Coinbase Review

Pros Explained

• Easy to use for cryptocurrency beginners: The main Coinbase website and mobile app are very easy to use and allow you to buy, sell, and exchange cryptocurrencies quickly.
• Support for a large number of cryptocurrencies: Coinbase currently supports over 250 currencies for trading, and the number grows regularly.
• Opportunities to earn cryptocurrency: Earn interest on eligible balances, or earn money for completing crypto education courses with Coinbase Learning Rewards.

Cons Explained

• High transaction fees: Transaction fees are often expensive on the primary Coinbase platform.
• Customer service issues: Coinbase gets poor marks for customer service, even when account holders witness serious security issues.
• Coinbase controls your private keys: On their main platform, Coinbase holds and controls your private keys, which represent ownership of your cryptocurrency. Only with Coinbase wallet can you hold your own private keys.

Introduction

Coinbase is a cryptocurrency trading and investing platform that offers users the ability to buy, sell, and exchange over 250 tradable cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin. Coinbase is a large company with over 110 million users and over $80 billion in assets on the platform.

Beginners will likely prefer the original Coinbase platform for simple buy and sell orders. In November 2022, the company began the migration of more advanced Coinbase Pro accounts to a new advanced platform called "Advanced Trade."

Cryptocurrencies are a relatively new asset class that can be risky and volatile, which isn’t suitable for all investors. However, if you’re interested in cryptocurrency, Coinbase is an excellent option for newbies and veterans alike.

Company Overview

Coinbase was founded in 2012 as a place to send and receive Bitcoin. With more than 4,500 employees worldwide, the company has grown to support dozens of unique cryptocurrencies. Coinbase is a decentralized company with no main headquarters.

Coinbase operates with users in more than 100 countries, and customers trade approximately $145 billion per quarter. Coinbase manages a robust cryptocurrency ecosystem supporting 13,000 financial institutions.

Coinbase runs two separate trading platforms in addition to a standalone cryptocurrency wallet service. Between the suite of Coinbase products, you’re likely to find anything you need to start and manage a cryptocurrency portfolio or trading plan.

Cryptocurrencies Available on Coinbase

Coinbase supports the trading of more than 250 cryptocurrencies and regularly puts new coins on the list. There are too many to list here, so here’s a glance at some of the most popular digital currencies on Coinbase:

• Bitcoin (BTC)
• Ethereum (ETH)
• Cardano (ADA)
• Solana (SOL)
• Polkadot (DOT)
• USD Coin (USDC)
• Dogecoin (DOGE)
• Uniswap (UNI)
• Litecoin (LTC)
• Shiba Inu (SHIB)
• Stellar Lumens (XLM)
• Polygon (MATIC)

Trading Experience

As mentioned above, the company runs two different platforms known as Coinbase and Advance Trade. Each allows you to buy, sell, and trade cryptocurrencies but offers unique features.

Coinbase

Trading on Coinbase is beginner-friendly and easy to use for anyone with basic computer skills. Coinbase is available on the web or through Android and iOS mobile devices. If you’ve ever traded stocks through an online brokerage, you’ll find a somewhat similar experience.

On the main dashboard, you’re able to view your Coinbase portfolio, and you’re never more than a couple of clicks away from a screen to buy and sell currency.

Cryptocurrency markets operate 24/7, so you can log in and enter a trade at any time. Purchases are available using funds in your account or directly through a connected bank account or card. Additional fees may apply depending on how you pay for your crypto purchase. Purchases are credited to your account instantly, though you may have to wait for your deposit to clear before making a withdrawal.

Advanced Trade

Advanced Trade is Coinbase's advanced trading platform, replacing Coinbase Pro in late 2022. Advanced Trade offers enhanced tools like interactive charts powered by TradingView, advanced order types, and more features that cater to active traders.

Fees

Coinbase is not forthcoming with its pricing and fees and removed its full fee schedule from the Coinbase online help section. However, costs are shown on the trade screen when entering a trade, so you know what you’re paying before you enter a trade.

These are the fees you can expect on the main Coinbase platform:

Trades above $200 have a percentage-based fee rather than a flat fee.

Other fees may be charged for certain account funding and withdrawal methods, and other less common services:

*Fees were confirmed through a test trade

Coinbase's exchange uses a maker-taker fee structure. Fees begin at 60 basis points for takers and 40 basis points for makers. From there, fees decrease with higher trade volumes. With all of the possible fees from Coinbase, it's advisable to pause before executing a trade or purchase, and understand what you're going to be charged first.

Security

Coinbase uses industry-leading security practices to keep customer deposits and assets safe. That said, there are always some risks when using cryptocurrency, so it’s essential to follow online best practices to keep your account information secure.

Notably, the majority of customer assets are stored offline using cold storage that is kept in secure, guarded locations. It uses bank-standard encryption and security for its website. In addition, all accounts must use two-factor authentication, a measure to help prevent others from logging into your account unless they have physical access to your phone.

Even with these strong security methods, thousands of users have fallen victim to hackers and schemes that have drained their accounts. One example is the security breach that occurred between March and May 2021 and affected over 6,000 users.

