April 26, 2019

What you need to know before trading your cryptocurrency: Fees and risks

When you exchange one cryptocurrency for another, you are making a trade. This comes with potential rewards as well as risks.

If you buy one cryptocurrency and then decide you’d rather have a different cryptocurrency and exchange the first for the second, you are making a trade. For example, if you buy 1 Bitcoin and exchange the amount for Ethereum, you are trading your Bitcoin for Ether. While there are potential rewards, there are also associated risks with cryptocurrency trading, because of the market movements. If you buy Bitcoin when the price is high, and trade it for Ether which then crashes, you will ultimately lose money on the trade. If you choose to buy Bitcoin back with the Ether, you will not be able to purchase the full 1 Bitcoin.

Buying and selling cryptocurrency can be risky

One Bitcoin will not equal the same amount of Ethereum at all times, much the same as one Bitcoin will not always equal the same amount of Euro or GBP or USD at all times. This is because cryptocurrencies are volatile and prices change frequently.

A conversion from one cryptocurrency to another is a trade and it comes with the risk of losing some of your assets. Because of this, we cannot guarantee that you will have the same value after your trade.

If you do happen to buy and sell cryptocurrencies when they are at the exact same rates, there is also the maximum fee of 0.75% per trade, so if you buy €10 in Bitcoin and then immediately sell it to get your Euro back, you will not get the full €10 because of the fee.