5 Reasons for having Accounts on multiple Crypto Exchanges

How many accounts on multiple crypto exchanges can I have? This article explains the benefits of creating accounts at several platforms in the volatile cryptocurrency markets.

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Presently, Bitcoin and cryptocurrencies, a new asset class used for trading and investing in cyberspace have reached a $2 trillion market. In other words, investing in crypto has been booming and grown to a serious competitor to traditional finance.

Similar to trading stocks and commodities on Forex you can create an account at different trading platforms. Good examples of popular cryptocurrency exchanges are Coinbase, Binance, and Kraken to name a few. Moreover, all of the exchanges mentioned above are free and it doesn’t really matter where you live in the world, because most cryptos are traded on a global scale.

Also, because creating an account at a crypto exchange is for free, it doesn’t limit anyone to creating an account at multiple crypto exchanges. Therefore, is it OK to use multiple crypto exchanges for trading? The short answer is no it doesn’t really matter. As long as you don’t get confused by managing several crypto accounts at the same time. Additionally, most crypto exchanges differ in trading volumes, fees, and assets being traded upon.

As a result, this article will deep dive into trading and managing multiple crypto accounts at the same time and why you can benefit from this.

How does a single cryptocurrency exchange work?

Before diving into managing accounts at several crypto exchanges, first some basic knowledge about crypto exchanges in general. In the early days of crypto, crypto exchanges mainly existed by earning money on trading fees. Meaning, how the higher the trading volumes on the platform, the higher the revenue for the platform. In my opinion, a very straightforward and beneficial business model even nowadays.

For example, Binance charges 0.1% fees for every single trade being done on the platform. Suppose you are a professional day trader that uses $10000 in trading volume on a daily basis. Then $10000*(0.001) gives $10 dollars in trading fees. On a monthly basis, you would pay $10*(30) is $300 in total.

Remember that every crypto exchange uses a variable trading fees percentage which is based upon trading volumes. If your total trading volumes on a monthly basis are high the rate will automatically decline, below a fee model that Binance uses for trading fees.

💱Trading vol(30 days)	✅BNB balance	💰Fee rate	❇️Fee rate(25% off)
<1,000,000 BUSD	>= 0 BNB	0.10%	0.075%
>1,000,000 BUSD	>= 25 BNB	0.09%	0.0675%
>5,000,000 BUSD	>= 100 BNB	0.08%	0.06%
>20,000,000 BUSD	>= 250 BNB	0.07%	0.0525%
>200,000,000 BUSD	>= 1000 BNB	0.06%	0.0450%

*If you hold BNB on Binance, you will be discounted 25% on fees automatically

Ultimately, the developments in the crypto markets are moving fast and also the way money can be earned with crypto. As a result, all the different trading platforms are offering additional services for their customers like crypto staking, earning interest on stablecoins, crypto lending, and many more.

Recommended: Why Binance is good for beginners

Is it Difficult to Manage accounts at multiple Crypto Exchanges?

Initially, creating a single account on a crypto exchange isn’t difficult at all. As mentioned above creating an account is for free and the next step would be to go through a signup process by using e-mail or mobile phone. Besides, most cryptocurrency exchanges will require you to share ID and a selfie. This is due to KYC regulations and to be compliant with local regulations.

Additionally, to answer the question, it depends on your level of knowledge in crypto. For example, cryptocurrencies are being used for different reasons where trading and holding are the main ones. However, in contrast to traditional assets like stocks, crypto’s can be sent elsewhere by using wallets.

In particular, more advanced cryptocurrency users are using these wallets to send their crypto to other platforms. For example, currently, if I have 2 LTC on Binance and I want to send them to Coinbase to trade there or cash out some crypto for money. What are the steps to do this?

On Coinbase go to Litecoin(LTC) wallet
Click on ‘Receive‘
Copy LTC address to clipboard
On Binance go to my LTC wallet
Click on ‘Withdraw LTC‘
Copy address from clipboard in ‘Withdraw to address‘
Select network and amount and click ‘Withdraw‘ button

The steps described above for sending crypto are the same for every platform and it only takes a few minutes before the crypto will arrive on the desired platform.

In case you are a beginner and never has done this before, I can imagine you must feel a little uncomfortable by sending your precious crypto away 😒. Don’t worry too much about it, just make sure you are using the right addresses in combination with the blockchain network(Litecoin).

Reasons for having accounts on multiple Crypto Exchanges

If you are wondering this question: ‘Can I buy crypto on multiple platforms’ maybe you already know the answer because it’s definitely a yes. As mentioned earlier, creating an account on a crypto exchange is for free and there is no limit on the number of different accounts.

Next in this article some good reasons to have accounts on multiple crypto exchanges. Remember that creating several accounts isn’t obligatory and you must decide for yourself if it’s truly worthwhile.