It’s essential to use unique, random passwords on financial websites such as Coinbase to prevent this type of loss. If someone has access to your email or phone, they may be able to access your account, so always keep those private.

Opening a Coinbase Account

Signing up for Coinbase is a reasonably quick and easy process similar to opening a new bank or brokerage account online. Plan on entering your personal contact information, including your Social Security number, to open a fully verified account.

New account holders have to submit a picture of a government ID to prove they’re who they say they are. If you’ve heard that cryptocurrency is anonymous, this should be your evidence that Coinbase may track your transactions for tax reporting and other regulatory reasons.

Once you’ve set up your account and your information is verified, you’re able to buy and sell cryptocurrency up to your Coinbase account limits.

Customer Service

Customer service is one of the most significant issues users have with Coinbase. While live chat is offered, consider Coinbase to be primarily self-service. Many users complain about customer service and lack of assistance with issues. Customer service options are the Coinbase help page, emailed support tickets, live chat, social media, and a chatbot. There is no phone support.

Customer Satisfaction

When all works as expected, you’re likely to find yourself to be a happy customer. But sometimes, things don’t go as planned, and customer reviews indicate poor customer service experiences and little help navigating scams, hacked accounts, and locked accounts.

At Trustpilot, for example, Coinbase holds a rating of just 1.5 stars with over 8,500 reviews. Most complaints focus on customer service, lost funds, and frozen accounts. Customers at other rating sites left similar complaints.

Coinbase also suffers from a problem that seems to be plaguing many industry competitors. In fact, thousands of complaints were filed with the Consumer Financial Protection Bureau, and many past users claim they’ve been left with little to no support after losing funds due to hacked accounts. Additionally, Coinbase was hit with a civil penalty of over $6 million by the Commodity Futures Trading Commission.

Account Management

You can view and manage your account at any time using the Coinbase website and mobile app. You’re never far from viewing your portfolio balance or entering a trade:

If you want to manage your crypto on the go, the mobile app has everything you need:

How Coinbase Compares to Other Cryptocurrency Companies

The cryptocurrency marketplace is evolving quickly with new competitors. You also have the option to manage your cryptocurrency without a major centralized exchange like Coinbase. Major competitors to Coinbase include Gemini, Binance, KuCoin, Kraken, and many others.

Coinbase vs. Gemini

Gemini is one of the closest direct competitors to Coinbase. Here’s a head-to-head comparison:

• Gemini is more transparent about fees, sharing its full fee schedule online.
• Both are U.S.-based firms that cooperate with United States regulators, namely FinCEN (Financial Crimes Enforcement Network).
• Coinbase's main platform and Advanced Trade are comparable to Gemini’s main platform and ActiveTrader.

Aside from the user interface, the most significant differences are available currencies and opportunities to earn from your cryptocurrency account. Coinbase offers the option to earn up to 6% on a limited set of coins. Gemini offers staking currently on just two cryptocurrencies with interest rates up to 5.40%.

If you are interested in an account at Gemini, either in addition to or instead of a Coinbase account, check out the full Gemini review.

Final Verdict

Coinbase features a top platform for anyone to buy, sell, store, and exchange cryptocurrency. It’s particularly good for new crypto users who want a simple buying and selling experience without worrying about the complexities of external wallets and decentralized exchanges.

The biggest downsides of Coinbase are its pricing structure and customer service. If you can handle your account on your own and agree with the fees, Coinbase is an overall great choice for anyone looking to get involved with cryptocurrency.

Frequently Asked Questions

Can Coinbase be trusted?

Yes, Coinbase is a very well-known cryptocurrency trading platform with a high level of security designed to protect users. However, the company does face low customer support ratings when it comes to providing help with locked or hacked accounts as well as dealing with scams.

Is Coinbase good for beginners?

Yes, Coinbase is great for beginners because the app and website were designed for ease of use. It allows for cryptocurrency exchanges as well as simple buy and sell orders.

Should I give my SSN to Coinbase?

It is generally safe to give your Social Security Number (SSN) to Coinbase. It is one of the most well-known cryptocurrency trading platforms and it uses leading security practices to keep users' accounts protected. However, it's not completely without risk of hacking, and only you can decide if you wish to proceed and do so.

Is Coinbase FDIC insured?

No, Coinbase is not FDIC insured. Instead, the company offers crime insurance which covers some of the digital currencies within its system, protecting against theft and cybersecurity breaches. However, it does not cover unauthorized access to user accounts, such as if someone obtains your login credentials.

Does Coinbase report to IRS?

Coinbase does report to the IRS. It only reports Form 1099-MISC. Multiple different types of taxable income can be generated from activities on Coinbase including capital gains from buying and selling crypto, as well as interest income from things such as staking. U.S. customers should visit Coinbase Taxes to get everything they need to report taxable income from Coinbase.

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 were reviewed on points including security, fees, number of cryptocurrencies available, and more. We also considered if the exchange is regulated by a proper agency or entirely decentralized. Our full cryptocurrency exchange methodology, including the review process and weighted data points, is available for review.