In the world of cryptocurrencies, you may not be a lover of alternative coins. But altcoins are inevitable at some point in your crypto journey, as you may need altcoins, such as Ethereum, MATIC, BNB, etc., to buy NFT or for hedging.
For example, you may want to convert your cryptocurrencies from one to another if you hold Bitcoin or Ethereum and want to buy a Polygon NFT. In such cases, you can easily convert your Bitcoin or Ethereum to MATIC.
But where will you convert your cryptocurrency? What is the cheapest way to convert cryptocurrencies?
In this article, I explored 4+ exchanges, 2+ crypto exchange platforms, and a decentralized community-based Defi platform to provide the cheapest way to convert cryptocurrency from one to another.
It took a few days to find the best and cheapest way to convert crypto tokens from one to another. But you will know it in a few minutes.
Why should I convert my cryptocurrency to another instead of buying?
To avoid volatility: The cryptocurrency market is well known for its drastic moves. You have to sleep, but the cryptocurrency market does not need. Therefore, it is highly sensitive to current trends and decisions made by regulators.
Sometimes the market doesn’t give you time to react to your portfolio. So, if you suspect any previous movement, you can convert your cryptocurrencies from one to another to avoid the losses suffered by volatility.
For example, you can avoid volatility by converting your cryptocurrency into stablecoins, such as Tether (USDT), USD Coin (USDC), Binance USD (BUSD), Pax Dollar (USDP), etc. Stablecoins are digital currencies whose value is pegged to a stable asset, such as fiat currency or a commodity such as gold.
No need for fiat currency: you don’t need to deposit fiat currency to buy a cryptocurrency if you opt for the crypto conversion option.
Market Timing: You can buy instantly in the convert crypto option as it eliminates the time it takes to deposit money into your trading account. Then, you can pack the cryptocurrency for your analyzed price range.
Where can’t you convert cryptocurrency from one to another?
Some people have misunderstood that they can convert their cryptocurrencies on Bridges, decentralized exchanges (DEXs), and DEX aggregators. But they can’t.
- Bridges: Allows users to send cryptocurrencies from one blockchain to another. That is, if you have Ethereum and want to spend it as MATIC it means that the bridge is your solution.
- DEX: DEXs like Uniswap or PancakeSwap are meant to exchange the same standard tokens, e.g. ETH for other ERC20 tokens, such as DAI, USDC, etc.
- DEX Aggregators: The DEX aggregator like 1inch offers the best price by analyzing all dexes. It also allows token exchanges of the same standard, not swaps of one cryptocurrency with another.
Steps to convert cryptocurrency from one to another
1. Use of centralised control panels (CEX)
Centralized exchanges (CEX), such as Binance, Binance.US, Coinbase, KuCoin, Kraken, etc. have the function of converting cryptocurrencies.
Some of the exchanges, such as Binance, Coinbase, and Kraken have a simplified user interface for this purpose, while others have a “spot trading” section.
In the “spot trading“, you need to select the trading pairs to trade for the market or limit the orders.
Usually, spot trading involves two trades. For example, to convert ETH to MATIC, you need to do two things. The first trade involves ETH/USDT, ETH/USDC, etc. The second trade involves USDT/MATIC, USDC/MATIC, etc.
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To convert cryptocurrency to Binance, you need to go to the “Binance Convert” section.
To do this, hover over “Trade” and click “Binance Convert“.
In the Binance mobile application, tap the “interchange” icon. Then, tap on “Convert“.
Once you are in the Binance Convert section, select the token and click “Confirm”. If you wish, you can switch to the “Limit” order from the “Market” order.
Note: U.S. residents can use Binance.US, Coinbase, or Kraken.
Pros of Converting Crypto Tokens on Binance
- The Binance Convert feature does not incur any fees.
- A single trade is enough to get the cryptocurrency you want.
- The conversion process is a quick and instant credit of the crypto token.
Like Binance, Coinbase has a crypto conversion section where users can convert their cryptocurrencies into others.
Log in to your Coinbase account and click “Buy & Sell“, then go to the “Convert” tab.
Next, select the crypto tokens to trade and click the “Preview Conversion” button.
On the Coinbase mobile application, you need to tap on “Convert“. Then, choose the cryptocurrencies to proceed with.
Pros of Converting Crypto Tokens in Coinbase
- No conversion costs.
- Accessible to U.S. residents.
- Unlike spot trades, Coinbase’s conversion offers a single exchange to get the desired cryptocurrency.
- The whole process is a fast and instant credit.
To convert cryptography to another cryptocurrency in Kraken, you need to open the Kraken mobile application.
Then, tap on the “interchange” icon and select the tokens to trade.
Finally, confirm the conversion.