#1 – Spread the risk over several accounts

Even though the cryptocurrency market has matured a lot and many learned its lessons from the past, there is still a risk when you deposit crypto to a separate platform. Unfortunately because of the unregulated nature many scammers and hackers are being active. Meaning your crypto is still at risk at a single platform.

To avoid funds loss or being scammed it’s very wise to spread your funds over several platforms. This will reduce the risk of ‘losing it all‘ and will give you some extra peace of mind.

Another benefit of using multiple crypto accounts is that you can split your portfolio. For instance, when you are a more advanced trader and want to start using trading with leverage; use a separate crypto account for this. Moreover, when trading with leverage you have the risk of being liquidated and this shouldn’t be done in one account or single platform.

#2 – Buying and selling of specific altcoins

Buying and selling crypto isn’t all about Bitcoin, Ethereum(ETH), or Litecoin(LTC) anymore. Instead, thousands of different crypto coins can be traded and many more will come to this market in the future ahead of us.

Indeed, there is a lot of opportunity in the crypto markets and even the biggest platforms like Binance, Kucoin, or Coinbase don’t have all the existing crypto coins listed. If you like to find some hidden gems or small-cap coins then you should open accounts at multiple crypto exchanges. Moreover, if you first started buying BTC or ETH at some of the bigger ones(Binance, Coinbase), creating a new account is very easy.

Many of the crypto platforms where a lot of specific altcoins are being traded allow you to create an account without KYC when you deposit crypto only. In other words, if you deposit Bitcoin or ETH on Kucoin or Okex you can start trading crypto right away.

#3 – Cash out crypto for money

Suppose you have made some serious gains with buying and selling cryptocurrency. The next thing to do will be to take profit or cash out for money. Unfortunately, not every crypto exchange supports withdrawals to your bank account by SEPA or SWIFT. Binance, for example, is currently being under research by the European Union and therefore all SEPA payments are temporarily suspended.

To avoid withdrawal issues on crypto exchanges and to be able to cash out to a bank account when necessary, owning several accounts at multiple crypto exchanges can help you a lot. Not every crypto platform is under investigation by regulators and will therefore support withdrawals to your bank account.

Paypal

Besides sending your crypto profits to a bank account with SWIFT or SEPA, there is another route that can help you out here. At the end of 2024, Paypal announced that it will also support paying with Bitcoin and other crypto’s.

Paypal is a very serious player in traditional finance and as a result of this Coinbase decided to allow fiat withdrawals from its platform. Moreover, if you decide to use Coinbase to transfer money to Paypal it will charge you zero fees for it 😀

Recommended: How to buy with PayPal on Coinbase

#4 – Different services available

Another good reason for having accounts on multiple crypto exchanges is a specific service offered by one of the platforms. As mentioned earlier, creating an account at an exchange isn’t about trading anymore where various other services exist nowadays. Binance is a good example where more than 10 services are offered for earning crypto.

A famous service of the Coinbase platform is the ‘Recurring buys‘ feature. Meaning at given times on a weekly or monthly basis they start buying crypto for you(automated process). Also, when the price is high they buy less crypto and on the other hand, when the price is low they buy more. Eventually, this way of entering the crypto markets is called a dollar-cost-averaging strategy.

In addition, there is automated trading where intermediate or advanced traders use trading bots to execute trades. Kucoin trading bot is a good example where you can deposit crypto and easily configure a trading bot for free.

#5 – Crypto arbitrage trading

Arbitrage trading is when a trader purchases an asset in one place and sells it in another. All this to profit from a deviation in price between markets. E.g. 1 $BTC costs $25,000 on Binance but it’s currently also trading at $24.700 on Kraken. So you purchase your Bitcoin on Kraken and hopefully, you will be able to sell it quickly enough on Binance to make that $300 profit.

This is an easy >1% profit and many traders are excited about the prospect of making a few bucks this way. In particular, they profit from the discrepancies between exchanges especially when there are zero risks involved.

The pitfalls of arbitrage trading

Now just hold on a little before you start signing up for all different types of exchanges. For instance, crypto arbitrage trading has some serious pitfalls and most traders have to conquer these first before getting profitable:

Wallets on exchanges are often temporary disabled for maintenance, which halts all deposits and withdrawals
To be profitable you also have to deal with high deposit and withdrawal fees
Some exchanges have a lack of volume to execute your trades
Crypto arbitrage trading is very hard to do manually. It requires automated trading to be profitable
High trading fees

Final words

Suppose, you have created accounts on multiple crypto exchanges. What is the best way to start using these accounts properly? In short, the options explained in this article should give you a better idea. Here is the summary:

Spread the risk
Trading specific altcoins
Cash out crypto for money
Different crypto services available
Crypto arbitrage trading

The following articles might also be a good read for you:

📣Important: List of top Crypto Projects

🎁 Swapzone: Find the best crypto offer

🚀 Bitsgap: Best Automated Trading Bots

💲 Nexo: Reliable Crypto Lending Platform and get $25 free Bitcoin

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