With increasingly competitive markets and a need for cryptocurrency exchanges to profit from dealing in alternative currencies, buying Bitcoin without fees has become incredibly difficult. There used to be fairly easy ways to get around paying fees when Bitcoin was gaining popularity, but now this has become difficult to do in a competitive, profit-driven marketplace.
There are still 5 ways you can buy Bitcoin without paying fees:
- Peer to Peer Marketplaces
- Purchase Bitcoin through eToro
- Using the Robinhood Investing app
- Buying Through Lykke (In the EU)
- Taking Advantage of Maker Fees
While we have offered you the best ways to buy Bitcoin without trading fees, this has become incredibly challenging with full autonomy over your purchase. We will also highlight the places you can find some of the lowest fees across cryptocurrency exchanges so you can make the most of your trading and tips to avoid paying high fees.
How to Buy Bitcoin Without Fees (5 Ways)
When we are talking about not paying fees on your Bitcoin purchases, we are referring to ‘trading fees.’ These are commissions taken by currency exchanges as a percentage (or sometimes flat fee) of the value of the transaction you are making. When taking a percentage, larger purchases of Bitcoin will result in larger fees.
Buying Bitcoin is not only a profitable investment opportunity, but it has become lucrative for the currency exchanges that sell them. They profit by taking transaction fees when you purchase the currency from their platform. Almost all exchanges will charge a commission fee at varying rates. The average trading fee for Bitcoin is 0.5%.
While there are not many options for doing so, we have pulled together the very few ways you can avoid these fees in 2020. The suggestions we offer are legitimate ways to avoid paying trading fees, without risks of scams on unreputable sites. Not all parties will qualify for these options depending on the value of your investment, location, and trading preferences.
1. Peer-to-Peer Marketplaces
Peer to peer trading has become a popular alternative to traditional currency exchanges because it allows you to make transactions in local areas, and the transactions can be made without holds from a larger agency. In many of these peer to peer Bitcoin transactions, you will not have to pay a trading fee when you are buying the currency.
The hidden fee that is still being paid is on the side of the seller rather than the buyer. This means that when you plan on selling your Bitcoin peer to peer, you will have to pay an ‘escrow fee.’ Neither side is charged with transaction fees, but in many cases, the seller will have to pay this escrow fee once the transaction goes through smoothly. This is the way exchanges benefit.
That being said, this is a free way to buy Bitcoin without transaction fees! You just have to be aware of the fact that if you plan to sell them on a peer to peer marketplace, you may have to pay fees on the backend, known as withdrawal fees.
You should be aware of the following things before using peer to peer exchanges:
- User reviews: Unless you know the person, you should be doing thorough reviewing of the users you plan to buy and sell with. These will include rankings and reviews of past transactions to ensure safety.
- Cash deals: You should only do these with people you know or have done business with as risks are increased for theft.
- Discounts are questionable: You may be getting scammed if seeing considerable discounts on fees or pricing. Pay market rates for credible transactions.
Using Paxful is a good resource for these free exchanges (restrictions may apply). This is a trusted exchange that offers multiple payment methods and allows you to trade with peers from around the world. Peer to peer exchanges such as this one are also taking advantage of getting discounts on gift cards with Bitcoin, further increasing your purchasing power.
2. Using Robinhood
Robinhood has become a popular investing application that also allows you to buy and sell Bitcoin. When using the application, you can buy Bitcoin with zero trading fees. There are a couple of sites you can check out that do this, but Robinhood has developed a good reputation across the board.
The primary downside to using Robinhood to buy Bitcoin is that you cannot use it directly for third-party transactions, and you cannot transfer it to a wallet outside of the app. This means that Robinhood is in charge of managing the Bitcoin, and this may not be as secure as traditional currency exchange platforms.
There are not insurance policies for cryptocurrencies in the app like there are for stock investments. This can make your Bitcoin purchases a bit risky, especially if you are dealing in large amounts. We recommend trying Robinhood for purchasing Bitcoin if you are making small investments in order to protect yourself against losses.
