I tweeted the other day that my bank received a refund from a retailer but, due to the account being in GBP (UK) and the retailer trading in zł (Poland), the refund lost a lot of value. Over £170 to be exact on a purchase that was for over £2,500. Sure, the £170 is a mixture of exchange rate costs and fees, but a straight reversal of a transaction should not incur such costs and punitive rates.
I made the comment that in future I’ll do all my buying with BTC (bitcoin), as this would incur zero fees.
Or would it?
Actually, I do most of my trading via Coinbase, and they charge fees. In fact, they charge up to 5% if you take on board all charges, although the average commission is 1.49%. Wow! That’s going some, but it’s because Coinbase is one of the oldest and largest regulated exchanges out there (see here for more details).
It’s also one of the first crypto exchanges to float, and rose to a valuation of $85 billion on its first day of trading, as the share price rose to over $329 per share (it’s trading at $340 a share). It’s easy to use and simple to deal with, and offers financial insurance schemes on trading, unlike unregulated exchanges (MtGox).
There are actually lots of exchanges out there, and working out which is best for you is not easy. There are lots of sites that also look into them all, and give advice of which to use. Yet these sites often only look through a narrow lens.
Generally, rising to the top alongside Coinbase is eToro, a company I like a lot since meeting its founder and CEO Yoni Assia years ago. Originally a site for social trading, it has expanded over the years and now offers lots of crypto trading as well as traditional stock and equities trading. If you are into crypto, the costs are negligible - eToro charges no fees for sending or receiving transactions – but they do charge a conversion fee of 0.1%, set to market rates.
Binance is popular, particularly for US traders, because it is also low-cost. In general, fees are 0.1% on spot trading and 0.5% to buy or sell. The list goes on.
Nevertheless, you need to consider why and what you are buying cryptocurrencies for: to hold (hodl) or to use. Use? Who uses crypto? Well, I do. In fact, I used the Binance app to buy my Watford football shirt and similarly used Coinbase to buy a Ethereum domain.
Thing is that I find all of these services are not as easy to use as some claim, as posted on twitter the other day:
I got lots of feedback on this one from the crypto folks telling me to use everything from CitizenKey to a Cryto credit card. To be honest, I posted that in part to see if everyone would mention the one app I do use for spending crypto: Mode. Why? Zero fees and use with ease.
Mode have made it their mission to remove the barriers associated with Bitcoin, and they're doing a pretty good job. First off, their app is so easy and simple to use that even those new to Bitcoin can intuitively navigate their way around. They're also playing their part in reducing global emissions by pledging to be net zero by 2030, so all Mode's users can grow their Bitcoin safe in the knowledge that they are not harming the environment. Now, the most interesting part!
They've taken on board the concerns surrounding rising fees and have completely scrapped their trading fees from 0.99% to 0%. Absolutely zero fees when you buy or sell Bitcoin, with Mode - which makes them one of the most competitive (if not the most competitive) apps in the market. Seems like a pretty good gig to me.
Full disclosure: I am on the Mode advisory board, so I am biased, but hey, if it works don’t shirk.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...