Coinbase Review

An on-ramp to crypto investing and understanding

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Coinbase

As the leading mainstream cryptocurrency exchange in the United States, Coinbase has become a standard on-ramp for new crypto investors. Coinbase offers a wide variety of products including cryptocurrency investing, an advanced trading platform, custodial accounts for institutions, a wallet for retail investors, and its own U.S. dollar stable-coin.

Coinbase was founded in 2012 and is a fully regulated and licensed cryptocurrency exchange in 40 U.S. states and territories. Coinbase initially only allowed for Bitcoin trading but quickly began adding cryptocurrencies that fit its decentralized criteria.

Its list expanded to include Ethereum, Litecoin, Bitcoin Cash, XRP, and many others with the promise of more as long as its requirements are met.

  • Pros and Cons
  • Key Takeaways
  • Company Overview
Pros and Cons
Pros
  • Solid variety of altcoin choices

  • Extremely simple user interface

  • Very high liquidity

Cons
  • High fees when not using Coinbase Pro

  • User does not control wallet keys

  • Those interested in altcoin trading won't find as many as some other exchanges

Key Takeaways
  • Coinbase offers a secure way to invest and trade with cryptocurrencies.
  • Coinbase features a growing list of over 25 cryptocurrencies.
  • A simple user interface provides a great environment to learn.
  • Coinbase Pro has cheaper fees with more features and is free to use for anyone with a Coinbase account.
Company Overview
  • Year Founded 2012
  • Official Website https://www.coinbase.com/
  • Cryptocurrencies Available Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin, and many more.
  • Customer Support https://help.coinbase.com/en/contact-us

Pros Explained

  • Solid variety of altcoin choices: Coinbase offers over 25 cryptocurrencies for investment, trading, and also staking.
  • Extremely simple user interface: Coinbase is perhaps one of the easiest on-ramps to crypto investing. It is easy to sign up and buy cryptocurrencies within a matter of minutes. It also has a learning program that pays users cryptocurrency to learn more about how cryptocurrency works.
  • High liquidity: Coinbase consistently ranks among highly liquid exchanges. This protects the investor from serious price slippage in an already volatile market.

Cons Explained

  • High fees when not using Coinbase Pro: Coinbase has high fees compared to some of its largest competitors. Many newcomers who use the standard Coinbase platform will be subject to these fees unless they use Coinbase Pro instead. Coinbase Pro is free to switch to and has lower fees and more features that could be overwhelming to new crypto traders.
  • Users do not control their own wallet keys: This is consistent with many centralized exchanges but it still remains a con for all of them. When a user purchases cryptocurrency on an exchange it is stored in a wallet that Coinbase has control over. This means that the user does not have full autonomous control over their holdings which, in essence, is against the ethos of decentralized currency or finance. This can be avoided if the investor withdraws their currency to their own personal wallet, preferably a hard wallet.
  • Not a large enough variety of altcoins for altcoin traders: Coinbase has a great variety of solid altcoin options for newer investors to dabble with, but those interested in seriously trading altcoins will not find too many here. That said, Coinbase plans on continuously adding more altcoins over time.

Cryptocurrencies Available on Coinbase

Coinbase has a solid number of options to invest and trade in and has plans to add more to the list. The following currencies are listed right now:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • XRP (XRP)
  • Chainlink (LINK)
  • Bitcoin Cash (BCH)
  • Bitcoin Satoshi's Vision (BSV) (Send Only)
  • Litecoin (LTC)
  • EOS (EOS)
  • Tezos (XTZ)
  • Stellar Lumens (XLM)
  • USD Coin (USDC)
  • Cosmos (ATOM)
  • Dash (DASH)
  • Ethereum Classic (ETC)
  • Zcash (ZEC)
  • Maker (MKR)
  • Compound (COMP)
  • Basic Attention Token (BAT)
  • Algorand (ALGO)
  • OMG Network (OMG)
  • Dai (DAI)
  • 0x (ZRX)
  • Kyber Network (KNC)
  • Band Protocol (BAND)
  • Augur (REP)
  • Orchid (OXT)

Trade Experience

Trading on Coinbase is an extremely easy process and geared toward a beginner. The platform can also be accessed through your android or iOS devices. Coinbase does not offer any downloadable trading software and it is all browser-based, including its more advanced trading platform, Coinbase Pro.

When you log in you are immediately shown your portfolio balance and its performance in a selection of time frames like one hour, 24 hours, one week, and one year.

A banner above your portfolio balance has a "Buy crypto" button where you can enter a dollar value and place market orders for whichever crypto you choose that Coinbase has available. This button also brings up the options to sell or convert your crypto or even set up recurring orders every day, every week, on the 1st and 15th, or once a month.

Buy crypto Coinbase

On the top right of the page, you will find the options to send and receive. This allows users to send crypto out of their Coinbase wallets or receive crypto from elsewhere into their Coinbase wallets. While most crypto-first exchanges do offer the ability for users to withdraw to their own private wallets, this is unfortunately not the case for some other brokers and exchanges out there. This ability is hugely important to investors who wish to make sure their holdings are safe and secure in their own offline wallets.

