The problem with “no commission” trading apps — or, why our pricing is now fully transparent
Newton is Canada’s first no-fee cryptocurrency trading platform. Buy and sell ETH, BTC, and LTC at some of the best prices in Canada.
When we launched Newton in 2018, we set out to crush the ridiculously high fees that were endemic in the Canadian cryptocurrency landscape.
There were deposit fees as high as 5% and trading fees of 0.75%, not to mention high spreads across the board as exchanges and brokers tried to squeeze as much as they could out of their customers.
By acting as a market-maker, we were able to remove fees that would typically go to an intermediary broker. We also worked hard to establish top-tier banking relationships to keep our payment processing costs low.
As we’ve continued to grow rapidly on the promise of no-commission trading, other companies have followed suit by slashing fees and claiming to offer no-commission trading as well. These are positive first steps.
But in a world where the entire cost is baked into the spread, how do you know what you’re really getting? Average prices don’t tell you much — with the same average price, one company might have prices that are 0.5% above the average, whereas others might charge 3%. Customers don’t have enough information to understand the true costs of trading.
And while Newton has genuinely reduced total trading costs by cutting out intermediaries, others have have simply widened their spreads to make up for lost fee revenue. This is not where the industry needs to go.
To combat this lack of transparency, we now publish our buy and sell prices directly on our home page. These prices update every 10 seconds, and represent the price you’d actually get if you were to trade on Newton at that moment. No hidden fees.
Moreover, these prices are good for volumes up to 3BTC (or the equivalent amount of ETH or LTC). You can execute orders above 3BTC, however the spread will widen by about 0.1% in those cases.
I’d strongly encourage other cryptocurrency platforms to follow suit and list their spreads, as well as the amount of volume customers can trade at that spread.
It’s not just the right thing to do for customers — it will show regulators that we’re serious about fair and transparent markets.
