Legendary investor Jack Bogle, founder of Vanguard Investments, was known for prioritizing investor returns over company profits and challenging the industry’s focus on beating the market. His legacy lives on in the world of investing, but in the realm of crypto, fees are a major obstacle for everyday users.
Crypto fees can quickly eat away at profits, with exchange fees, network fees, wallet fees, and taxes all taking a cut of any gains. Even a small profit can be significantly reduced by fees, making it difficult for investors to build long-term wealth.
While blockchain was supposed to revolutionize the financial industry and eliminate fees, the reality is that fees in the crypto world can be even higher than traditional finance. Ethereum, the leading blockchain for DeFi and NFTs, has average transaction fees of $6.50, which can skyrocket to $30 during peak times.
The high fees in crypto are a major barrier to entry for many investors, especially those with limited funds. While there are alternative blockchains with lower fees and Layer-2 platforms that offer cheaper transactions, the problem persists on Ethereum, where most of the action is happening.
In order to build long-term wealth in crypto, investors need to be mindful of fees and taxes. Holding onto investments for the long term can help minimize fees and taxes, allowing for growth without constant transactions.
Jack Bogle’s philosophy of prioritizing investor returns and minimizing fees can be applied to the world of crypto investing. By following a long-term investment strategy and avoiding unnecessary transactions, investors can build wealth without being burdened by fees.
In the quest to beat the banks and traditional finance, the crypto industry still has a long way to go in addressing the issue of fees. Until then, investors can focus on smart investments and holding onto their assets to avoid unnecessary costs and maximize growth.