Coinbase Pro

While Coinbase is an incredibly simple on-ramp to crypto investment for those who are just starting out, Coinbase Pro offers a far larger and more robust charting and trade experience.

Regular Coinbase users can purchase crypto using market orders that experience high fees compared to other exchange options out there. With that in mind, Coinbase wanted to create a free option for Coinbase users to graduate to when they were a bit more prepared. With Coinbase Pro, users can place market, limit, and stop orders with lower commission fees. Coinbase Pro also has the option of margin trading and has significantly fancier charting capabilities.

Traders using Coinbase Pro can see as short-term as one-minute candle or line charts and can use overlays like exponential moving averages. Currently, the only two available overlays and indicators are EMA (12) and EMA (26). Coinbase Pro also has over 80 trading pairs available. Compared to other serious trading tools out there, Coinbase Pro is still bare-bones with regard to indicators.

While the standard Coinbase platform is a great tool to help people understand how easy it is to purchase, store, and move cryptocurrency, Coinbase Pro is, by far, a better platform for those who wish to actively trade or invest with lower fees and more features.

Fees

Coinbase has an incredibly convoluted fee system that is also quite expensive if you are not using Coinbase Pro. The cost of trading on Coinbase's standard platform is quite high in comparison to its competitors. Those who are new to crypto and are looking for ease of use may overlook this.

Coinbase’s fees vary across different countries and regions, but for the purposes of this review, we will focus on fees within the United States.

In addition to these fees, Coinbase also charges variable spreads on purchases and trades. Coinbase says that they typically charge about 0.50% for the purchase and sale of cryptocurrency. Market fluctuations can make this higher or lower.

There is also a "Coinbase Fee" in addition to the spread and the cost of depositing money mentioned above in the chart. This fee is dependent on the value of the purchase, payment type (debit/credit), and region you are purchasing from.

Coinbase gives the following examples of "Coinbase Fees" one might experience on its platform:

  • If the total transaction amount is less than or equal to $10, the fee is $0.99 | €0,99 | £0,99 
  • If the total transaction amount is more than $10 but less than or equal to $25, the fee is $1.49 | €1,49 | £1,49
  • If the total transaction amount is more than $25 but less than or equal to $50, the fee is $1.99 | €1,99 | £1,99
  • If the total transaction amount is more than $50 but less than or equal to $200, the fee is $2.99 | €2,99 | £2,99

Coinbase Pro Fees

Coinbase Pro fees are significantly less expensive and less complicated. With Coinbase Pro, digital assets and ACH transfers are free to deposit and withdraw. Wire transfers are $10 to deposit and $25 to withdraw.

Security

Coinbase uses a variety of safety measures for account holders. It is important to understand that any crypto on any exchange account is only as secure as the account holder makes them. It is imperative to use strong passwords and to utilize the available security features like two-step verification.

Coinbase has two-step verification, biometric fingerprint logins, insurance in the event that Coinbase itself is breached (this insurance does not apply if your account is breached due to your own lack of security measures), and also stores 98% of users' funds in offline cold storage.

Digital currency is not considered legal tender and therefore is not backed by SIPC or FDIC. Coinbase provides insurance by pooling Coinbase balances and holding them in USD custodial accounts, USD denominated money market funds, or liquid U.S. Treasuries.

Coinbase provides a solid amount of security in comparison to a number of other leading exchanges. This is one of the reasons why Coinbase is a great offering for those looking to safely get started investing in cryptocurrency.

That said, the premise of cryptocurrency is to remove intermediaries where possible and to be in total control of your own funds. While Coinbase does provide an easy entry to cryptocurrency investing, it is important to learn about proper cryptocurrency security and storage. Savvy crypto investors may use Coinbase Pro for its reduced fees and then withdraw their holdings to their own secure cold storage.

Opening a Coinbase Account

Signing up for Coinbase is a very straightforward and easy process. First, you enter your name, email, and a password you wish to use. It will then tell you to verify your email. Next, Coinbase asks you to enter in your phone number to send a code that you must enter. Coinbase will later use this number to send two-step verification codes. After this stage, it will prompt you to enter your identification information.

Just like any bank account or investment account, you must prove your identity via state identification. For users in the United States, this will require a social security number. At this point, your Coinbase account will have been created and you would then be able to add your bank account, credit card, or debit card information to enable deposits and withdrawals so that you can start trading or investing.

Verdict

Coinbase is an ideal tool for new crypto investors who may not have any other investment experience. While the standard platform is overpriced, its features, like its learn program and the ability to easily set up recurring purchases, provide the inexperienced with a clear path to becoming invested and actually understanding cryptocurrency.


Those with more trading experience will find that Coinbase Pro is a cheaper and more robust option, but it is still lacking in terms of features. If you wish to trade seriously, you may find that Coinbase is not the right fit for you. Overall, Coinbase is designed with the beginner in mind.

Methodology

Investopedia is dedicated to helping those interested in cryptocurrency investing make informed and safe decisions. We are committed to providing our readers with unbiased reviews of the top cryptocurrency exchanges for investors of all levels.

Exchanges are only considered for review if they are safe, secure, liquid, and either regulated by a proper agency or entirely decentralized.