Every purchase of crypto passes through a venue where buyers and sellers meet. Knowing what that venue is actually doing explains most of the costs you see.
The order book
An exchange lists what people want to buy and sell, and at what price. When your order matches someone else's, the trade happens. The gap between the best buy and the best sell is the spread, and it is a cost you pay without noticing.
Two kinds of venue
- Order books — buyers and sellers meet, and the price forms from trading. Used by most major venues.
- Over-the-counter — a desk quotes you a price and you accept or not. Common for large amounts, where an order book would be moved by the size of it.
Slippage — the price moving while your order waits — is the same effect in miniature.
What it costs
- The spread, on every trade, in both directions.
- Trading fees, usually a percentage of the amount.
- Deposit and withdrawal fees, which are the network's, not the venue's.
The part that is not a cost
Liquidity is a real risk. A venue with a thin order book cannot fill a large order at the price you saw. Before depositing a meaningful amount, check that the pair you need is liquid — and prefer venues where that is the case. The list of questions is in choosing a custodian.
Why this is background, not advice
None of the above suggests where or when to trade. It describes a venue. What you decide to do with that belongs in the risk checklist and what charts can and cannot tell you.