In the world of crypto, you may not be an alt coin lover. But, altcoins are inevitable at some point in your crypto journey, as you might need altcoins, such as Ethereum, MATIC, BNB, etc., to buy NFTs or for hedging.
For example, you might want to convert your crypto from one to another if you are holding Bitcoin or Ethereum and want to purchase a Polygon NFT. In those cases, you can easily convert your Bitcoin or Ethereum to MATIC.
But, where will you convert your crypto? What is the cheapest way to convert cryptocurrencies?
In this article, I have explored 4+ exchanges, 2+ crypto exchange platforms, and one 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 get to know it within a few minutes.
Why Should I Convert My Crypto to Another Instead of Buying?
To Avoid Volatility: The crypto market is very much known for its drastic moves. You have to sleep, but the cryptocurrency market need not. Hence, it is highly sensitive to current trends and decisions taken by the regulators.
Sometimes the market does not give you time to react to your portfolio. So, if you suspect any movement prior, you can convert your cryptos from one to another to avoid the losses incurred by volatility.
For example, you can avoid volatility by converting your crypto to 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 like gold.
No Need for Fiat Currency: You don’t have to deposit your fiat currency to buy a cryptocurrency if you opt for the convert crypto option.
Timing the Market: You can buy instantly in the convert crypto option as it eliminates the time needed for depositing money into your trading account. Hence, you can bag the cryptocurrency for your analyzed price range.
Where You Can’t Convert Cryptocurrency from One to Another?
Some people have misunderstood that they can convert their crypto on Bridges, Decentralized exchanges (DEXs), and DEX Aggregators. But, they cannot.
- Bridges: It allows users to send cryptocurrencies from one blockchain to another. I.e. If you have Ethereum and you want to spend it like MATIC means the bridge is your solution.
- DEXs: DEXs like Uniswap or PancakeSwap are meant to exchange the same standard tokens. I.e. ETH to other ERC20 tokens, such as DAI, USDC, etc.
- DEX Aggregators: DEX aggregator like 1inch offers the best price by analyzing all DEXs. It also allows token swaps of the same standard, not the swaps of one crypto to another.
Steps to Convert Cryptocurrency from One to Another
1. Using Centralized Exchanges (CEXs)
The centralized exchanges (CEXs), such as Binance, Binance.US, Coinbase, KuCoin, Kraken, etc. have the feature to convert cryptocurrencies.
Some of the exchanges, like Binance, Coinbase, and Kraken have a simplified user interface for this purpose, while others have a “spot trading” section.
In “spot trading”, you have to select the trading pairs to trade for the market or limit orders.
Usually, spot trading involves two trades. For example, to convert ETH to MATIC, you need to perform two trades. The first trade involves ETH/USDT, ETH/ USDC, etc. The second trade involves USDT/MATIC, USDC/MATIC, etc.
Binance
To convert cryptocurrency on Binance, you need to go to the “Binance Convert” section.
To do so, hover over the “Trade” and click “Binance Convert”.
On the Binance mobile application, tap on the “interchange icon”. Then, tap on “Convert”.
Once you are in the Binance Convert section, select the token and click “Confirm”. If you want, you can switch to the “Limit” order from the “Market” order.
Note: US residents can use Binance.US, Coinbase or Kraken.
Pros of Converting Crypto Tokens on Binance
- Binance Convert feature incurs no fees.
- A single trade is enough to get the crypto you want.
- The conversion process is fast and instant credit of crypto token.
Coinbase
Like Binance, Coinbase has a crypto convert section where users can convert their crypto to others.
Sign in to your Coinbase account and click “Buy&Sell” and then navigate to “Convert” tab.
Then, select crypto tokens to exchange and click the “Preview Convert” button.
On the Coinbase mobile application, you need to tap “Convert”. Then, choose cryptocurrencies to proceed with.
Pros of Converting Crypto Tokens in Coinbase
- No conversion fees.
- Accessible for US residents.
- Unlike spot trades, Coinbase convert offers a single trade to get the crypto you want.
- The whole process is fast and instant credit.
Kraken
To convert crypto to another crypto in Kraken, you need to open the Kraken mobile application.
Then, tap on the “interchange icon” and select the tokens to exchange.
Lastly, confirm the conversion.
You can also use the Kraken web to convert cryptocurrencies.
Pros of Converting Crypto Tokens in Kraken
- Kraken charges 0.1% for the crypto conversion.
- Accessible for US residents (except for Washington and New York residents).