Robinhood can be a solid option for fee-free Bitcoin purchasing, but the restrictions and security risks raise concerns for users. There are not many applications or sites that offer fee-free investing anymore, and there are likely to be fewer in the future. Take advantage of this application while there are still zero fees.
The reason to consider eToro for cryptocurrency trading is that it is well established and developed, so you know that your investments are secure. This is important to most investors who often participate in cryptocurrencies for this reason. They are one of the few agencies that also charges no fees for trading, although, in some instances, spreads can raise costs.
eToro is a credible site that you can purchase Bitcoin without a trading fee. The only downside is that when you withdraw the money from your Bitcoin profits, you will be charged a flat withdrawal fee. You can read more about their cryptocurrency fee structure here. This is another feasible option, but the transactions will cost you once you return them to your wallet.
You should be aware of some conditions that may apply to your eToro transactions:
- Changing fees: The company states that fees could change at any time when buying or selling for open positions. These fees are largely dependent on market conditions, and it is advised that you check their fee structure frequently to see if any of these changes have occurred.
- Spread fees: These are charged at the closing of a position (sell). This will not impact the fees associated with buying Bitcoin but will have an effect when you plan to eventually sell.
You should stay up to date on all news and information put out by eToro and any currency exchange in which you are invested. This will keep you informed on potential fee changes that occur at any given point in time.
4. Lykke (EU)
Lykke is a Swiss-based online platform that is designed for buying and selling cryptocurrencies. In order to take advantage of these no fees, you will need to do so from the European Union. The combination of the exchange platform and SEPA banking laws have made the zero fees possible.
Because the European Union was initially set up with motives for economic freedom and incentives, keeping fees low (or non-existent is made possible). The SEPA system allows for inexpensive and easy transfers of money across the European Union and other nations included in the zone. This has allowed banks to charge very low fees to applications like Lykke.
Lykke offers not only a 0% deposit fee but also a 0% trading fee. This means when you buy Bitcoin through the application, you will not pay a fee for doing so. You won’t be able to directly use your Bitcoin to buy other things from the application, but once the value of the Bitcoin reaches your desired rate, you can trade it back into your currency for profit.
You can take a look at their current fee and payment structure here. Fees are placed on credit card purchases as well as withdrawals. You can avoid fees by paying from a bank account. This platform is exclusively for those with banks in the EU or those that follow SEPA guidelines. If this applies to your banking situation, you can start trading with the Lykke platform here.
5. Maker Fees
Some fee structures for buying and selling cryptocurrencies are based on “maker and taker fees.” One way you can take advantage of paying no fees for buying Bitcoin is by becoming a ‘maker.’ This occurs when you are buying Bitcoin using a limit price. Limit pricing is when you set a price that you are willing to pay for Bitcoin, and the order is not fulfilled until someone sells it.
With limits that are not being filled, the liquidity of the order book increases. The fees are low for this type of trade because the requests are not filled right away. It may take time for your purchase to be completed. This is different from a ‘taker fee’ in which you order will be completed immediately and decrease the liquidity of the order book.
This is a helpful video that explains the differences between the two with visuals.
To take advantage of zero fees, you will have to place incredibly high limit orders. The greater value of the purchase of Bitcoin, the lower the fee will be. This is in the millions of dollars and is unlikely for many people to qualify for. Either way, the fees for makers are much lower than takers at any purchase point. If you want to pay very low fees, take advantage of being a maker.
These are examples of some of the sites that offer zero fees on the maker side of the Bitcoin purchase:
- Coinbase Pro: You will have to be buying Bitcoin above the 50-million-dollar mark to pay zero fees, but the highest percentage for makers is 0.5% for even the lowest values.
- Kraken: You will need to trade over $10 million to be eligible for zero fees, but their maker fees are lower than the average market rate as well.
Using maker fees to pay zero commission on Bitcoin purchases is only beneficial if you are buying extremely large sums of the cryptocurrency. If you fall into this category, placing large-volume limit orders can be a successful strategy for you. At the same time, using limit orders is not always desired as it does not guarantee the transaction at the time of order.
