Over the last two years, the ways by which an investor can invest in crypto assets has increased drastically. For example, we have seen the launch of several crypto asset exchanged-traded products and two regulated futures markets; moreover, companies like Tagomi, Bakkt, ErisX, E*Trade, and Fidelity are all planning to expand their offerings over the coming months.

Each different venue for investing in crypto assets comes with its own unique benefits and downsides – yet thus far there has been little literature which compares the trade-offs. This research note focuses on two venues for getting exposure to crypto assets – crypto asset exchanges and exchange-traded products (ETPs) – and compares the cost involved with each.

Crypto Asset Exchanges

When a retail investor attempts to invest in a given crypto asset through an exchange they face three primary costs: trading fees, withdrawal/deposit fees, and bid-ask spreads. Of these three costs, the spread is the only one that can be easily standardized amongst exchanges. To begin we compare self-reported spreads for the BTC/USD pair.

It is easy to see that certain outlier exchanges (for example, Lykke, DSX, and Bitflyer) skew the results slightly. It should be expected that the less established exchanges with shallow order books and less volume would have larger spreads – as the data shows. However, our spreads were calculated based on 24 hours worth of data which may not be an accurate representation of the data over longer time periods.

We would expect more reputable and popular crypto asset exchanges to have much tighter spreads and the data supports this hypothesis. The chart below plots spreads of the Messari “Real 10” exchanges where the BTC/USD pair trades (excluding Bitfinex).

Gemini and Coinbase Pro have noticeably lower spreads than the rest of the exchanges within the “Real 10”. However, Coinbase’s fiat-to-crypto retail service has much higher spreads presumably due to the spread fee of 0.5% that the company charges for all buy and sell transactions. Coinbase’s fiat-to-crypto retail service shares similarities with the service that a broker-dealer like TD Ameritrade would offer – with the more simple user experience ostensibly justifying the much higher fees. During the sample time frame, the bid-ask spread for the Coinbase retail service was 1.03% – much higher than most other exchanges and other products such as exchange-traded products.

Below we compare trading and deposit/withdrawal fees among the same six exchanges.

Coinbase Pro generally leads with the lowest fees across the board – being one of the few exchanges not to charge ‘Maker Fees’. Put simply, Maker Fees are paid when an investor adds liquidity to an exchange’s order book – such as by placing a limit order below the market price when buying or above the market price when selling. Taker Fees are paid when an investor removes liquidity from the exchange’s order book by creating a trade order at the current market price.

Exchange-traded Products

The primary fee involved in crypto asset exchange-traded products is the expense ratio – the fee charged by the investment company to manage the funds of investors; both currently trading Bitcoin exchange-traded products have the same annual expense ratio of 2.5%. Exchange-traded products also have spreads which an investor must factor in. However, due to the ability of Authorized Participants (APs) to create and redeem shares of the ETP in situations of excess demand and supply, we would expect spreads over time to be much more stable than that on a crypto asset exchange.

Below we have plotted the spread over time for the 21Shares Bitcoin ETP.

The spread for the ETP has been relatively stable and, due to the mechanics of the product, will likely to continue to do so. Though, one must note that for any exchange-traded product one invests in through a broker-dealer there will be brokerage fees which must also be accounted for.


As more products which provide exposure to crypto assets are launched, it is important for investors to understand the relative trade-offs behind each kind. This research note has offered a brief insight into how great the variation in fees is between different crypto asset exchanges – spreads, trading, and withdrawal/deposit fees to be precise. For the most reputable professional trading exchanges, spreads are surprisingly small but get progressively larger among the less popular exchanges, and we the expect this to be the case for crypto assets less popular than Bitcoin as well.

Whilst spreads were tight for professional exchanges such as Coinbase Pro, this was not the case for Coinbase’s retail service whose business model relies on them charging large commissions on spreads to more unsophisticated investors. On a side note, it is likely that spreads in ETPs will experience much less variance than that of crypto asset exchanges due to the role of Authorized Participants – who will help spreads decrease as the products become more popular.


The information provided does not constitute a prospectus or other offering material and does not contain or constitute an offer to sell or a solicitation of any offer to buy securities in any jurisdiction.

Some of the information published herein may contain forward-looking statements. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially from those in the forward-looking statements as a result of various factors.

The information contained herein may not be considered as economic, legal, tax or other advice and users are cautioned to base investment decisions or other decisions solely on the content hereof.