Cryptocurrency Trading: Why Low Fees Don't Always Mean Low Costs

Cryptocurrencies such as Bitcoin and Ethereum have long been accessible to retail investors. Numerous banks and online brokers offer convenient trading via apps, often advertising low fees. But how expensive is buying and selling cryptocurrencies in practice? Professor Olaf Stotz from Frankfurt School of Finance & Management explores this question in his study "The Retail Costs of Cryptocurrency Trading".

2,088 Transactions Examined Across Six Brokers

To determine the actual trading costs, Stotz conducted an extensive field experiment between February 2025 and February 2026. Over a period of 52 weeks, a total of 2,088 buy and sell transactions involving Bitcoin, Ethereum and Dogecoin were carried out through six major brokers operating in Germany. Different transaction volumes of €500, €2,000 and €10,000 were examined. In each transaction, a cryptocurrency was purchased and then sold again just a few seconds later. This made it possible to determine how much money was lost solely through the trading process. Short-term market movements were adjusted for using reference prices from a cryptocurrency exchange.

Significant Cost Differences Between Providers

The results reveal substantial differences: The average cost of buying and immediately selling a cryptocurrency was 1.23 percent at the cheapest broker, compared with an average of 4.58 percent at the most expensive providers. Trading with the most expensive brokers was therefore almost four times as costly. A specific example illustrates the scale of these differences: For a Bitcoin transaction worth €10,000, costs amounted to approximately €126 at the cheapest provider, compared with around €445 at the most expensive. Notably, these differences can only be explained to a limited extent by the usual market spreads between buying and selling prices. Instead, the majority of costs arise from broker fees and price markups. Providers with less transparent fee structures were often found to be particularly expensive.

Market Conditions Explain Little of the High Costs

The study also examines whether larger trading volumes, significant price fluctuations or the timing of transactions influence trading costs. The findings show that these factors play a relatively minor role overall. Even larger transactions did not lead to a measurable systematic widening of the market spreads examined.

Similarly, the European Union's Markets in Crypto-Assets Regulation (MiCA) did not demonstrate a consistent cost-reducing effect during the study period. A broker's registration under MiCA was not systematically associated with lower trading costs. However, these findings do not allow for a definitive assessment of the regulation's longer-term effects.

Greater Transparency as the Key to Investor Protection

The study highlights that investors should not focus solely on advertised transaction fees when trading cryptocurrencies. What matters are the total trading costs, including potential markups on purchase prices and markdowns on selling prices. Particularly for frequent traders, these costs can significantly reduce investment returns.

For investors, brokers and regulatory authorities, the findings point to one central conclusion: Transparent and comparable total trading costs are essential for fair competition and effective investor protection in the cryptocurrency market.

Want to learn more? Read the full study, "The Retail Costs of Cryptocurrency Trading", for detailed findings and further insights ›here.