Cryptocurrency Exchanges: Sorting Through Ambiguous Fees to Find the Best Value
Today, we will be comparing the exchange rates of three Canadian fiat-cryptocurrency exchanges: Coinsquare, QuadrigaCX and LinkCoin. The goal of which is to teach investors how to look beyond simple transaction fees when considering which exchange to purchase digital assets through. Many fees are involved in the trading process and if you do not pay attention, they can really eat away at your investment.
Since neither Coinsquare or QuadrigaCX were overly transparent about their fee structure, we purchased $1000 CAD of ETH on Coinsquare, QuadrigaCX and LinkCoin and compared the results. After tabulating all the data, the final outcome was quite surprising.
First, let’s look at the purchase price of ETH across all three platforms. To standardize the information used in this analysis, all the data was retrieved on December 14th, from 15:27–15:29
Secondly, let’s look at all fees associated with using these exchanges
When using OTC exchanges like LinkCoin, users are trading with another person directly, they are not using the exchange as a intermediary that will match them with a buyer/seller. So rather then depositing fiat onto the exchange, as is required on QuadrigaCX and Coinsquare, LinkCoin customers send the money directly to the person through a third party payment provider like Interac e-Transfer. Thus, users are not required to deposit fiat onto our platform to begin trading. This convenience means that LinkCoin does not charge its customers any deposit fees.
Let’s now calculate how much ETH we can purchase based on the price in Table one, and the fee structure illustrated in table two. Again we will be using 1000 Canadian dollars on each exchange.
Coinsquare:
- Deposit Fiat: CA$1000 / 1.025 = CA$975
- Use this amount of fiat to purchase ETH: CA$975 * .00837176ETH/CAD = 8.16 ETH
- Withdrawal ETH: 8.16 –.005 = 8.155
- Therefore using $1000 on Coinsquare will yield 8.155 ETH
QuadrigaCX:
- Deposit: CA$1000 / 1.025 =CA$975
- Use this amount of fiat to purchase ETH: CA$975 * (0.8082895/100) = 7.88 ETH
- Withdrawal ETH: 7.88 – 0.0 ETH = 7.88 ETH
- Therefore using $1000 on QuadrigaCX will yield 7.88 ETH
LinkCoin:
- Deposit Fiat: $1000 (No Fees)
- Use this amount of fiat to purchase ETH: 10* 0.8864462 = 8.86 ETH
- Withdrawal ETH = 8.86ETH - 0.0095= 8.8505 ETH
- Therefore using $1000 on LinkCoin will yield 8.8505 ETH
Therefore, after evaluating all exchanges, the associated costs with using each platform can be found here:
Although centralized exchanges like Coinsquare and QuadrigaCX create an efficient trading experience, where all you have to do is click one button to execute the trade. LinkCoin compensates for the added steps in our process (having to pay for the funds through a third party) by creating a more affordable trading experience. In the example above, people trading on LinkCoin were able to purchase and withdraw 0.695 more ETH then if they used Coinsquare, and 0.97 more ETH then if they were using QuadrigaCX. For cryptocurrency investors who prioritize value over convenience , there really is only one Canadian exchange that deserves your business, and that exchange is LinkCoin.
