Choosing the best platform to invest in cryptocurrency is important. This is not only related to buying/selling fees, but also annual fees, rebalancing fees – and overall, the safety of your crypto on an exchange. These costs wield a substantial influence on the long-term profitability of your investment. This post looks into the five biggest crypto platforms – EasyCrypto, Luno, VALR, AltConTrader, and Revix (which was recently acquired by Altify). We’ll be checking their fees to find the best ones.
Crypto Index Funds and Cryptocurrency Bundles
Crypto index funds and cryptocurrency bundles allow investors to gain exposure to the overall cryptocurrency market with a single investment. Think of bundles as the equivalent of an ETF in the stock market. For example, EC10 by EasyEquities tracks the biggest 10 cryptocurrencies by market capitalization.
By investing in a crypto bundle or index fund, you do not have to try to choose individual winners and can benefit from price movements across the entire crypto economy. On the other hand, if you’re a crypto purist, you might want to only buy Bitcoin.
Maximize Your Crypto Investment Potential: Mastering Fees, Bundles, and Rebalancing
Before we dig into the fees, we need to discuss terminology. There are some big words that brands use to disguise fees:
- Platform fees – Annual or monthly charges by the crypto exchange or platform for maintaining an account and accessing trading features.
- Crypto Bundles – is a package of cryptocurrencies that can be purchased in a single transaction, providing a clear, pre-defined, and transparent way to own a diversified basket of cryptocurrencies
- A bundle management fee is a charge for the management of a crypto bundle
- The tracking fee refers to a charge levied annually as a percentage of the value of the bundle when purchasing it with funds from your wallet.
- Buy/Sell fees – A fee is charged when you buy or sell cryptocurrency or a crypto bundle.
- Rebalancing – the process of conducting trade adjustments within an investment portfolio to readjust the allocation of cryptocurrencies by a predefined or desired distribution.
- Rebalancing period – the index that tracks a bundle can change by the minute, however, a broker will decide how often they want to rebalance. The period is how often they choose to do this.
- Rebalancing fees – Whenever a bundle index is rebalanced, the broker buys and sells crypto on your behalf. There is a fee that they charge when they rebalance – on top of the spread.
Note that companies can charge you special fees if you want to move your crypto away from them, or if you want to withdraw your money (ZAR or USD) from their coffers. Always check their latest fees!
Crypto fee comparison – South Africa
|2% per annum
|2% per annum
|Every 3 months
Let’s unpack these fees – and more details about the providers – get your cup of coffee ready!
EasyCrypto fee structure
EasyCrypto prides itself on low fees to make cryptocurrency accessible to newcomers. The platform offers a low-cost solution for crypto investments. EasyCrypto charges a monthly platform fee of 25 Rand, called a “Thrive Fee” (which can be avoided by dancing the can-can on your head – more details on my Twitter post about it).
Trading fees stand at 0.33% for buying or selling bundles within the platform. Additionally, an annual bundle custody and rebalancing fee of 2% is charged on bundles. The rebalancing fee is included in this. There are multiple bundles and cryptocurrencies to choose from.
Breaking down Luno’s costs
Luno offers a cryptocurrency platform for investors with no platform fees. It’s nifty if you want to transfer cryptocurrencies to other people or just leave it there for the long run. I do think that for larger amounts, cold storage would be a better option!
If you’re buying a bundle, then there is an annual tracking fee of 2%. Rebalancing of the bundle fee is included in the 2% tracking fee. Rebalancing occurs automatically every quarter to maintain the target allocations, providing investors with exposure to their desired crypto strategies over the long term.
VALR trading charges: what you need to know
VALR has been fairly quiet on social media. They sell cryptocurrencies, but not bundles. Therefore, the fact that there is no management fee echoes their positioning. A 0.60% transaction fee applies to all cryptocurrency buy and sell orders.
Unpacking AltCoinTrader’s fee components
AltCoinTrader is also available in South Africa. It offers a straightforward crypto trading platform with a 0.75% trading fee.
Revix (Altify) pricing
Revix was recently bought by Altify. It’s very similar to the other platforms, but their fee structure is a bit more complex. Buy and sell trading fees range from 0.25% to 0.50% depending on the level you are on, with a minimum trade fee of R5 to R10. Additionally, Revix (Altify) offers free deposits and charges a bank withdrawal fee of R5 to R10.
Revix also has bundles – a monthly rebalancing fee of between 0.09% to 0.17% is charged, with the rebalancing happening monthly. Revix is by far the most cost-effective exchange for long-term investors in crypto bundles and single cryptocurrencies.
Few of us buy coffee only based on price. We tend to think about convenience, and centralisation of all our assets into the same company (such as EasyEquities/EasyCrypto). However, price is an important factor, especially if you want to store your cryptocurrency offline.
So whether you buy crypto from Easy Crypto, Luno, VALR, AltCoinTrader or Revix – each presents unique fee structures and features catering to diverse investor preferences.
Do your research before diving into crypto – don’t spend your life savings on this, as things happen. Ask the people who lost everything when MtGox failed. But having a well-diversified portfolio isn’t a bad idea.