Coinbase Review – The Leader in Crypto Trading
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There’s a lot to love about Coinbase, but it has higher fees than most other exchanges.
8.5/10
Cost
7/10
Features
8/10
Ease of use
9/10
Services
9/10
More and more people are looking for platforms to buy, sell, and trade cryptocurrencies with. From getting your hands on Bitcoin (virtually, of course) to trading other digital currencies like Ethereum, Litecoin, Zcash, or Algo, you’ll need to make an account with a cryptocurrency exchange to get into crypto trading since most brokerages don’t offer cryptocurrency trading (and if they do it’s generally limited to a few coins like BTC or Bitcoin Cash).
One of the most popular and largest crypto exchanges is Coinbase, which offers a self-hosted cryptocurrency wallet for your digital assets and the ability to buy, sell, and use cryptocurrency. Keep reading for an overview of what to expect when setting up a Coinbase account, as well as the ins and outs of the Coinbase platform so that you can better decide whether or not the features Coinbase offers are right for you and your financial situation.
In this article
What is Coinbase?
Coinbase was founded in 2012 to make it easy for anyone to send and receive Bitcoin. Since those humble beginnings, Coinbase has become one of the largest cryptocurrency exchanges on the market, operating in over 100 countries and allowing people to trade more than 170 cryptocurrencies.
Coinbase delivers on those goals by prioritizing ease of use, a transparent fee structure, and useful features and tools to store your crypto coins in a cold storage Coinbase wallet and look up the latest pricing information on various coins. From managing your portfolio to setting up recurring purchases and extra security features like time-delayed withdrawals, Coinbase is an excellent all-in-one platform for getting involved in the cryptocurrency market.
Coinbase One
If you’re a more serious investor, you can also check out Coinbase One, which comes with $0 trading fees, dedicated phone support round the clock, and $1 million account protection. This is a subscription service that costs $30 per month.
How does Coinbase work?
Signing up for Coinbase is simple, thanks to its easy-to-use interface and simple account creation process. First, navigate to Coinbase and select the blue “Get Started” button in the top-right corner of the screen.
As a welcome gift, once you’ve verified your identity with a photo ID, you’ll be able to get $5 in Bitcoin as part of a limited-time offer. You’ll need to verify your email address.
To start with account creation, you’ll need to enter your first and last name. It’s also important to add an email address and password, which you’ll use to log in to Coinbase and access your account. You’ll also need to choose the state or territory where you reside and agree to the terms and conditions.
After you’ve verified your email address, you’ll also need to verify your phone number to set up Two-Factor Identification. Two-factor identification makes your account more secure. Finally, you’ll need to verify your identity.
To verify your identity, you’ll enter your first and last name, as well as your address and date of birth. You’ll also enter the last four digits of your social security number and answer a few questions about what you plan on using Coinbase for, where your funds are coming from, and your employment status.
The options for the dropdown about what you’ll use Coinbase for include investing, trading, and online purchases. The source of funds could be your occupation, inheritance, crypto mining, or business. After completing your account registration, you can add funds and start creating your cryptocurrency portfolio.
How much does Coinbase cost?
Setting up a Coinbase account is free; however, as with any other brokerage or crypto exchange, you will be charged some fees when you make trades. For example, you can expect fees on the trading platform to range between 0% and 3.99%, depending on the transaction you’re completing.
Beyond these Coinbase fees, Coinbase users may also come into contact with some charges when converting their crypto assets to fiat currency. Coinbase charges a spread margin of up to 2% for cryptocurrency conversions, eliminating a middle step when trading one currency for another. For example, you could convert Ethereum classic to Basic Attention Token (BAT) without executing as many sells and buys with a Coinbase conversion.
Coinbase also charges various fees based on the payment method you use to buy assets. These can vary based on whether you’re using a wire transfer, ACH deposit, PayPal, or a credit or debit card. For example, wire transfer deposits to your Coinbase wallet will cost $10, while deposits from your bank account and USD wallet will cost 1.49% of the transaction size. If you choose to deposit from a debit or credit card, you can expect to pay a fee of 3.99%. ACH transfers are free.
Coinbase features
Portfolio management
Whether you’re only looking to invest in a single cryptocurrency or are planning on trading between multiple coins while having the option to hold some stablecoins like Dai, Coinbase is great for managing your portfolio. If you’re looking to boost your Coinbase account a little bit more, you also have the option to earn up to $28 of various other cryptocurrencies while you learn about blockchain technology and other crypto concepts. This means you’ll better understand how to manage your portfolio and make the most of the charts and other tools Coinbase offers its users.
Security and vault protection
Security is a major benefit of using Coinbase. With options like Two-Factor Authentication and biometric scanning on the mobile app, keeping your crypto portfolio safe on Coinbase is even easier. Perhaps best of all, the FDIC insurance provided on the exchange means that your assets are insured for up to $250,000 if a security breach jeopardizes your portfolio.
Mobile app
Many traders like to be able to keep up with their portfolios on the go. The Coinbase mobile app makes this easy, so if you need to quickly hop over to the app from Twitter to capitalize on a liquidity event, you won’t have to wait to be near a computer.
Resources that let you “earn while you learn”
To better understand how Coinbase and cryptocurrency work, many of the learning resources on Coinbase allow you to earn some cryptocurrency while you learn. By watching educational videos and answering quiz questions, you can add a little more to your crypto portfolio and learn a lot more about the assets you’re investing in in the first place.
Who is Coinbase best for?
Beginners in crypto
If you’re new to crypto investments, Coinbase is a solid option to make an account with. They have everything you need to buy, sell, and trade cryptocurrencies. With built-in crypto wallets to store your investment, an easy-to-use interface, and learning resources that pay you to complete them, there are a lot of incentives for beginners when it comes to creating a Coinbase account.