The Lowest Bitcoin Fee Brokers
Because not everyone will apply for these methods of paying zero fees when purchasing Bitcoin, we also want to equip you with the necessary information to find the lowest fees for Bitcoin purchases. If you do your research (which we have done for you), you can find very low rates. With strong investment strategies, the profits will exceed the fees you end up paying.
These are some of the lowest rates currently available for buying Bitcoin:
- CEX: This platform offers trading fees of 0.25% (similar to that of the Bitcoin purchasing average), and it is widely available across the world for easy Bitcoin transactions. You can check out their fee schedule and restrictions on their site. This trading fee is the only cost in the entire Bitcoin purchasing process, so you won’t have withdrawal fees once you sell.
- Kraken: We mention them for their low maker fees when you invest millions, but they also offer trading rates as low as 0.16% when you place a limit order under $50,000 in a 30-day time period.
- PrimeXBT: They offer 0.05% trading fees when buying Bitcoin. There are potential withdrawal fees and margin financing that can apply to the balances.
- Binance: Offered across many different international currencies, Bitcoin can be purchased for as little as 0.1% makers fees with limit purchases. These rates go down with greater purchase volumes. You can check out their fee schedule here.
- KuCoin: Trading fees on KuCoin are as low as 0.1%. There will be a withdrawal fee, but the purchase of Bitcoin has no cost.
- OKEx: Check out OKEx for another 0.1% maker fee on trades. Deposit and withdrawals may apply depending on your specific transaction. You will see these fees before any purchases are made.
- Coinfloor: Based in the UK, Coinfloor offers zero deposit fees and low withdrawal fees. The maker’s fee for less than 50,000 GBP is 0.3%. This decreases as the value of the investment increases.
These are great starting points for purchasing Bitcoin at very low trading fees and overall fees. With the very limited options in avoiding fees for purchasing Bitcoin, going with one that offers low fees, and no other fees associated with the process can be a safe and cheap way to trade Bitcoin. All of these sites are well protected and trusted exchanges within the industry.
Why Are There Fees For Buying Bitcoin?
In order for these currency exchange platforms to stay in business, they need a way to make money. Charging transaction fees and trading fees is one of many ways in which they earn a profit. With a large number of Bitcoin transactions that occur every day, they are accumulating a nice sum of money even when those percentages are so low.
There are a couple of reasons that these fees are in place:
- Ensure security and uphold network: These exchanges need to be run by someone, and the fees not only keep people in jobs, but they ensure the security and stability of the network can be upheld.
- Expanded capabilities: There are more features and choices for traders and users when transaction fees are in place because the miners who set up the exchanges work harder to improve the platforms.
- Popularity of cryptocurrency: With the increased demand for cryptocurrency, traders are willing to pay fees to become invested in the marketplace. As long as there is demand, fees will be in place, and these fees can be increased when people are willing to pay them.
While there are some ways to work around paying trading fees when buying Bitcoin, there are very few options due to the reasons mentioned above.
There are a variety of different fees associated with Bitcoin transactions. While the act of trading and buying Bitcoin may not cost anything, these companies will typically charge some sort of fee along the way, whether that is on the selling end or withdrawal. These are the different costs associated with an entire Bitcoin purchase and sell:
- Trading fees: These are the fees we are trying to avoid paying that are mentioned throughout this article. Many exchanges will charge a small transaction fee every time Bitcoin is bought or sold. It is the business of the movement from buyer to seller.
- Credit card fees: Using credit cards is often a more expensive way to trade Bitcoin as there are fees associated with the credit card companies. The exchanges will place a premium on this and therefore charge you more.
- Bank transfer fees: Some exchanges may charge you for transferring money into your account from a bank. These are typically less common than other fees.
- Spread: This is the premium on the price of Bitcoin and can fluctuate. This is the difference in price that a buyer and seller want.
- Instant buy: This feature makes the money appear in your account immediately, which is not always necessary. You can have confirmation of the purchase, which may take a couple of days for funds to go through, and this will not cost you more.
