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K4 of 7 · 6 min

Fees, funding, and the costs nobody mentions

The short version: The price you see is not the price you get. Four separate things take a cut. Know all four before you move real money.

1. The spread

At any moment there are two prices: what buyers will pay and what sellers will take. The gap between them is the spread.

You buy at the higher one and sell at the lower one. So the instant you buy, you are slightly behind. That is normal, not a trick.

The spread is small on big markets like Bitcoin. It is wide on small ones. Wide spreads are one reason small coins are harder to make money on than they look.

2. Trading fees

The exchange takes a cut of every trade. Both directions. Buying and selling are two separate fees.

Fees are usually shown as a small percentage. On a $500 trade a fee might be a dollar or two, each way. That sounds like nothing. Do it forty times a month and it is not nothing.

This is the real reason trading more is bad for you and good for everyone selling you tools.

3. Slippage

You press the button at one price and get filled at a slightly different one. The market moved while your order traveled.

On quiet markets this is pennies. In fast conditions, exactly when you feel most urgent, it can be much worse. Urgency is expensive.

4. Moving money in and out

Getting dollars in can cost something depending on how you send it. Getting them out usually costs something. Moving crypto between places costs a network fee that has nothing to do with the exchange.

Check these once, write them down, and stop being surprised by them.

And the one people forget entirely: tax

In many countries, including the US, selling or swapping crypto is a taxable event. Every single time. Not just when you cash out to your bank.

That means a year of small trades can create a paperwork problem out of proportion to the money involved.

Keep records from day one, date, what you did, the amounts. Exchanges can usually export this. Doing it later, from memory, is miserable.

We are not tax advisers and this is not tax advice. If real money is involved, ask someone qualified in your country. Ask them specifically: what counts as a taxable event for me, and what records do you need from me?

← K3K5: Order types, in plain words →

Educational content only. Not financial, investment, tax, or legal advice. Rashad Global is paid nothing by any exchange, broker, or tool named on these pages, and nothing here is a recommendation to use any of them, or to buy, sell, or trade any asset.