Nobody likes cryptocurrency exchange fees. However, cryptocurrencies aren’t charities: they’re for-profit businesses, and they need to make money somehow. So fees are standard across the industry.
Fortunately, there’s a new way to avoid paying Coinbase fees. As discovered by YouTube’s Coin Mastery, the method allows you to never pay Coinbase fees again – and it’s surprisingly easy.
Nobody Likes Coinbase Fees
Coinbase fees are considered relatively high. The platform charges 4% for credit card deposits, and similar fees for bank transfers. They know that their exchange attracts a lot of newbie cryptocurrency users, and getting money from fiat into cryptocurrency is expensive.
That’s why if you sign up for Coinbase and try to buy $200 USD of bitcoin, you’ll pay a fee of about $8. You’re paying 4% to buy Bitcoin with your credit card.
This is why Coinbase is a multi-million dollar company. They earn an enormous amount of money because they’re a convenient, newbie-friendly way of buying bitcoin. If you’re willing to put in an extra step, however, you can pay absolutely no fees.
How It Works
There’s a better solution: go to GDAX.com, which is owned by the same company that owns Coinbase. GDAX and Coinbase actually share the same back-end. So when you buy bitcoin on GDAX, you’re buying the exact same bitcoin from the exact same source as you would with Coinbase.
There’s a reason Coinbase doesn’t advertise this (aside from the obvious fact that they want to make more money): GDAX’s bitcoin purchasing process is less user-friendly. However, if you don’t mind putting up with a bit of a minor hassle, then you’ll pay 0% on your bitcoin transaction (yes, you’ll legitimately pay a 0% fee when buying bitcoin).
So you link your bank account with your Coinbase account. Then, you sign up for GDAX and go through their verification process. Once your bank transfer is in your Coinbase account, you can instantly transfer it to your GDAX account (again, they share the same back-end).
Once you have access to your funds from your GDAX dashboard, you can go to the left-hand side of the screen and place a market order, where you buy your bitcoin at the market rate. However, Coinbase charges a 0.3% fee for market orders.
If you want to totally avoid fees, then you click the Limit button. With a Limit order, you manually put in what your buy bid would be.
Which price should you pick? Look at the scrolling list of orders, then pick a price in the middle. Put that price in, and you’ll pay zero fees – not a single fee, commission, or charge. You’ll buy bitcoin at that exact price. It’s that easy.
Step By Step Guide
Here’s a clearer version broken down for you:
- Step 1) Sign up and complete verification with Coinbase
- Step 2) Link your bank account to Coinbase and deposit money from your bank into Coinbase
- Step 3) Sign up and complete verification with GDAX
- Step 4) Transfer money from Coinbase to your GDAX account; it should appear instantly (they share the same back-end)
- Step 5) Go to GDAX and make a trade using the trading window on the left-hand side of your screen; make a limit order, and you’ll pay no fees whatsoever (if you make a market order, you’ll pay a 0.3% fee)
Ultimately, this works best for American users who can deposit USD from a US bank account. Otherwise, international users aren’t saving much on fees, and will still pay foreign exchange fees while being unable to access free bank account deposits.
All credit for this hack goes to Carter Thomas and his Coin Mastery YouTube video.