You can also use the Kraken web to convert cryptocurrencies.
Pros of Converting Crypto Tokens to Kraken
- Kraken charges 0.1% for cryptographic conversion.
- Accessible to residents of the United States (with the exception of residents of Washington and New York).
- To get the cryptocurrency you want in Kraken, you just need to make a trade.
In addition to these CEX, you can also use KuCoin. But KuCoin doesn’t have a simplified conversion section like Binance, Coinbase, and Kraken. You have to make a spot trade by clicking on the “Trade” option.
KuCoin charges 0.1% for each spot trade. To receive a 20% discount on the commission, you must pay the commission with a KCS token. The best thing about KuCoin is that you don’t need any KYC to perform crypto conversions.
2. Crypto Exchange Platforms
Crypto exchange platforms are non-custodial aggregators that allow users to instantly trade any cryptocurrency at the best price. It also allows users to buy cryptocurrency with fiat currency.
These platforms offer the best prices by working with a variety of crypto trading platforms.
Why should I use crypto exchange platforms on CEX?
- Non-custodial: These platforms do not store your cryptocurrencies. Instead, they access encryption from your wallet.
- Best Price: These platforms are aggregators of crypto exchanges. So, they can get the best possible price.
- Easy-to-use user interface.
- Elimination of withdrawal fees: If you convert your cryptocurrencies to CEX, you must pay a withdrawal fee at the time of withdrawal.
Changelly is one of the most popular crypto exchange platforms on the market. It has been operational since 2015. It charges an exchange fee of 0.25% along with the network fee. These fees are included in the conversion rate.
The network fee is around ~$0.50-$5 depending on blockchain traffic.
Changelly is very easy to use. Simply set up the exchange pairs, enter the recipient’s address, make a deposit and wait for the transaction to complete.
After connecting the wallet, select the crypto tokens to trade/convert and click “Trade Now“. You can also buy cryptocurrencies via fiat currency on Changelly.
ChangeNOW is also an aggregating platform of crypto exchanges available in the market. Like Changelly, select exchange pairs, paste the wallet address, make a deposit, and wait for the exchange to finish.
ChangeNow includes network fees and exchange fees in the conversion rate.
Zapper.fi is the first community-owned digital asset management platform for DeFi. It also allows users to trade cryptocurrencies from one to another.
To use Zapper.fi, just connect your decentralized crypto wallet and go to the “Swap” section.
Next, select the tokens to trade and click “Trade” once you get the best price.
The platform only charges the network fee for cryptographic conversion, which is based solely on blockchain congestion. Usually, the network rate can be around ~$1-$5.
There is no adequate knowledge found on the Internet about converting one form of encryption into another. So, I detailed my personal experience in converting cryptocurrencies on different platforms along with the fees.
To sum up, all the platforms mentioned in this article have only slight differences from each other in the amount of cryptocurrencies you are receiving. Of course, if you make mass transactions, there will be a big difference.
- Choose Binance or Coinbase, if you want to cash out the converted cryptocurrency. There are no fees for converting cryptocurrencies on Binance and Coinbase.
- In case you want to invest the converted cryptocurrency in NFT, liquidity pool or yield farming, you need to withdraw it from Binance or Coinbase. Upon withdrawal, you will be subject to a withdrawal fee. So, it is better to use Changelly or Zapper.fi in such cases.
- I suggest you use Changelly or Zapper. Because, you will get your cryptocurrency on your wallet (no withdrawal fees and you own your token instead of being left in the custody of cex), the best conversion price as these two platforms are aggregators and less fees.
Note: Since Zapper is a decentralized community-based protocol, you can’t expect quick customer support in case of issues like pending transactions.
frequently asked questions
1. Is Binance Convert free?
Yes, the Binance Convert feature is free. You can convert any supported coin using Binance Convert for free in the “Market” order and in the “Limit” order.
2. Can I exchange ETH for MATIC in Uniswap?
No, it is not possible to exchange ETH for MATIC in Uniswap. You can only exchange ETH for other ERC20 tokens, such as DAI, USDC, USDT, WBTC, and WETH.
If you want to trade ETH for MATIC, you need to use a crypto exchange platform like Changelly or Binance Convert/Coinbase Convert.
3. Is the conversion of cryptocurrencies from one to another without cashing out taxable?
Yes, since converting cryptocurrencies from one to another involves buying and selling, it is subject to taxes.
In other words, by converting crypto you get another crypto as a gain. So, it is a taxable event.
4. Is Coinbase Convert free?
Yes, the Coinbase Convert feature is free. You can convert any supported coin using Coinbase Convert for free. However, you will be subject to Tax Deducted at Source (TDS) at the time of conversion.