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 cryptocurrency, fees are still a major issue.
Crypto transactions are often laden with fees, from exchange fees to network fees to wallet fees. These fees can eat away at profits, especially for small investors. Even the act of buying and selling crypto can incur taxes, further reducing potential gains.
While blockchain technology was supposed to revolutionize the financial industry and eliminate fees, the reality is that fees are still a significant barrier for many users. Ethereum, the leading blockchain for DeFi and NFTs, can have average transaction fees of $6.50, which can skyrocket to $30 during peak times.
The high fees in crypto are a major flaw for those looking to build long-term wealth. 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 happens.
In the quest to beat traditional financial institutions, the crypto industry still has a long way to go in addressing the issue of fees. By following a long-term investment strategy and avoiding frequent transactions, investors can minimize the impact of fees and taxes on their crypto holdings.
Jack Bogle’s philosophy of prioritizing investor returns serves as a guiding principle for investors in both traditional and crypto markets. By focusing on low-cost, long-term investing strategies, investors can maximize their growth potential and build wealth without being burdened by excessive fees.
