Easy Tips To Stop Wasting Your Crypto

When most of us began investing in cryptocurrencies, we had one major goal in mind.  To make a lot of money.  To make enough money to finally be able to crawl out of debt.  Perhaps to have enough savings that we would no longer need to live paycheck to paycheck.  For others, the goal would be to have a nice nest egg to put toward retirement.  And for the remainder of us, the goal was to be able to retire early. Whichever one fits you, the goal was still to accumulate and make as much money as possible.

But that is where the problem comes in.  When most of us enter the cryptocurrency markets, our main focus is only on making money.  Often we completely ignored conserving.  If you are an avid crypto user, you will rack up fees here and there along the way.  This is normal and we think nothing of it.  However, years down the road after you have been in the market for a full cycle or two.  Those small expenses that you spent without much thought, have now done a 100x due to those cryptocurrencies significantly appreciating in value.  All of a sudden, those few dollars you were spending on swaps, fees, and transactions are now worth thousands of dollars.  Now that is a number that most of us would care deeply about.

In this article, we will go over basic tips that will save you a bit today but could save you greatly in the future.  Who knows, it might just be the difference maker in your portfolio.

1) Use Cheaper Exchanges / Advanced Trading Options

If you are anything like me, when you first began buying Bitcoin, Ethereum, or any other crypto, it is likely that you bought on Coinbase.  Often it is the exchange that is most recommended to new people entering the space.  The UI is clean and easy to use and understand, and it has a reputation for being one of the safer places to keep your funds.  The problem with using exchanges like Coinbase is that they charge incredibly high fees.  For purchases of just $10 worth of Bitcoin, they would charge you $0.99, a nearly 10% fee.  The fee gets better with the higher amount that you purchase, but the fees are still much higher than other crypto exchanges out there.  

As I mentioned before.  Missing out on 10% of crypto purchases here and there might not hurt much.  But, if you do it often and for several years the amount of crypto that you will have lost out on will be staggering.  Once the market goes through a bull cycle, you will be left with a lot of regrets.

There are easy solutions that you can do to avoid this.  If you are insistent about using the Coinbase app, instead use the advanced trading option.  That same $10 crypto purchase will now only charge you a few cents as a fee.  There are other options as well.  Using cheaper apps such as Binance or Binance US which currently are not charging any fees to buy Bitcoin.  The point is that you need to search out exchanges that are reputable but aren't charging an arm and a leg for fees.  Just doing this alone, could affect your portfolio by hundreds of dollars, and eventually thousands of dollars.

2) Limit Your Crypto Sending Transactions

When I first got into crypto I was obsessed with constantly managing my portfolio.  I would make my purchases and immediately send a portion of that crypto into cold storage, and send the remaining amount to 3rd party lenders to make a passive income.  That might sound like a good idea and something that we all want to do. But, the problem is that the purchases that I was making were quite low.  Also, the amount I was sending to 3rd party lenders was low.  Just to be able to earn by the sending fees would have taken the whole month.  

What this all meant was that I was needlessly sending my funds when it would have been much smarter to wait until the amount of crypto was large enough to warrant the transaction.  While we are all taught "not your keys, not your crypto."  In my situation, constantly sending amounts that were less than ten dollars wasn't the best idea.  During the peak of the bull cycle in 2021, I went back and looked at some of the transactions I was doing.  Originally they cost about $0.25 to send.  But prices had appreciated so much that some of those fees were now $5-$10+.  Numbers that will only continue to increase in the future.  I have now learned to be more patient and batch my sending transactions until the amounts are larger. 

Another thing that could help you to save on sending fees is to wait until fees are lower.  Perhaps the ETH network is really congested now causing fees to soar.  Just having the patience to be able to wait until the situation calms down, would be able to save you a lot on sending fees.  Also, sending fees tend to be cheaper during Asian trading hours compared to Western hours.  Sending transactions during off-peak hours is another method that could help to save on fees.

3) Be Careful of Exchange Withdrawal Fees

While it might not always seem like it, one thing is always certain with cryptocurrency exchanges.  They always find a way to make money.  It might be as straightforward as fees when you buy or sell crypto on the exchange.  But there are also sneakier ways where they make money that most people aren't thinking about upon purchasing.  The first is through slippage.  For example, let's say that the price of Bitcoin is $19k on Binance and Coinbase.  However, on other exchanges, Bitcoin might be listed as $19,200, significantly higher.  This is extremely commonplace at places like BlockFi and other similar services.  When you are selling crypto on these services it works in the exact opposite.  Instead of the $19.200 buy price, they are now offering an $18,800 selling price.  Making money on both sides.

There are other ways that exchanges make money as well.  One of the most popular methods is by charging withdrawal fees. Depending on the exchange that you are using, some of the fees can be quite high.  Depending on the crypto, even charging more than $25 in that specific coin to withdraw.

What this all means is that if you are using these services, you need to think very carefully about your withdrawal strategy.  It wouldn't make sense to withdraw each time you were buying unless they were significant amounts. That strategy would end up costing you a fortune.    I cannot stress enough the importance of using a crypto exchange that is not only reputable but also fits into your buying strategy.

4) Frequency of Crypto Purchases 

While this tip could technically fit into choosing the right crypto exchange category, I felt it was important enough to dedicate its own category.  When I first began investing in cryptocurrency I was really excited about it.  As soon as I got any extra cash I wanted to immediately invest that into crypto.  This resulted in me making many crypto purchases. This might sound great as I was able to accumulate a lot of crypto.  But, in the beginning, I was using exchanges that charged high fees.  I was sometimes making purchases every day and even multiple times a day.  This resulted in me wasting a lot of money.  If I had been more patient and spread out my buys, I would have been able to accumulate much more.  Be conscious about the exchange that your using and the fees that they are charging.

5) Staking Fees

If you have been following my articles for a while, you will already know how passionate I am about making a passive income with my cryptocurrency. One of those methods has been by staking.  Throughout the last year, I have been heavily staking Ethereum.  However since I don't stake 32 ETH to run my own validator, that means I need to use other services to be able to stake my ETH.  Some of those staking services that I have used have been by exchanges like Kraken, Coinbase, and Binance.  They are all convenient to use, but they differ in one major category.  The fees that they charge for staking.  You are probably beginning to see a trend here in this article about exchange fees.

While Coinbase might be the easiest of these options to begin staking with, they also charge the most.  Coinbase charges users 25% of their staking rewards to use the service.  Other places like Kraken are a little better but still charge around 15%.  Binance is the best in this regard and charges nearly 0% fees for staking.  

Once again choosing the correct crypto exchange to use will be one of the most important things that you will do.  Would you rather give up 25% of your staking interest, or would you rather keep most of it?

None of these methods of how to save crypto are earth-shattering and are probably all things that many of you already knew.  But for the new people to crypto, it could be very useful information. Saving dollars here and dollars there.  Eventually adding up to hundreds or thousands of dollars is something that is very valuable information.  As I stressed during the article, choosing the correct crypto exchange to use will be one of the most important decisions you make and the best way to save on fees.  When deciding on which one to use, there are several factors that you need to consider.  The country you're living in, how often you'll be buying and withdrawing, and what services you are planning on using, such as staking.  Once you begin to feel more comfortable in the crypto space, you'll probably find yourself using more than one exchange.

How about you? What tips do you have to save your crypto?

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As always, thank you for reading!