Transferring cryptocurrencies securely: everything you need to know

What is a crypto transfer?

Crypto transfer refers to the transfer of cryptocurrencies from one custody location to another. This could be, for example, a switch from a stock exchange to your own wallet or from a wallet to a banking solution.

For users, the transfer is the visible process. In the background, a technical transfer is always triggered in the respective network. This technical level ensures that the cryptocurrencies are assigned correctly.

Why do cryptocurrencies get transferred?

Cryptocurrencies get transferred for various reasons. In practice, the main focus is on security, convenience and the desire for self-custody.

Security with regulated providers

Many investors want to store their cryptocurrencies in a location they trust. Crypto exchanges and wallets are often located outside the conventional banking system. That is why some users transfer some or all of their holdings to a regulated provider. Banks are subject to legal directives in Switzerland and are supervised by the Swiss Financial Market Supervisory Authority (FINMA). This regulatory environment is perceived by many as an additional security factor.

Greater convenience thanks to central custody

A transfer may also make sense for practical reasons. If you manage cryptocurrencies together with other assets such as accounts, securities or retirement planning solutions in a single location, you benefit from a better overview. For example, custody, asset management and administrative issues such as tax documents can all be considered together.

Self-custody in your own wallet

Some investors make a conscious decision to store their own cryptocurrencies. They transfer assets from a provider or a banking solution to their own private wallet in order to maintain full control. This step brings independence, but also involves taking responsibility. Access data and keys must be stored securely. In the event of loss, access is generally not recoverable. Details on custody, wallets, public keys and private keys can be found in the article on crypto custody.

Combination of third-party providers and self-custody

Many users do not opt for a single form of custody. They hold some of their cryptocurrencies with a regulated provider and store another part themselves. This combination is not a contradiction, but an expression of an individual strategy.

Regardless of the approach chosen, a transfer does not change the value of the cryptocurrency. It simply moves the custody location. 

How does a crypto transfer work in practice?

A crypto transfer follows a clear basic pattern. Even if the user interfaces vary from one provider or wallet to the next, the processes remain similar. A conscious and careful approach is crucial.

A typical procedure can be illustrated using the example of a Bitcoin transfer from one wallet to another.

Anna would like to send 0.05 bitcoin from her own private wallet to another bitcoin wallet.

What is a transaction and why is it important for transfers?

The technical basis for each crypto transfer is a transaction. A transaction is the transfer of crypto assets within a network from one address to another. Before a transaction takes effect, its correctness is checked in the network. This ensures that the sent cryptocurrencies are actually present, that the sender address is authorized to make the transaction and that the rules of the relevant network are adhered to. Only then is the transaction permanently saved in the blockchain.

Once a transaction has been recognized as correct and anchored in the blockchain, it can no longer be reversed. This is precisely why a careful transfer procedure is particularly important. For a basic understanding, it is sufficient to know that every crypto transfer is binding and is carried out according to fixed rules. Technical details are not required for practical implementation.

Transactions are not the same for all cryptocurrencies

At first glance, crypto transfers often appear similar. Technically, however, transactions differ significantly depending on the specific cryptocurrency. Each blockchain follows its own rules and processes transactions in its own way. The procedure, preconditions and complexity of a transfer may vary accordingly.

How does a Bitcoin transaction work?

Bitcoin is the largest cryptocurrency in terms of market capitalization, and is widely used by investors. Transfers with Bitcoin are considered comparatively transparent, as they are processed via a single base network. As a rule, no alternative network needs to be selected for the transfer.

However, a Bitcoin transaction works somewhat differently from how many people expect. If a specific amount is transferred, one or more previously received amounts are used in the background for technical purposes, which together enable the desired transfer. The requested amount is sent to the recipient address. Any remainder is automatically returned to a new address that also belongs to your wallet. This returned amount still belongs to the sender. It is not lost and is not a sign of an error, but part of the normal functioning of Bitcoin.

How does an Ethereum transaction work?

Ethereum works differently to Bitcoin. In addition to the Ether cryptocurrency (ETH), other digital assets based on the Ethereum network can also be transferred. ETH is required as a technical basis for transactions in the Ethereum network. Even if another asset is transferred, ETH plays a key role in the background for processing the transaction.

This means the processes involved in Ethereum transfers can be more complex than with Bitcoin. Depending on the structure of the network and the transfer, additional steps or preconditions must be taken into account.

Fees for crypto transfer

A crypto transfer may incur fees. A general distinction is made between network fees and fees for the respective platform.

Network fees

Network fees are incurred when processing a transaction in the blockchain network. They are borne by the sender and are in addition to the transfer amount. The amount of the fee depends on the specific cryptocurrency and the current capacity utilization of the network.

Network fees for Bitcoin

The fees for Bitcoin do not depend on the amount transferred, but on the data volume of the transaction and the current capacity utilization of the network. Higher fees generally lead to faster confirmation. Current guidelines on network fees can be found on information pages such as The link will open in a new window mempool.space .

Network fees for Ethereum

Each transaction in the Ethereum network incurs a so-called gas fee. The size of this fee varies depending on the capacity utilization of the network and can be viewed on specialized information pages such as The link will open in a new window EtherScan . This fee is always paid in ETH, even if a different asset is transferred. If there is not enough ETH available, the transaction cannot be processed.

Platform fees

Platforms such as banks, stock exchanges and brokers can also charge their own fees for incoming or outgoing deliveries of cryptocurrencies. These fees are set by the provider and are independent of the network fee.

Before making a transfer, it’s worth a quick check to see what fees are incurred overall and whether you have sufficient credit.

Networks, confirmations and duration

Once a transfer has been initiated, the transaction is processed in the relevant network. How long this process takes depends on the cryptocurrency, the capacity utilization of the network and the fees selected. 

A transaction is not deemed to have been finalized immediately. Every confirmation from the network increases the certainty that it is permanently anchored in the blockchain. Cryptocurrencies will not be deemed available in the new location until sufficient confirmations have been received. A longer duration does not usually mean that an error has occurred. It is often a case of delayed processing in the network.

Security and responsibility for crypto transfer

Crypto transfers can be carried out securely, but require attention. Confirmed transactions cannot be reversed. Particular care must be taken with the recipient address and selection of the right network. Errors here may mean that cryptocurrencies can no longer be unambiguously assigned.

In the case of custody via a provider or bank, users benefit from clear processes and supporting security mechanisms. In the case of self-custody, the user bears full responsibility. Access data and keys must be stored securely.

A crypto transfer is not a complicated process, but it follows clear rules. Consciously checking the destination, network, address and applicable fees creates a solid basis for a secure and smooth transfer.