Why are CoinSpot Fees so Expensive?

Summary: CoinSpot's fees are on the higher side, particularly due to its 1% charge on Instant Orders and 2-3% spreads, making it a costly choice for regular and volume traders. While it offers a lower fee option through its 'Market Order' feature, limitations in cryptocurrency variety and liquidity issues may affect efficient trading. Kraken emerges as a viable alternative, offering lower fees, better liquidity, and a wider range of services, suitable for both novice and experienced traders seeking cost-effective trading solutions.

Are CoinSpot Fees High?

CoinSpot, an Australian cryptocurrency exchange, is recognised for its relatively high fees. It charges a 1% fee on instant trades, a significant rate for regular traders. After testing over 10 transactions, we found that the spread, the difference between buying and selling prices, was consistently between 2-3%. This spread significantly impacts the overall transaction cost, making CoinSpot one of the more expensive options in the region.

While CoinSpot offers a lower 0.1% fee with its 'Market Order' feature, this option is limited to just 10 cryptocurrencies and frequently faces liquidity issues, which can affect the execution of orders at preferred prices. This is especially crucial for traders dealing with less common digital assets or large volumes. A thorough understanding of these fees and limitations is vital for users to make informed decisions when selecting a cryptocurrency exchange.

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CoinSpot Fees Explained

CoinSpot maintains a clear fee structure divided into two main categories: trading fees and deposit/withdrawal fees. Our thorough analysis offers a comprehensive overview of these charges.

Trading Fees: CoinSpot applies varied fees depending on the trade type and service. These include:

• 1% for Instant Orders
• 0.1% for Market Orders
• An average of 2% for Spreads
• 0.1% for OTC (Over-The-Counter) Trades
• 1% for Recurring Buys
• 1% for Advanced Order Fees

Deposit/Withdrawal Fees: Fees for depositing and withdrawing funds differ based on the chosen method:

• 0% for PayID/Poli/Bank Transfers
• 0.9% for BPAY
• 2.5% for Cash Deposits
• 2.58% for Card Transactions

Understanding this variable fee structure is essential for users to effectively manage their trading and transaction costs. By offering a detailed categorization of these fees, traders can make informed decisions based on their preferred trading activities and payment methods.

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Market Orders vs Instant Orders on CoinSpot

CoinSpot offers two primary types of orders: Instant Orders and Market Orders, catering to different trading needs. Instant Orders, favored by the majority of CoinSpot's 2.5 million users in Australia, support trading across more than 370 crypto assets. However, they come with a 1% trading fee and a price spread of 2-3%. These costs are significant and should be considered carefully by traders.

On the other hand, Market Orders carry a lower fee of 0.1% but are available for only a limited selection of cryptocurrencies, such as BTC and ETH. These orders often experience wide spreads and low liquidity, with Bitcoin markets, for instance, showing a 3.24% spread. Due to these limitations, Market Orders may be less suitable for certain trading strategies.

Traders should weigh these details when choosing their trading approach on CoinSpot, taking into account both the costs and the liquidity of different order types.

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What is the Best Alternative to CoinSpot?

If you are looking for an alternative to CoinSpot in Australia, Kraken stands out as a robust option. It boasts a competitive fee structure, with maker fees starting at 0.16% and taker fees at 0.26%. This is particularly appealing for active traders who aim to minimize costs.

Kraken also supports an impressive array of over 200 cryptocurrencies, offering traders a broad spectrum of investment possibilities. It's particularly known for its high liquidity which is critical for executing large-volume trades. This feature facilitates the easy purchase of substantial quantities of digital assets like Bitcoin and Ethereum, often exceeding $1 million AUD.

Furthermore, Kraken enhances its trading platform with a range of services such as staking, over-the-counter (OTC) trading, and margin trading. These additions make it a well-rounded choice for Australian crypto investors looking for diverse trading tools and lower transaction costs.

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Bottom Line

In summary, CoinSpot, while popular in Australia, features a fee structure that may be considered high, particularly due to the 1% charge on Instant Orders and 2-3% spreads. This makes it a costly option for frequent and volume traders. The 'Market Order' offers a lower fee but is limited to a small range of cryptocurrencies and can suffer from liquidity issues. For those seeking more economical fees and a wider variety of services, Kraken presents a strong alternative with lower fees and high liquidity, catering to both casual and advanced traders.