100 basis point in percentage

What Is a Basis Point?

A basis point is a unit that represents a very small percentage change: 1 basis point equals 0.01% (one hundredth of a percent). Its English abbreviation is bp, sometimes written as bps, and it is used to clearly indicate minor fluctuations in interest rates, fees, or spreads.

In both traditional finance and crypto markets, many figures are extremely small—for example, trading fees for certain tokens, perpetual contract funding rates, or fine adjustments to annual yields. Expressing these changes in percentages can be confusing, but using basis points eliminates ambiguity. For instance, “an increase of 25bp” means the rate has risen by 0.25%.

Why Are 100 Basis Points Equal to 1%?

Since 1 basis point equals 0.01%, a percentage can be divided into 10,000 parts, with each part representing 1bp. Adding up 100 of these units: 100 × 0.01% = 1%.

You can remember it this way:

• 1bp = 0.01%, 10bp = 0.10%, 25bp = 0.25%, 50bp = 0.50%, and 100bp = 1%.
• To convert bp to a percentage, divide the number of basis points by 100.

What Is the Difference Between Basis Points and Percentage Points?

A basis point measures very small changes: 1bp = 0.01%. A percentage point refers to the absolute difference between two percentages: 1 percentage point = 1% = 100bp.

For example, if an annual yield increases from 2% to 3%, the increase is 1 percentage point or 100bp; however, the relative growth is from 2% to 3%, which is a 50% increase. Both basis points and percentage points express absolute change, just with different precision; relative increase is a different concept.

How Are Basis Points Used in Crypto Markets?

Basis points are commonly used to indicate fees, funding rates, and spreads, making it easier to standardize comparisons and calculations.

For trading fees, platform announcements or fee tables often use bp as the unit. For example, “10bp” equals a fee of 0.10%. In Gate’s fee schedules or promotional materials, you may see discounts or VIP tier differences labeled in bp.

In perpetual contracts, the funding rate is the periodic payment exchanged between long and short positions, often quoted in bp. For example, “funding rate 5bp/8 hours” means a fee of 0.05% every eight hours. Always check the units and settlement periods in Gate’s contract documentation.

For spreads, which represent the difference between the buy and sell price, “3bp” means a spread of 0.03%. Understanding spread size in bp is crucial for market making, algorithmic trading, or large orders.

How Do You Convert Basis Points to Percentages?

Step 1: Confirm the value is expressed in bp. The terms “bp”, “bps”, or “basis point(s)” all mean the same.

Step 2: Divide the number of bp by 100 to get the percentage. For example: 25bp → 25 ÷ 100 = 0.25%, and 8bp → 8 ÷ 100 = 0.08%.

Step 3: For reverse conversion, multiply the percentage by 100 to get bp. For example: 0.6% → 0.6 × 100 = 60bp, and 1% = 100bp.

What Do Basis Points Mean for Trading Fees and Spreads?

Basis points directly determine your trading costs or bid-ask spread. A fee of 8bp is equivalent to a cost of 0.08%.

Example: If you place an order on the spot market with a trade amount of 10,000 USDT at a fee rate of 8bp (0.08%), your fee for that transaction will be: 10,000 × 0.08% = 8 USDT. If the fee increases from 8bp to 12bp, your cost rises from 8 USDT to 12 USDT. Even small changes in basis points can have a significant impact on large trades.

For spreads, if a trading pair has an average spread of 5bp (0.05%), then on a transaction of 10,000 USDT, the theoretical cost from the spread would be about 5 USDT. Actual costs can also be affected by slippage and market depth; reviewing the order book and recent trades is recommended.

Risk warning: Fees and spreads may vary depending on your VIP level, promotions, or market conditions. Always refer to Gate’s latest announcements and fee pages for up-to-date information.

How Are Basis Points Used in DeFi and Yield Metrics?

In DeFi, both APR and APY frequently experience changes measured in basis points. APR refers to the annualized interest rate without compounding, while APY includes compounding effects.

If a staking pool’s APR rises from 4.00% to 4.25%, this is an increase of 25bp; if rewards are compounded frequently (APY), the actual APY will be slightly higher than APR, but “an increase of 25bp” still means an absolute improvement of 0.25% annually.

In liquidity mining or lending markets, rates are often adjusted in increments of bp. For example, if the borrowing rate drops by 15bp, your annual cost decreases by 0.15%. When browsing Gate’s investment or Earn products, use this method to quickly convert and compare offerings when you see rates expressed in bp.

Common Mistakes When Calculating Basis Points

1. Confusing percentage points with percentages: An increase from 2% to 3% is an increase of one percentage point = 100bp—not a “1%” relative increase (the relative increase is actually 50%).
2. Misreading bp as two decimal places off from percentages: Remember “1bp = 0.01%”, not “1bp = 0.1%”.
3. Ignoring settlement periods when annualizing: If a contract’s funding rate is “5bp per eight hours”, multiplying directly by days in a year isn’t accurate—you must consider settlement frequency and compounding.
4. Focusing only on stated rates without calculating total cost in bp: With large trades, every additional bp linearly increases your cost; always multiply by trade size for a clear picture.

Key Takeaways and Practical Tips

Basis points divide percentages into much finer units, making quotes, fees, and yield changes more precise. Remember these two equations: 1bp = 0.01%, and 100bp = 1%. When reviewing Gate’s fee announcements, contract funding rates, or yield products, always identify the units and periods involved before converting between bp and percentage. Use basis points as a common yardstick when comparing products or scenarios—double-check whether you’re looking at absolute change (percentage points) or relative increase—and estimate your actual cost or return based on your transaction size. For anything involving funds, always refer to the platform’s latest official details to avoid losses from misreading units or periods.

FAQ

How much is 100 basis points?

100 basis points equal 1%. A basis point is a subdivision of a percent—since one bp = 0.01%, then multiplying by one hundred gives you: 100 × 0.01% = 1%. This conversion is standard across financial markets—stocks, forex, or cryptocurrencies.

How many percent is 50 basis points?

50 basis points equal 0.5%. The calculation is: 50 bp ÷ 100 = 0.5%, or equivalently, 50 × 0.01% = 0.5%. For instance, if an interest rate rises by fifty basis points, that means an increase of half a percentage point—a common adjustment in central bank policy changes.

How are basis points used in trading fees?

Trading fees are often quoted in basis points for more precise calculation of small charges. For example, if Gate sets a fee at twenty basis points (20bp), that’s equivalent to a fee rate of 0.2%; if you trade for a value of $10,000 USDT, your fee will be $10,000 × 0.2% = $20 USDT. Using basis points avoids decimal confusion and ensures professional clarity.

Why do financial markets prefer basis points over percentages?

Basis points provide higher precision and prevent misinterpretation caused by decimals—for instance, “0.05%” can be easily misread but “5 basis points” is clear and straightforward. In rate adjustments, fees, or yield calculations where precision matters, bp has become an industry-standard term for fast professional communication.

How do you quickly convert between basis points and percentages?

Remember this core formula: number of bp ÷ 100 = percent value; for example: three hundred bp ÷100 = three percent (300 ÷100 =3%). The reverse works too: percent ×100 = number of bp. When checking rates or yields on Gate marked in bp, just use this formula for instant conversion—no calculator needed.