This Is How Much It Costs To Send Ethereum

Key Takeaways:

  • The average fee to transfer Ethereum between wallets is 0.501 USD.
  • The cheapest ETH transaction fees are typically obtained between 9:30 am and 1:30 pm (IST).
  • ETH transaction fees may be as low as 0.00062 ETH to 0.006 ETH depending on several factors such as the exchange used and network congestion.

Ethereum is used heavily when sending crypto from one exchange or wallet to another place, which incurs a fee. In this article, we will explore how much it costs to send Ethereum, why Ethereum has a transaction fee, who pays it, and whether the Ethereum transaction fee can be lowered.

How Much Is It To Send Ethereum?

The Ethereum transaction fee varies depending on the cryptocurrency exchange, crypto wallet, and network congestion. According to YCharts, the average fee to transfer Ethereum on the blockchain is 0.5101 USD at the time of writing, with the lowest fees between 9:30 AM to 1:30 PM (IST). The other cost associated is additional exchange withdrawal fees. Binance charges the lowest transaction of 0.000768ETH, however, some exchanges such as Bitstamp charge up to 0.006 ETH per transaction.

ethereum transaction cost
Chart of Ethereum's transaction cost. Source: YCharts.

This Is Why Ethereum Has Transaction Fees

Ethereum is a Proof-of-Stake (PoS) blockchain network that comprises multiple decentralized applications and crypto assets that have been developed. When sending an ETH transaction, a gas fee is applied to ensure the maintenance and governance of the network. Validators, which are essentially staking pools, are nodes on the network with the purpose of processing and validating transactions within the ecosystem. This task is not free and stakers are compensated for their contribution.

Who Pays The Ethereum Transaction Fees?

The Ethereum transaction fee is paid by those who transact Ethereum. In other words, it is paid by the person who owns Ethereum and wants to transfer it from one account to the next. The Ethereum transaction fee is not always consistent since it depends upon the network congestion and the number of users involved.

Furthermore, the minimum withdrawal amounts of different cryptocurrency exchanges also impact Ethereum’s transaction fee. For instance, at the time of writing, Binance charges the lowest Ethereum Transaction fee of 0.000758 ETH, and Coindeal charges the highest fee of 0.015ETH.

Related: How does Ethereum work? Full beginner's guide to ETH.

The Lowest Ethereum Transaction Fee

Binance charges the lowest fee for transferring Ethereum at the time of writing. The cost to send Ethers via the Binance Smart Chain (BSC) is a charge of 0.000062 ETH per transaction. However, if an individual uses the native Ethereum network (ETH), the fee increases to 0.000768 ETH. In the case of the BNB Beacon Chain, the Ethereum Transaction Fee is quite low at 0.0001 ETH. For those wanting the cheapest way to send Ethereum, the fee on the Optimism network is zero. The table below shows the ETH transaction fee based on the top crypto exchanges we have reviewed.

Crypto ExchangeEthereum Transaction fee
Binance0.000062 ETH (BEP20), 0.000768 ETH (ERC 20), 0 ETH (Arbiter One), 0.0001 ETH (BEP2), 0 ETH (Optimism)
ByBit0.005 ETH
KuCoin0.005 ETH
Kraken0.0035 ETH
Crypto.com0.004 ETH
Bitstamp0.006 ETH

The Maximum Ethereum Transaction Fee

The most expensive exchange to transfer Ethereum that we could find is Bitstamp, which charges a maximum of 0.006 ETH per withdrawal to an external Ethereum wallet. This is approximately USD 7.62 at the time of writing and should be avoided (or use another blockchain). KuCoin and ByBit are also on the high end when it comes to Ethereum transfer fees at 0.005ETH using the ETH network.

Here's Why The Ethereum Fee Is High

Multiple factors influence the Ethereum transaction fee, including the time it takes to confirm the transactions, network congestion, and the size of one transaction; if any of these issues are aggravated, the ETH transaction fee rises.

  1. The number of blockchain transactions. If the Ethereum network is busy, ETH transactions get queued. A higher gas fee must be paid to bypass the line.
  2. Bear markets. Market volatility, particularly in a bear market, can increase selling pressure. This can lead to a large number of people withdrawing, which increases the Ethereum transaction fee.
  3. Microtransactions lead to bigger transaction sizes. Crypto accounts with multiple smaller transactions suffer from the compounded effect, where the transaction size becomes bigger, leading to elevated fees.

You Can Lower the Ethereum Transaction Fee

There are multiple ways of lowering the Ethereum transaction fee which include choosing the cheapest blockchain network and changing crypto exchange with lower withdrawal fees. Other strategies can be used to reduce the overall costs of the exchange which include taking advantage of exchange promotions and staking.

  1. Choose a different network with lower fees. The highest fee is incurred when people are transacting on the Ethereum network. However, choosing a network like Optimism will lower the transaction fee to zero.
  2. Use a different cryptocurrency exchange. Different exchanges have different withdrawal fees. Binance offers one of the lowest transaction fees in the market, whereas platforms such as Bitstamp charge a premium, which should be avoided if possible.

Frequently Asked Questions

Can I choose the Ethereum transaction fee?

Yes, some cryptocurrency exchanges allow users to choose the Ethereum transaction fee by selecting the network to use. On Binance, ETH holders can switch between the BNB Smart chain, Ethereum, Arbitrum One, BNB Beacon Chain, and Optimism when withdrawing Ethereum from Binance. Other exchanges do not have the same flexibility and only support the native Ethereum network, which has the highest transaction fees.

Can you avoid the Ethereum Transaction fee?

Yes, the Ethereum transaction fee can be avoided using the Optimism blockchain. It charges zero ETH per transaction. However, this blockchain network is not widely supported among cryptocurrency exchanges and wallets.

Are Ethereum transfer fees taxable events?

Yes, when an investor is trading Ethereum, the gas fee can be added to the cost basis in the tax reports.

You might also be interested in

Top