Cryptocurrency continues to rise in popularity each day. Many new and experienced investors are trying to find ways to add it to their portfolio. As a different asset type, crypto could be a great way to diversify a portfolio.
With all this newfound hype, many individuals are trying to determine the best platform to use to trade crypto. This can be tough as there are many options to choose from.
So, have you made your first crypto purchase yet? Still searching for the right platform to trade cryptocurrency? What is Coinbase and how does it work? In this article, we provide a complete Coinbase review. We intend to answer those questions and more.
Coinbase is on the leading edge when it comes to cryptocurrency. With a full host of features and various abilities within the platform, Coinbases caters well to both new and advanced crypto traders.
While the platform does offer tons of benefits, they do charge high fees for trading. The fee structure can be confusing, but we explain it here in this review.
All in all, Coinbase is a great platform to get started with crypto. They offer so much more than just buying and selling cryptocurrency.
Coinbase, often considered the leader in crypto trading, was created in California in 2012. While many investors are just getting into cryptocurrency trading, Coinbase has been around for a while. In fact, the platform was even created before Robinhood, which was launched in 2013.
Now that crypto is becoming ever more popular, Coinbase continues to grow its membership base. With over 56 million account holders, Coinbase leads the way due to its incredibly simple user interface. Individuals can create an account and start trading in just a few minutes.
While other competitors also offer crypto trading, Coinbase offers the ability to trade over 50 cryptocurrencies. As a reference and at the time of this writing, Webull offers 5 and Robinhood offers 7. This extreme variety has certainly helped grow the popularity of Coinbase.
In addition to trading crypto, account holders can also receive loans, automate investing, learn more, and earn rewards with a crypto Visa debit card.
Due to the fact that cryptocurrency is not regulated by an exchange, and therefore not FDIC or SIPC insured, many worry about the security of crypto platforms. With a free digital wallet and the ability to transfer coins into a cold wallet, many investors feel secure with Coinbase. We will dive into the security of Coinbase in more detail below.
Cryptocurrency, also known as crypto, is a digital currency that can be used for various transactions. Some companies, such as Microsoft and AT&T, currently allow individuals to make payments using Bitcoin.
Rather than being issued and secured by a central authority, cryptocurrency is secured by cryptography and is managed on a decentralized network which uses blockchain technology. This appeals to many as this technology makes crypto nearly impossible to counterfeit. Cryptocurrency is secured through an online ledger, which is managed across a host of computers.
While Coinbase is primarily used to trade cryptocurrency, it also offers members a number of other features such as an advanced trading platform, Visa debit card, and a way to earn crypto while learning.
One of the key benefits of using Coinbase is the vast number of cryptocurrencies available on the platform. Many competitors offer less than half the number Coinbase offers.
Coinbase provides a complete list of cryptocurrencies that they offer on their website.
While they have over 50 to choose from, some are only available in the US. Furthermore, a few of their offerings are not yet available in New York. The link mentioned above does highlight where the cryptos can be traded.
Trading with Coinbase Pro does offer users a few additional cryptos for trading and sending to others.
Many investors are often confused between the difference between Coinbase and Coinbase Pro. Coinbase is designed for beginners, while Coinbase Pro was created for advanced users.
In Coinbase, users can buy and sell crypto and transfer to a cold wallet if desired. They will have access to basic charting and price alerts. With Coinbase Pro, account holders will have additional access to advanced charting and order types (Market, Limit, and Stop orders). Trading on Coinbase Pro also features smaller fees as the Pro version was created for users that are more active traders.
Both accounts use the same login and offer free storage. If signing up for Coinbase Pro and you do not have a Coinbase account, the platform will have you create a Coinbase account before proceeding.
Both platforms offer a unique app for iOS and Android.
Coinbase is a cryptocurrency brokerage where you trade cryptocurrency. Within Coinbase, you can also store your cryptocurrency after purchase. However, if you want to have greater control over your crypto, you can also store it in another wallet. Think of it like the relationship between a bank and a physical wallet. The bank can store your money for you, or you can store it on your own using a wallet or a safe, etc.
Some choose to store their cryptocurrency in a cold wallet, or a storage device that is not connected to the internet. Coinbase wallet is not a cold wallet, but it is safer than storing crypto within the regular Coinbase platform because you get to control your own private keys on your own device.