- To get the crypto you want in Kraken, you only need to make one trade.
Apart from these CEXs, you can also use KuCoin. But, KuCoin does not have a simplified conversion section like Binance, Coinbase, and Kraken. You need to do a spot trade by clicking the “Trade” option.
KuCoin charges 0.1 % for each spot trade. To receive a 20% discount on the fee, you need to pay the fee with a KCS token. The best thing about KuCoin is there is no KYC needed to perform crypto conversions.
2. Crypto Exchange Platforms
Crypto exchange platforms are non-custodial aggregators that allow users to instantly exchange any cryptocurrency at the best price. It also allows users to buy cryptocurrency with fiat currency.
These platforms bring the best prices by working with a variety of crypto trading platforms.
Why Should I Use Crypto Exchange Platforms Over CEXs?
- Non-custodial: These platforms are not storing your cryptos. Instead, they access the crypto from your wallet.
- Best price: These platforms are crypto exchange aggregators. Hence, they can get the best possible price.
- Easy to use user interface.
- Elimination of withdrawal fees: If you convert your cryptos on CEXs, you need to pay a withdrawal fee at the time of withdrawal.
Changelly
Changelly is one of the most popular crypto exchange platforms in the market. It has been operating 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 comes roughly around ~$0.50-$5 depending on the blockchain traffic.
Changelly is very easy to use. Just set the exchange pairs, enter the recipient address, make a deposit and wait for the transaction to be completed.
After connecting the wallet, select the crypto tokens to exchange/ convert and click “Exchange now”. You can also buy crypto via fiat currency on Changelly.
ChangeNOW
ChangeNOW is also a crypto exchange aggregator platform available in the market. Like Changelly, select exchanging pairs, paste the wallet address, make a deposit, and wait for the exchange to get over.
ChangeNow includes the network fees and exchange fees in the conversion rate.
3. Zapper.fi
Zapper.fi is the first community-owned digital asset management platform for DeFi. It also allows users to swap cryptocurrencies from one to another.
To use Zapper.fi, just connect your decentralized crypto wallet and head to “Swap” section.
Then, select the tokens to exchange and click “Exchange” once you get the best price.
The platform only charges the network fee for the crypto conversion, which is solely based on the congestion of the blockchain. Usually, the network fee may come around ~$1-$5.
Conclusion
There is no proper knowledge found on the Internet about converting one form of crypto to another. Hence, I have detailed my personal experience in converting cryptocurrencies across several platforms along with the fees.
To sum it up, all of the platforms mentioned in this article have only slight differences from each other in the amount of crypto you are receiving. Obviously, if you make bulk transactions, there will be a big difference.
- Go for Binance or Coinbase, if you want to cash out the converted cryptocurrency. There is no fee for converting cryptocurrencies on Binance and Coinbase.
- In case you want to invest the converted crypto into NFTs, liquidity pools or yield farming, you must withdraw it from Binance or Coinbase. At the time of withdrawal, you will be subjected to a withdrawal fee. Hence, it is best to use Changelly or Zapper.fi in these cases.
- I suggest you to use Changelly or Zapper. Because, you will get your crypto on your wallet (no withdrawal fee and you own your token instead of being left under custody of CEXs), the best conversion price as these two platforms are aggregators, and less fee.
Note: Since Zapper is a decentralized community-based protocol, you cannot expect fast customer support in case of any issues like transactions pending.
It took a lot of effort and time to ease the process of converting crypto tokens from one to another for you. If you find it helpful, feel free to share.
FAQs
1. Is Binance Convert free?
Yes, the Binance Convert feature is free to use. You can convert any supported coins using Binance Convert free of charge at the “Market” order as well as the “Limit” order.
2. Can I Swap ETH for MATIC in Uniswap?
No, you can’t swap ETH for MATIC in Uniswap. You can only swap ETH for other ERC20 tokens, such as DAI, USDC, USDT, WBTC, and WETH.
If you want to swap ETH for MATIC, you must use a crypto exchange platform like Changelly, or Binance Convert/ Coinbase Convert.
3. Is converting crypto from one to another without cashing out taxable?
Yes, since converting crypto from one to another involves buying and selling, it is subjected to tax.
In other terms, by converting crypto you are getting another crypto as a gain. Hence, it is a taxable event.
4. Is Coinbase Convert free?
Yes, the Coinbase Convert feature is free to use. You can convert any supported coins using Coinbase Convert free of charge. However, you will be subjected to Tax Deducted at Source (TDS) at the time of conversion.