Investors who want advanced charting
If you want to take advantage of some advanced tracking features and more trading options, Coinbase is a great option, too. Especially if you’re worried about tracking various fees and expenses in the non-pro version, Coinbase One is a great choice. That being said, it’s worth noting that if you’re new to crypto, the advanced features offered by Coinbase could be a bit intimidating. As such, it’s only recommended for intermediate to advanced crypto traders.
Who shouldn’t use Coinbase?
Fee-conscious traders
There are a lot of pros to using Coinbase; however, if you’re worried about losing money in trading fees, you’re better off looking at other options. Coinbase’s fees tend to be higher than other online crypto exchanges. From basic trading to taker fees, if you do some research, you’ll likely find less expensive exchanges online to work with.
Pros and cons
Pros
- Simple and straightforward. A major benefit of using Coinbase is how easy it is to use. The website features a clean design, and there’s a lot of transparency about the cryptocurrencies you’re investing in, fees, and other details surrounding any of the transactions you might make on the platform.
- Supports 170+ cryptocurrencies. While it isn’t the most robust exchange out there, Coinbase boasts 170+ cryptocurrency pairs to trade between. As such, it’s a great exchange that will allow you to do most of the trading you want to achieve online with crypto.
- Great learning resources. Especially for beginners, it’s great to use a platform that empowers you to trade cryptocurrency and better understand the technology underpinning the crypto-economy. Many learning resources even incentivize your completion and can help you boost your earnings.
Cons
- Fees are higher than other exchanges. There’s a lot to love about Coinbase, but if you’re trying to be cognizant of how much of your investment you give to an exchange in fees, you can find more competitive options elsewhere.
- Only email support. Other exchanges have many more options for customer support, including by telephone and live chat. While Coinbase has an emergency phone number if you need to deactivate your account, you’re almost always going to need to contact them via email if you need support.
- Not all of Coinbase's features are beginner-friendly. If you want to get the most from Coinbase and take advantage of various trading approaches, you’ll likely be creating a Coinbase One account or using other options. While that will get you more advanced features, they aren't as easy to use and understand for beginners as the standard Coinbase platform.
Coinbase vs. competitors
As mentioned in this review, Coinbase isn’t the only cryptocurrency exchange. Kraken, Binance, and Robinhood are other platforms that allow you to buy, sell, and trade various cryptocurrencies. Here’s a quick overview of some of the differences between these platforms.
Platform | Cryptocurrencies supported | Fees | Margin trade |
Coinbase | 220+ | 0% to 3.99% | Yes |
Kraken | 120+ | 0.16% to 2% | Yes |
Binance | 200+ | 0% to 3.75% | Yes |
Robinhood | About 15 | Free | No |
Kraken
As far as exchanges go, Kraken has much more attractive fees than Coinbase and offers the option to buy, sell, and handle margin trades and limit orders. It may have competitive fees, but its user interface is different. Nevertheless, it’s still a solid exchange for crypto trading.
Binance
Binance supports fewer crypto pairs than Coinbase, but its fees are also much less. You still have many trading options on Binance, so as long as you’re not looking to take advantage of some of the more obscure crypto pairings, you may be fine using Binance. That being said, Coinbase and Kraken have much more to offer, so if you think you’ll be interested in getting into other cryptocurrencies as you get your feet, it may make sense to pick a platform with a broader number.
Robinhood
Robinhood is pretty appealing, thanks to its commission-free fee structure. That being said, Robinhood limits your crypto buying to only 15 options. If you’re interested in trading anything beyond the mainstream tokens, you’re better off picking a larger exchange.
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FAQs
Are there limits to who can create a Coinbase account?
Yes. You must be at least 18 years old to create an account on Coinbase. Additionally, residents of Hawaii are not able to create an account on Coinbase. You’ll also need to verify your identity, so you’ll need to have a social security number.
Is Coinbase regulated?
Yes, Coinbase follows all local regulations where it operates. In the United States, this includes the Patriot Act, Bank Secrecy Act, and laws around transmitting money electronically.
Do I have to pay taxes on my investments?
>Yes. Any time you make a trade that results in a gain, you may trigger needing to pay capital gains tax. If you hold cryptocurrency assets, it’s important to talk to a tax advisor to learn more about the financial repercussions of buying, selling, or trading crypto. The IRS has issued more guidance about cryptocurrency and other digital assets, so it’s crucial to understand what sorts of things you’re investing in and what your tax implications are before creating an account in Coinbase.
The bottom line
Coinbase is one of the leading cryptocurrency exchanges, combining a few features that make it a great all-in-one solution for beginning traders or those interested in getting started in the crypto world. Coinbase even offers a crypto wallet to store your cryptocurrency safely and has plenty of security features to protect your investment. If you’re someone who wants to be able to react to changes in cryptocurrency markets as soon as changes begin, you’ll have peace of mind knowing that Coinbase offers a mobile app for smartphones. This combines to make it an incredibly attractive platform, particularly if you’re new to cryptocurrency.
Even though there’s a lot to love about Coinbase, other options are on the market. When Coinbase has higher fees than most other exchanges, it’s worth looking at all your choices before creating an account. That being said, with more advanced features offered through Advanced Trade and a reputation for security, Coinbase is a solid option to consider.
Ultimately, which platform you use is a personal choice. It’s important to find a cryptocurrency exchange that caters to your needs, and it is just as important to find one that you feel comfortable using. Coinbase is easy to use and has many features that could make it the right option for you—as long as you aren’t as concerned with higher fees. Even so, although Coinbase’s platform follows local financial regulations, the cryptocurrency market itself isn’t regulated, so keep in mind that investing in digital securities is inherently riskier than other forms of investment, such as the stock market or bonds.
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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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