Beginners often possess questions related to transferring coins from an exchange. Especially when it is their first Bitcoin purchase. Lately an user asked us whether “it is safe to transfer coins directly from one exchange to another? Or do I need to send it first to my wallet and then to an exchange?”
Yes, you can transfer cryptocurrency directly between exchanges and you don’t need a wallet in between. It works the same way as sending Bitcoin from your wallet to another address.
There are many reasons for one to move coins from one exchange to another. It may be to regional exchange to cash out their crypto. It can be to buy their favorite altcoin which is only listed on that particular exchange. Or it can be their favorite trade exchange.
Whatever the reason it may be. Before sending your coins in and out of the exchange you must note that there are three things involved in every transaction: Withdrawal fee, network fee and transaction time.
Here in this beginners guide we’ve explained everything about transferring coins. It’ll cover the following topics.
How to transfer cryptocurrency between exchanges safely? Which is the best crypto to transfer? How to avoid transaction delays & minimize fees.
How to move Bitcoin from one exchange to another
Not just Bitcoin, but to transfer any cryptocurrency all you require is the destination wallet address (deposit address). No matter which exchange you wish to transfer your funds to; the exchange will provide you with the receiving address.
Only thing you need to ensure is that you’ve copied the right address of the coin that you are looking to deposit. For example copying BTC address and sending ETH to that address will result in loss of your coins.
In general here are the steps to transfer coins from Exchange A to Exchange B.
- Go to Exchange B and head to Funds >> Deposits / Withdrawal section.
- Choose the coin (if it is Bitcoin transfer then choose Bitcoin from coin list) and copy the address provided by the exchange.
- Now come back to Exchange A and head to Deposits / Withdrawal section.
- Choose your coin that you are looking to withdraw. Then paste the recipient address that you copied from Exchange B.
- Next enter amount to send and click withdraw. Now you’ll be asked to complete the validation process. It can be either 2FA or email verification depending on what you chose for your account security. Once this step is complete your coins will be sent to Exchange B.
Note: Always understand the risks and proceed. Before submitting double check and verify the deposit address that you copied from the exchange with your current exchange. Transaction once confirmed cannot be reverted.
If it is your first crypto transfer and you are still in doubt then it is better to do a test transfer with a small amount.
Withdrawal fee, network fee and transaction delays
While most exchange don’t require deposit fee, almost every cryptocurrency exchange has a withdrawal fee. The charges vary from coin to coin and from exchange to exchange. You must be mindful of the withdrawal fee before confirming the transaction.
In addition to withdrawal fee there is also a network fee (miners fee) which you should pay to include your transaction in the blockchain. Again that varies from coin to coin with Bitcoin being the highest.
Along with high network fee, Bitcoin transaction is also slow. It requires 6 confirmations and it takes almost a hour to reach your destination address (exchange).
For this particular reason users avoid transferring Bitcoin directly. Instead they convert and send an altcoin that has low fee and relatively fast confirmation time.
How to avoid transaction costs and fees?
If you are concerned about Bitcoins high transaction costs and delays then here is one method that should work for you.
Find an altcoin that has low fees and fast confirmation times. For example coins like ADA, NEO, NANO take almost zero fee to transfer and moreover they are instant.
Make sure both the exchange support deposit & withdrawal of the altcoin that you’ll be transferring. Also ensure both the exchanges has huge liquidity. If there is a problem with this then choose top altcoins like Ethereum (ETH) or Litecoin (LTC).
Once you are certain convert your BTC to altcoin. Send the altcoin to your other exchange account and convert it back to BTC.
This is the best way you can avoid high exchange commissions, network charges and transaction delays. However, here’s the catch.
Before you convert your BTC to altcoin for transferring
Cryptocurrencies in general are highly volatile. So remember that due to large fluctuations your price difference may be lost during the transfer.
Also when you use altcoin to transfer money; withdrawal fee is not the only charge you are paying. There is also trading fee involved on both the exchanges. That is when you convert BTC to altcoin you pay a trading fee. Likewise converting altcoin to BTC is also going to cost you a small amount. This cost can become quite big depending on the volume you are converting.
If you miscalculate this then you may end up paying more than usual. So in most scenarios it is always better to send Bitcoin directly to an exchange rather than converting it to an altcoin to avoid fees.
Finally if you have large amount of cryptocurrencies and don’t plan on trading them then you should move them from the exchange to your wallet. Keeping coins on your exchange account is highly not recommended. You don’t own the private keys. If the exchange gets hacked you’ll lose all your holdings.