This One Simple Crypto Trading Mistake Can Cost You Thousands

Crypto trading or investing can be a lucrative endeavor, but it can also lead to big losses. The main reasons for the latter are lack of strategy and discipline. But trading or investing can also result in lots of missed profits if you’re not careful.

How can this be possible?

The answer is simple: by picking the wrong crypto exchange to do your trading or investing. High fees, slow transactions, or even platform interface can sometimes lead to missed profits or losses. 

Sounds impossible? It’s not. Let’s go through some examples and see how the tiniest changes can have a big impact on your results.

How Fees Affect Your Profits

For our first example let’s say that you decided to invest $100 in Bitcoin back in 2011, when the price of the coin was just $1. Back then, you didn’t have many (or any) comparison sites to find out which was the best crypto exchange.

You decided to go with platform A, which had a transaction fee of 5%. This means that if you invested $100, you would have received 95 BTC.

Now let’s take that 95 BTC and sell them back in 2021, at $63,000 per coin. The total value is $5,985,000 but you end up receiving ‘only’ $5,685,750. Still, not a bad return for a $100 investment made 10 years ago. Warren Buffet would be proud of you.

Let’s pretend that before you bought the coins, you found a comparison website that told you that platform B has smaller fees: 2%. So you went ahead and bought Bitcoin using it. This means that you bought 98 BTC with your $100.

If we go back to early 2021 and trade those 98 BTC using platform B, you would get $6,050,520. The value of 98 BTC is actually $6,174,000, but you have to pay a 2% fee.

Now let’s compare the 2 results. Going with platform A ended up costing you $364,770 in missed profits. That’s a lot of money. But what if instead of $100 you would have invested $1,000 or more? 

How Transaction Speed Can Reduce Profits

Now, let’s pretend you are a day trader. Here, transaction speed is sometimes more important than fees. Let’s see how a slow platform can impact your profits.

Let’s pretend that you just signed up with platform C and deposited $1,000 to start day trading. You plan to make 3 transactions per day use your entire capital (huge mistake) every time.

Because platform C is rather slow, by the time your trade is processed, you end up losing 0.01% of your profit.

At first glance, that might not look like much but what would happen after an entire year of trading? Assuming that you make 3 trades per day for 300 days, you end up missing on profits amounting to 9% of your entire capital. Would Warren Buffet be as famous today if his yearly returns would be 9% smaller? Probably not.

Your Trading Requirments are Unique!

Now that you know how the wrong crypto exchange can lower your profits, let’s take a look at the solution. Using a comparison website could help you make a better choice. Unfortunately, many of them aren’t always the solution.

Some comparison websites, after reviewing crypto exchanges, offer suggestions for certain categories of traders or investors. For example, you might read something like “best for beginners,” “best for experts,” “best for small accounts,” etc.

So, what should a beginner with large capital choose? Of an expert with less available capital?

This is where Sortter comes in! We believe that each trader or investor needs to use the best crypto exchange for him, not one that is generally suited for people like him. After all, everyone is unique. The recommendations should be unique too. 

For this very reason, we created an onboarding questionnaire to help you find the best platform for you.

Find The Best Exchange for You!

Before starting your journey into the crypto world, take a few minutes to find the best crypto exchange first. Visit our website and answer our questions, then see how our complex algorithm does its magic. It shouldn’t take more than a couple of minutes. 

Find the best crypto exchange right now!

Guest article written by: Sortter

Leave a Comment