One common and effective tactic for traders is to move currency between different exchanges.
This process is known as social arbitration or transfer between exchanges without the need for intermediaries, such as bank transfers, which move digital assets from one exchange to another. Learn how it works and what to keep in mind with segment specifications.
Transferring crypto between different exchanges:
To transfer cryptocurrency between your exchanges, you first need to generate a deposit address on the receiving exchange. On the sending exchange, you are required to use this address as the destination of your withdrawal. For instance, when transferring funds from Bitget to another exchange, you must establish a deposit address on the receiving platform, which you must then input when starting the withdrawal process in Bitget. Focus makes this part easy, but it requires proper execution, so take your time.
Crypto Transfer Costs:
There are a lot of costs involved in transferring cryptocurrency, just like bank transfers. Quizzes ask readers to calculate the benefits and costs of what are called “network” or transaction fees, which exchanges normally do not charge. Instead, the miners or validators, who process and confirm transactions on the blockchain, receive this payment. These fees depend on which specific cryptocurrency you are transferring and what the current network congestion is. It is crucial to monitor these charges closely to avoid any unexpected charges. Some exchanges may also charge withdrawal fees, so it is a good idea to compare these costs between platforms.
Transfer fees are variable.
Cross-exchange transfer fees can vary greatly. There may be small fees for transfers on some exchanges, or they can enter and leave us without collecting anything. Furthermore, the blockchain where the cryptocurrency moves attaches a network fee, typically paid as either “gas” or “mining”. Understanding the timing of these fees is crucial, as it can impact your trading and expenses.
Choosing the Best Cryptocurrency for Transfers:
Consider both the most suitable coins and their speed while choosing the one to which you will transfer. Big-name cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) can scale with the network but will be slow and expensive to use when they get busy. In contrast, cryptocurrencies like Ripple (XRP) and Stellar (XLM) prioritize speed and minimize transaction costs when transferring funds between exchanges.
Bitcoin Cash (BCH) and Litecoin (LTC) are also common options, as they have faster transaction times than Bitcoin and lower fees. We created BCH as a more scalable version of Bitcoin, while we designed LTC as a faster, more affordable option.
Supported Cryptocurrencies for Exchange:
Some cryptocurrency exchanges support all cryptocurrencies. For instance, Coinbase may not support or restrict the usage of some cryptocurrencies, such as XRP, while Bitget supports a wider range of cryptocurrencies, including those with lower fees and faster transaction speeds. Before starting your transfer, make sure that the sending and receiving exchanges share these pairs.
Avoiding the large fees of directly transferring cryptocurrencies from a wallet onto exchanges when your assets are not in use is a quick and practical solution.
Trading Cryptocurrencies: Traders can optimise their transactions by understanding the process, associated fees, and which cryptocurrencies are best for transfers. Double check everything and think through just how much time different exchanges might take to process an incoming transfer in order to make your experience as seamless and inexpensive as possible.
