Crypto Spreads vs Trading Fees: Which Costs You More?

When trading cryptocurrencies, your profitability isn’t just determined by the market’s direction, it’s also shaped by hidden and visible costs. Two of the most important (and often misunderstood) expenses are spreads and trading fees. While both impact your bottom line, they do so in different ways, and one can easily outweigh the other depending on your trading style and the platform you use.

In this guide, we’ll break down what spreads and trading fees are, how they’re calculated, and when one might cost you more than the other so you can make better decisions to maximize your returns.

What Are Crypto Spreads?

The spread is the difference between the highest price a buyer is willing to pay (bid price) and the lowest price a seller is willing to accept (ask price).

• Example: If Bitcoin’s bid price is $30,000 and the ask price is $30,010, the spread is $10.

• Percentage Spread: (Spread ÷ Ask Price) × 100 → (10 ÷ 30,010) × 100 ≈ 0.033%.

Why Spreads Matter

• Hidden Cost: You buy at the ask and sell at the bid, so spreads effectively act as a built-in transaction cost.

• Liquidity Signal: Tight spreads usually indicate high liquidity and active trading; wide spreads suggest lower liquidity and higher costs.

• Impact on Short-Term Trades: For scalpers and day traders, spreads can eat into profits quickly because they apply to every trade, regardless of outcome.

What Are Crypto Trading Fees?

Trading fees are explicit charges set by exchanges for executing trades. They’re usually a percentage of the trade value and vary depending on whether you’re a maker (adding liquidity with limit orders) or a taker (removing liquidity with market orders).

Common Fee Structures

• Maker Fees: Often lower than taker fees (or even zero on some platforms) to incentivize liquidity provision.

• Taker Fees: Typically higher because they consume liquidity immediately.

• Tiered Models: Some exchanges reduce fees for high-volume traders or token holders.

Spreads vs Fees: Which Costs More?

The answer depends on your trading habits, market conditions, and the exchange’s pricing model.

When Spreads Cost More

• You trade in illiquid pairs with low volume.

• You place market orders frequently.

• The platform doesn’t offer tight spreads on major pairs.

Example: If BTC/USDT spread is 0.1% and your fee is 0.05%, you’re paying twice as much in spread as in fees per trade.

When Fees Cost More

• You trade high-volume, tight-spread markets.

• You use taker orders exclusively.

• Your platform charges high fees without offsetting benefits.

Example: If BTC/USDT spread is 0.01% but the taker fee is 0.1%, the fee is 10× the spread cost.

How to Reduce Both Costs

1. Choose an Exchange With Zero or Low Spreads

Your trading costs start before you even pay a fee through the bid-ask spread. Selecting a platform that offers zero or ultra-low spreads on major pairs can significantly reduce these costs, especially for active traders and high-frequency strategies. For example, Flipster offers zero spreads on major perpetual pairs like BTC, ETH, SOL, XRP, and more, helping you enter and exit trades more efficiently.

2. Optimize Your Trades

Large market orders in illiquid trading pairs often lead to wider spreads and higher slippage. Instead, break large positions into smaller chunks, use limit orders to control entry and exit prices, and prioritize assets with deeper order books. This minimizes the hidden cost from price impact and helps you maintain tighter trade execution.

3. Trade During Peak Liquidity Hours

Liquidity and therefore spreads vary throughout the day. The overlap of the US and European trading sessions typically brings the highest trading volume, tighter bid-ask spreads, and better execution speed. By timing your trades during these windows, you can capture more favorable pricing and reduce both spread and slippage costs.

4. Monitor Spread-to-Fee Ratios

Spreads can sometimes exceed platform fees, especially in less liquid markets. Track your spread-to-fee ratio for your most-traded pairs. If spreads are consistently wider than the fees you’re paying, consider switching to more liquid trading pairs or migrating to a platform that offers tighter spreads. This ensures that transaction costs don’t quietly eat into your profits.

The Bottom Line

For crypto traders, both spreads and trading fees matter but their relative impact depends on your trading style, asset choice, and exchange.

• Long-term investors may feel the pinch more from fees, especially if rebalancing often.

• Active traders in low-liquidity markets often lose more to spreads than to fees.

Trade Smarter on Flipster

By selecting a platform with competitive pricing like Flipster’s zero-spread major pairs and ultra-low fees, and adapting your trading strategy to minimize both costs, you can keep more of your profits where they belong: in your account.

Sign up on Flipster now and take control of your trading costs.

Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with a significant risk of loss due to its high price volatility, and is not suitable for all investors. Please refer to our Terms.