With Coinbase Wallet, the private keys, which prove ownership, are stored directly on your device and not within a centralized exchange like Coinbase.com. This can offer investors an extra layer of protection.
The Coinbase Wallet is a unique and separate app that can be downloaded for both iOS and Android. The Coinbase wallet is also completely free to use.
You do not need a Coinbase.com account to use Coinbase Wallet. Even if you do not use Coinbase to buy and sell crypto, you can still use their decentralized app to store your crypto.
One of the downsides of trading with Coinbase is the fee structure. While other competitors offer trading for free, Coinbase does charge a fee to do so. Their fee structure can be a bit complex and confusing.
The fees that Coinbase charges will depend upon the amount of crypto you are buying. If purchasing crypto from a bank account or cash balance from the US, the fee is 1.49%. However, they also have a flat fee structure, and if the flat fee is more than 1.49%, then the flat fee will be charged. When purchasing with a debit card or through PayPal, the fee is 3.99%.
The flat fee is as follows:
|Crypto Purchase in Dollars||Flat Fee|
|Less than $10||$0.99|
|$10.01 to $25.00||$1.49|
|$25.01 to $50.00||$1.99|
|$50.01 to $200||$2.99|
Remember, Coinbase will charge the greater amount. If the flat fee is more, then they will charge the flat fee. But if the percentage is more, then they will charge the percentage.
Let's look at an example. If you are purchasing $100 worth of Bitcoin from a US bank account, then the charge will be $2.99. The 1.49% would be less than the flat fee, so in this case, they would charge the flat fee.
You can learn more about Coinbase fees by exploring their help page.
In addition to trading and storing crypto, account holders can also receive a debit card to use their crypto for transactions. This new card is accepted anywhere a Visa card is accepted.
The Coinbase Visa card offers members 4% back in rewards whenever a purchase is made. The card also has zero annual fees or sign up fees.
Coinbase Earn is a great way to learn about trading cryptocurrency. Members can explore various topics regarding cryptocurrency and watch videos to learn more. After a video is complete, members will be able to take a quiz. Each completed quiz will earn users cryptocurrency that is transferred to their account.
Videos are available for a limited time only! So it is important to periodically check the platform for new videos.
Within Coinbase, account holders can also receive loans using Bitcoin as collateral. Rather than selling your Bitcoin, you can actually receive cash for short term needs. Bitcoin is the only currency that can be used as collateral.
The maximum loan is $100,000. Coinbase requires a 30% LTV and charges a rate of 8% APR with a term of 1 year.
It is important to ensure that the loan health remains above 40%. If the health does drop below 40%, Coinbase will sell off a portion of your collateral to bring the health back to 50%.
Learn more about Coinbase loans with our full Coinbase Margin Review.
Transferring Coins is a great feature on Coinbase. Many platforms, such as Robinhood or Webull, do not allow any coin transfers. With Coinbase, account holders can transfer their crypto to another wallet like Coinbase Wallet or a cold wallet they own.
When in the app, you can transfer coins by pressing the center button along the bottom menu. This will bring up 5 options.
Sending and receiving will require verifying your account through a photo ID.
Like other platforms, Coinbase takes security very seriously. They offer users multi-authentication factors and SSL encryption. With that in mind, users should still ensure a strong password.
Coinbase is one of the only crypto platforms to provide insurance on their assets. Crypto held in Coinbase's platform is insured against hacking. (This does not cover hacking on an individual account, but to Coinbase as a whole.) Furthermore, 98% of the assets stored on the platform are held in cold wallets.
They also have FDIC insurance for cash deposits. This insurance does not extend to cryptocurrency.
Because crypto is not regulated by a central authority, many choose to store their crypto in a cold wallet, which offers further protection.
Coinbase is a great place for new and experienced investors with a specific platform designed for both groups. The Pro version offers members advanced charting and order types. If this version is too complex, members will find Coinbase to be more comfortable.
In addition to buying, selling, and storing crypto, account holders also have access to perform transactions using the Coinbase Visa Card. This debit card offers 4% in rewards and has no fees.
Members will also find other benefits such as receiving loans and earning more while learning.
While Coinbase does have great features, it is important to recognize that they also have relatively high trading fees.
Coinbase could be the platform for you if any of the above features interest you. Getting started can be done quickly all from your phone!