These fees can add up if you do not pay attention to the site you are using. Being aware of the various fees can help you know what to look for when you decide where to purchase Bitcoin from.
Cautions to Take When Looking For Bitcoin Without Fees
We have touched on why Bitcoin charges trading fees (more than just to make a profit), and you should also consider that paying fees could be another form of protection for your assets. When trying to buy Bitcoin without fees, especially on sites you find outside of this article, you should be cautious.
These are some things to consider when trying to purchase Bitcoin without fees:
- Security and safety of assets: Lower fees mean lower costs on the end of the exchange. There may be a possibility that the security of the exchange offering zero fees is not as strong as those who do. Securing cryptocurrency exchanges and networks costs money, and fees are one of the best ways to cover these costs.
You do not want to compromise safety when it comes to your assets, especially with online currency. Paying for protection can be much more valuable than the small amount you will save in putting it at risk.
- Accessibility and easy: Sometimes, the additional fees that are set in place will take off some of the heavy lifting on your end. With fewer fees, the exchange and the instruments offered to you may be more complex and less user-friendly. This may work well for more experienced traders, but this may not be the most beneficial or worthwhile to those who are just starting to buy these financial products.
- Additional fees: We have touched on the other fees that may be associated with your Bitcoin transactions, even when there is not a trading fee. A currency exchange may advertise their 0% trading fee to attract clientele, but the hidden fees that may occur later can have expensive implications for your holdings.
- No fee advertising: We recommend staying away from sites that heavily promote zero fees because they usually suggest one of the above factors is not as sufficient. We recommend sticking to the different company’s mentioned in this article or making sure you do thorough research on the exchange you are contemplating purchasing Bitcoin through.
If you do not qualify for the zero-fee options mentioned here, use these principles when looking at other options. You can still make significant financial gains in buying Bitcoin at very low trading costs.
Tips to Avoid Paying High Fees for Bitcoin
We want to go over some tips you should avoid when purchasing Bitcoin, especially if you are new to trading. While there may be very little trading fees, you can get into trouble if other hidden fees pop up. This means that trading fees are not the only things you should be looking at when choosing your Bitcoin exchanges.
These are some things you should consider to avoid paying high fees when buying Bitcoin:
- Look out for spread: This is a fee that often goes unnoticed but can have a large impact on the value of your Bitcoin. This is essentially being mindful of the pricing of Bitcoin in one place versus another exchange. You want to get Bitcoin for the best rate possible, and a wider spread can mean you are paying more for it than you should be.
- Consider alternative currencies: There are thousands of cryptocurrencies available on the market, and these may come with lower fees than Bitcoin. While these come with greater risk in their potential value and success, investing in these alternatives can save you money on transaction fees in the long run.
- Avoid instant buys: Fees can vary depending upon when you make purchases. If you are willing to wait for your orders to be filled, which will depend on your situation, this can be a way to pay significantly less fees. If the transaction is urgent and you employ ‘instant buy,’ you will be paying a higher fee to ensure that it ends up in your wallet immediately. If sending to another wallet or to family and friends, you may trust it will get there and not need it immediately.
- Avoid using credit cards for purchase: When you use a credit or debit card, currency exchanges will often charge much higher rates. This is because the money is not physically there, and the exchange has to work with another party to complete the transaction. They will pass these fees onto you at a premium. If you can stick to paying with bank transfers, this will save you on fees.
Keep these ideas in mind when buying Bitcoin to keep your fees and costs down. They can make a large difference with larger transactions, especially when you are mindful of your habits.
Buying Bitcoin WITHOUT Fees
Our goal in this article was to provide you with the few options for buying Bitcoin without fees, but also making it very clear that these opportunities are becoming fewer and fewer. In a competitive marketplace, currency exchanges charge fees not only to run their business but because the demand is high enough to make a profit.
We recommend trying out some of these no-fee options and also looking into some of the very low fee options for buying Bitcoin. These low fees will ensure your transactions are secure and that you are working with a reputable exchange. The fees you pay with Bitcoin purchasing are far lower than potential risks for stolen or unprotected assets.