A Cheaper Method to Enter Fiat
Disclaimer: This is NOT financial advice and should not be taken as such. Not guaranteed to be correct or continue to be correct. Do your own research.
Fiat Gateways
Popular fiat gateways like Coinbase and Gemini usually charge high fees for the fiat market. For example, Coinbase charges upwards of 1.49%. And for small volume trades, Gemini charges a 1% trading fee.
The Gemini Dollar (GUSD)
The Gemini Dollar (GUSD) as the name implies, is a stablecoin issued by Gemini exchange, pegged to the USD. 1 GUSD = 1 USD. It “combines the creditworthiness and price stability of the U.S. dollar with blockchain technology and the oversight of U.S. regulators.”
Withdraw as GUSD
Unlike USDT, GUSD is an ERC20 token, hence it is easily transferable between ETH wallets like any other token. Aside from Gemini, some other exchanges support GUSD.
GUSD Exchanges
Bibox supports GUSD and has opened a GUSD market. The available trading pairs are GUSD-ETH, GUSD-BTC and GUSD-BIX.
What is Bibox?
Bibox exchange is at pixel time the 10th largest crypto exchange by volume. It has been in operation since 2017 and is based in China. Bibox has its own token (BIX). Holders will get a share of Bibox trading fees.
General Flow
- Deposit or remit fiat USD to Gemini
- Withdraw the USD as GUSD to Bibox’s GUSD wallet
- Buy ETH or BIX or BTC in Bibox’s GUSD market
- Withdraw to wallet or trade for other tokens in their respective market
So what are the fees?
Currently, it costs nothing to withdraw as GUSD from Gemini, not even mining fee as Gemini will pay for that.
At pixel time, Bibox charges 0.1% maker/taker fees. If you hodl BIX (Bibox’s token) you can enable fee reduction of 50%.
That means that the trading fee for converting fiat USD to ETH/BIX/BTC is effectively only 0.05%, way lower than Gemini’s 1% fee.
As an added bonus, Bibox’s trading UI is way better than Gemini’s. If you were using another crypto exchange anyway to access altcoins, it can all be done on Bibox which has a large variety of tokens and is quite prompt in listing new ones.
Caveats
The GUSD market on Bibox has lower volume, so the spread is higher. As more people trade on this market, the spread is expected to get tighter and may even one day match/beat USD-ETH on Gemini.
This can be slightly mitigated if you use limit orders.
This is a stripped-down repost from my original on Medium, where you can find other articles about blockchain and cryptocurrency.
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