Coinbase Review – The Leader in Crypto Trading

Cryptocurrency is finally having its day in the sun after being more of a fringe investment strategy for years. As a result, 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 in order 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 as well as the ability to buy, sell, and use cryptocurrency. Keep reading for an overview of what to expect when it comes to 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.

What is Coinbase?

Coinbase was first founded in 2012 to make it easy for anyone, regardless of their location, to send and receive Bitcoin. Since those humble beginnings, Coinbase has grown to be one of the largest cryptocurrency exchanges on the market to create a fair and accessible “crypto-economy.”
Coinbase delivers on those goals by prioritizing ease of use and a transparent fee structure, as well as useful features and tools to store your crypto coins in a cold storage Coinbase wallet and look up the latest pricing information on a variety of coins. From managing your portfolio to set 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 Pro

If you’re a more serious investor, you can also check out Coinbase Pro which offers a wider range of transactions and charting options than the entry-level version of Coinbase. Originally launched as GDAX, the platform was later rebranded to Coinbase Pro. If you’re interested in using limit orders or stop orders on Coinbase, you’ll need to have a Coinbase Pro account. Trading fees on Coinbase Pro range from 0% to .5% and come with the same FDIC insurance policy, authentication, and encryption offered you’d get using Coinbase.

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.
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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 in which you reside and agree to the terms and conditions.
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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.
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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.
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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 what your employment status is.
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’ll be able to add funds to your account and get started creating your cryptocurrency portfolio.
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How much does Coinbase cost?

Setting up a Coinbase account is free-of-charge; however, as is the case with any other brokerage or crypto exchange, you’re going to be charged some fees when you make trades. For example, you can expect transaction fees on the trading platform to range anywhere between .5% and about 4.5%, depending on what sort of transaction you’re completing.
Beyond these Coinbase fees, Coinbase users may also come into contact with some charges when they’re converting their crypto assets to fiat currency. Coinbase charges a spread margin of up to 2% for cryptocurrency conversions, too, which eliminates a middle step when trading one currency for another. For example, you could convert Ethereum classic to Basic Attention Token (BAT) without having to execute 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 a PayPal transfer is 2.5% and an ACH transfer is free after Coinbase waives the difference from its baseline 4% fee.

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 as well, Coinbase is great for managing your portfolio. If you’re looking to boost a little bit more money in your Coinbase account, you also have the option to earn up to $28 of other various cryptocurrencies while you learn about blockchain technology and other crypto concepts. This means that 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. Only 2% of all funds are held online while the rest are stored in cold storage, which makes Coinbase an incredibly secure place to hold your digital assets. With options like Two-Factor Authentication and biometric scanning on the mobile app, it’s even easier to keep your crypto portfolio safe on Coinbase. Perhaps best of all, the FDIC insurance provided on the exchange means that your assets are insured 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 to do so.

Resources that let you “earn while you learn”

To better understand how Coinbase and cryptocurrency in general works, 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?

People just getting started with crypto

If you’re new to the world of crypto investments, Coinbase is a solid option to make an account with. They have everything you need to get started buying, selling, and trading cryptocurrencies and support over 50 different crypto pairings. 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 to beginners when it comes to creating a Coinbase account.

Investors who want advanced charting (Coinbase Pro)

If you want to take advantage of some advanced tracking features and more trading options, Coinbase Pro (formerly known as GDAX) is a great option, too. Especially if you’re worried about tracking various fees and expenses in the non-pro version, Coinbase Pro is a great choice. That being said, it’s worth noting that if you’re new to crypto the advanced features offered by Coinbase Pro 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 a bit of research you’ll likely find less expensive exchanges online to work with.

Pros & 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 50+ cryptocurrencies. While it isn’t the most robust exchange out there, Coinbase does boast a whopping 50+ cryptocurrency pairs to trade between. As such, it’s a great exchange that will allow you to do most of the trading you could ever want to achieve online with crypto.
  • Great learning resources. Especially for beginners, it’s great to get to use a platform that not only empowers you to trade cryptocurrency but also better understand the technology underpinning the crypto-economy. Many of the 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 a lot more options when it comes to customer support, including by telephone and live chat. While Coinbase does have an emergency phone number if you need to deactivate your account, you’re almost always going to need to reach out to them via email if you need support.
  • Coinbase Pro isn’t beginner-friendly. If you want to get the most from Coinbase and want to take advantage of a variety of trading approaches, you’ll likely be creating a Coinbase Pro account. While that will get you more advanced features, Coinbase Pro isn’t as easy to use and understand for beginners as the standard Coinbase platform.

Coinbase vs. Kraken vs. Binance vs. Robinhood

As has been mentioned elsewhere 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 each of these platforms.
PlatformCryptocurrencies supportedFeesBuy/SellLimit orderMargin trade
Coinbase50+3.99% or lessYesYesYes
Kraken100+0.26% or lessYesYesYes
Binance30+0.10% or lessYesYesYes
Robinhood7FreeYesYesYes

Kraken

As far as exchanges go, Kraken has the most cryptocurrencies supported of pretty much any platform. They also have much more attractive fees than Coinbase and offer the option to buy, sell, and handle margin trades and limit orders. While it doesn’t have the most competitive fees and its user interface is different, it’s still a solid exchange to consider using for crypto trading.

Binance

Binance supports fewer crypto pairs than Kraken or Coinbase, but its fees are also much less. You still have a lot of 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 a lot 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 seven options. If you’re interested in trading anything beyond Bitcoin, Litecoin, Ethereum, and Dogecoin, you’re better off picking a larger exchange.

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 different features that make it a great all-in-one solution for beginning traders or those interested in getting started in the world of crypto. Coinbase even offers a crypto wallet for you to safely store your cryptocurrency, and has plenty of security features to protect your investment. If you’re someone who wants to be able to react to change in cryptocurrency markets as soon as changes begin, you’ll have peace of mind knowing that Coinbase offers a mobile app for smartphones. All of 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, there are other options on the market. Particularly when Coinbase has higher fees than most other exchanges, it’s worth taking a look at all of your choices before you create an account. That being said, with more advanced features offered through Coinbase Pro and a solid reputation for security, Coinbase is a solid option to consider.
Ultimately, which platform you use is a personal choice. It’s important that you find a cryptocurrency exchange that caters to your needs, and is just as important to find one that you feel comfortable using. Coinbase is easy to use and has a lot of 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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