in a faster manner, it is often required to agree to a higher price.
Let us assume you have decided to invest in a cryptocurrency and you have placed a buy order for $100 but due to low liquidity, there is no matching sell order in the order book. As a result, you will need to accept orders that exceed your buy price so your order gets executed. The difference between your original buy order and the order that gets executed at a higher price is called slippage.
Whenever you create a market order, the crypto exchange will automatically limit the orders in the order book to allow you to execute your trade at the best possible price. However, as your order cannot be matched, the exchange will expand the list of orders, including possible matches of higher prices. In unstable and low-liquidity crypto markets, it is possible for a slippage of 10% or higher to occur.
It is worth noting that slippage can sometimes be positive as the price difference may sometimes be in your favor. This phenomenon occurs whenever market prices decline when you place a buy order or whenever there is an increase in market prices when you place a sell order. It should be noted that positive slippage is not that common but it may be observed in some volatile markets.
As slippage is something that crypto traders wish to avoid, some crypto exchanges allow their customers to set up a slippage resistance level. This feature is available in automated market makers like PancakeSwap on Binance Smart Chain. If you do make use of this feature, it is possible that your orders can be executed extremely slowly. For example, if you set up the slippage resistance level to a low, it may take very long until your order is matched, and in some cases, it may not get matched at all.
How to Minimize Slippage when Trading Cryptocurrencies
Even though it is difficult to completely avoid slippage while trading cryptocurrencies, there are a few ways you can minimize the occurrence of negative slippage. We will list a few tips that can help you whenever you place your buy/sell orders, allowing you to trade crypto coins at the most optimal price possible.
Opt for multiple smaller-size orders
Instead of making one large order, you can break it down into smaller blocks, with more reasonable prices giving you a better chance of quick execution. Make sure to keep an eye on your order book and avoid placing orders that surpass the available volume.
Avoid high surcharges
While it is good to avoid negative slippage, you should also consider other trading fees you may be charged for your orders. Some decentralized crypto exchanges tend to charge significantly higher fees depending on the blockchain’s traffic. That can easily cost you more even if there is minimal slippage.
Consider the liquidity factor
If you are trading crypto assets with low liquidity, the orders that you place can have a serious impact on the asset’s price. Even if a single transaction can have a low slippage percentage, multiple small-size orders in a low-liquidity market can have a serious impact on the price of your next transactions.
Make use of limit orders
Sometimes the speed of execution is worth sacrificing if you are able to minimize slippage. Limit orders allow you to get the exact price that you expect or even execute your order at a better price.
Factors that Affect Spread Fluctuations
There are several factors that have an impact on the spreads in crypto trading. Being aware of these elements will help you understand how a spread may change and affect your crypto trades. The main factors that may affect the spreads of crypto trades include the market’s volatility, liquidity, the current trading volume, and the exchange platform that you use.
The correlation between the market’s volatility and the spread you may pay is pretty straightforward. High volatility typically indicates that there is a risk increase and the market is pretty unstable. Naturally, that would lead to wider spreads when trading a cryptocurrency with high volatility.
Low liquidity also affects spreads negatively as it indicates fewer participants in the market, which in turn will slow down the execution of orders. The slower your orders get executed, the wider the spread. Similarly to low liquidity, low trading volume also shows there are fewer buyers and sellers participating in the market. Yet again, a decline in trading activity equals slower order execution, which will also make spreads wider.
Comparing spreads across multiple exchanges is important as competition may be the driving force for many exchange brands to offer lower spreads on crypto trading. Since crypto exchanges are basing their spread charges on factors like gaps in the order book, other trading fees, and competition, it is worth drawing a comparison between several exchanges before you choose where to trade crypto.
Other Fees Associated with Crypto Trading
While spreads will give you a pretty good indication of what you will end up paying for your order execution, there are also other surcharges you need to consider whenever you decide to trade cryptocurrencies. Whether you choose to trade with a broker or a crypto exchange, you need to fund your trading account before you can place any type of order. In most cases, deposits via payment methods like credit/debit cards, e-wallets, wire transfers, and instant banking services will incur no fees.
