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Author: Admin | 2025-04-28
Congestion. This can be beneficial as it allows users to choose between faster transactions with higher fees or slower transactions with lower fees.Read next: Wait, do I need to pay tax on crypto fees?Exchanges such as Kraken, Poloniex, and Bitfinex offer margin trading, allowing users to borrow funds to increase their trading position and leverage. These exchanges typically charge fees based on the borrowed amount and an interest rate determined by the available supply of funds if a trade results in liquidation, an additional fee may be charged.Cost of trading: High trading fees can eat into profits, especially for high-frequency traders. It's crucial for traders to understand the fee structure of the exchange they use to optimize their strategies.Exchange choice: Fees can influence a trader’s choice of exchange. Some traders may prioritize low-fee exchanges, while others might prefer exchanges with better security, features, or liquidity, even if the fees are higher.Market makers & volume discountsTo boost liquidity, many exchanges offer reduced trading fees for “market makers”—traders who place limit orders rather than market orders—and for those with high trading volumes.Exchange token discountsA growing trend among exchanges is offering fee discounts to users who hold and use the exchange’s proprietary cryptocurrency token. Examples include KuCoin, Huobi, and Bitfinex. Typically, these discounts decrease annually until they are eventually phased out after four to five years.Whatever exchange you're using, you'll need to pay tax when you trade or sell crypto on an exchange and make a gain, as well as potentially Income Tax on a number of other transactions like staking and other rewards. A crypto tax calculator like Koinly integrates with more than 800 exchanges to let you calculate your crypto taxes easily and quickly.
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