If you choose to directly purchase a cryptocurrency via an exchange platform, you can often choose from a wide range of fiat payment options, suitable for traders residing in different jurisdictions. Depending on the amount of crypto coins purchased, the current price of the asset, and other market conditions, you will be charged a transaction fee that will be clearly stated before you confirm the purchase.
Whenever you are trading crypto as CFDs using the services of a retail broker, you will rarely be charged a commission for your trades. Instead, brokers tend to include a small fee into the spread applied to the trade. However, as traders may also keep their positions open overnight, brokers might also charge an overnight fee, which is variable as it is determined based on several market factors.
Spot trading as well as other forms of crypto trading you can enjoy as an exchange client will also come with certain trading fees. Whenever you place an order and it is instantly matched and executed, you will be charged a so-called taker fee. Meanwhile, if your order is placed in the order book and takes some time to be executed, you will be charged a maker fee as you are considered a client who helps create the market. Typically, maker fees are lower than taker fees but both surcharges tend to get lower when traders accumulate higher monthly trading volumes.
As you can see, there are a few different types of fees to consider whenever you are trading crypto, including spreads that will be applied to your orders. We recommend doing your research and picking the platforms that will offer overall the most cost-effective crypto trading experience.
How to Choose a Crypto Trading Platform with Low Spreads?
To be able to pick a trading platform that will offer the most competitive prices and fair trading conditions, we advise our readers to base their choice of broker or exchange on several factors. While it is important to select a platform with competitive spreads, below, we have also listed a few other features to keep in mind when choosing a crypto broker or exchange.
Choose a trading platform that corresponds to your trading experience. While many brokers and exchanges strive to cater to both beginners and experienced traders, some platforms lack the education materials and tools to help novices get accustomed to crypto trading faster. Most of the brokers and crypto exchanges we have covered in this article are suitable for any type of trading experience as their platforms boast user-friendly designs. In addition, newbies can find plenty of educational materials on the websites of these trading platforms, allowing inexperienced traders to learn about intricate crypto trading topics.
The fee structure adopted by the trading platform you plan on joining is also a crucial part of your journey to finding the best destination for your trading experience. As we have already mentioned, while low spreads are definitely something to look for when picking a trading platform, you should also consider other applicable fees.
If you are charged for your deposits and withdrawals and there are commissions and taker/maker fees that are extremely high, even lower spreads cannot help you reduce the overall cost of trading. Instead of focusing only on one type of surcharge, we suggest combining all kinds of fees applicable to your trades to get a proper estimate of the overall cost of trading.
Safety is also of major importance whenever you are choosing a broker or exchange to trade with. We suggest you do your own research of the platform and check the validity of the licenses and permissions it has obtained. You should also consider your country of residence as some brokers and exchanges are authorized to legally operate in fewer regions. Opting for a platform that is not regulated within your country of residence can be dangerous and it offers no protection in case of unfortunate trading events.
One very important thing to consider before settling for a crypto exchange or retail broker is your trading goal. Depending on your preferences, you may find some platforms more suitable than others. If you are looking to diversify your portfolio, you may opt for a platform that covers a larger range of altcoins. The majority of retail brokers offer their customers to trade CFDs on several popular cryptocurrencies, but there are brokers like eToro that will also offer spot trading, allowing you to engage in different trading strategies.
There are a few exchange platforms that focus mainly on spot trading, enabling fast orders and cost-effective transactions. That said, if you wish to make use of leverage, you might opt for a crypto exchange that offers margin trading as well as futures, perpetuals, or options, which may also allow traders to use leverage.
Whatever your trading goals are, it is important that they align with the services offered by the broker or crypto exchange. We believe if you pay attention to the aforementioned factors and opt for a platform delivering competitively low spreads, you can enjoy a top-notch crypto trading experience.