Coinbase attracts mainly novice investors through ease of use, wide product variety, and high liquidity. It is one of the most renowned mainstream cryptocurrency exchanges in the US with users from all over the world. Coinbase features an advanced trading platform, cryptocurrency investing, a retail investor wallet, custodial accounts for institutions, and even its own USD-pegged stablecoin.
- Very simple user interface
- Wide variety of altcoins
- Very high liquidity
- Wallet keys not under user control
- High fees
Coinbase offers tens of cryptocurrencies for staking, investment, and trading. It’s probably one of easiest ways to get into crypto investments. It takes mere minutes to purchase coins. There is even an educational program that pays customers to learn more about how cryptos work – in crypto, of course.
This is one of the most liquid exchanges on the global market, which protects traders and investor in the context of high volatility. You’re protected even if prices plummet.
Drawbacks: High fees
Unless you’re using Coinbase Pro, you can expect to pay high fees. The exchange has relatively high fees compared to other exchanges. On the plus side, Coinbase Pro has lower ones and is free to switch to. However, the Pro version is better suited to traders with more experience. Its multitude of features can be overwhelming to beginners.
More limited user control
Users can’t control their own wallet keys which, admittedly, is true for most exchanges of this type. Still, it’s a drawback for all of them. Coinbase controls the wallet where your cryptos are stored. If you withdraw your coins to a personal wallet, you’ll be able to control them. Ideally, it should be a hard wallet.
Some users complain that there aren’t enough altcoins to choose from. The exchange is always adding more and more options, so this con will be remedied soon. If you’re looking for a really vast variety you should look elsewhere at this point. They do have the ones with the highest market cap.
The exchange’s fee system is a bit complicated – and costly. People looking for an intuitive platform that makes trading easy will overlook this, especially if they don’t have much trading experience. The exact fee depends on the region and country. In the US, the fee system is as follows:
Payment Method Coinbase Fee
- Coinbase USD Wallet: 1.49%
- Bank Account: 1.49%
- Debit/Credit Card: 3.99%
- Wire Transfer: $10 ($25 outgoing)
- ACH Transfer: Free
- Crypto Conversion: 2.00%
Apart from these fees, there are also variable spreads on trades and purchases. Typically, Coinbase charges about 0.50% for sale and purchase of coins whose value is less than $10,000. This fee drops to 0.35% if you’re selling or buying coins worth between $10,000 and $50,000. The higher your turnover, the lower the fees. The maker fee drops to zero for very high amounts.
Cryptocurrencies Available on Coinbase
- EOS (EOS)
- Ethereum Classic (ETC)
- Ethereum (ETH)
- Filecoin (FIL)
- The Graph (GRT)
- Golem (GNT)
- Aave (AAVE)
- Band Protocol (BAND)
- Basic Attention Token (BAT)
- Bitcoin Cash (BCH)
- Bancor Network Token (BNT)
- Bitcoin (BTC)
- Kyber Network (KNC)
- Chainlink (LINK)
- Maker (MKR)
- Litecoin (LTC)
- Decentraland (MANA)
- Augur (REP)
- USD Coin (USDC)
- Zcash (ZEC)
- 0x (ZRX)
- Uniswap (UNI)
Trading on this exchange targets laymen. The process is extremely easy. You can access Coinbase through an iOS or Android device. Both Coinbase and Coinbase Pro, its more advanced counterpart, are browser based. You don’t need to download any trading software.
As soon as you log in, you’ll see how much you have in your portfolio and how your coins have performed over a certain time interval, such as one day, one week, or one year. To buy crypto, just press the button on the banner above your portfolio balance and enter a value in fiat. Then, you place a market order for the coin of your choice, as long as the exchange has it. You can set up recurring orders, convert crypto, sell crypto back to the exchange, and more. This button will bring up all of these options. Orders can recur daily, weekly, bimonthly, or monthly.
Send and receive crypto easily
The send and receive options are found on the top right of the page. They let users receive crypto in their wallets or send crypto out of their wallets. Not all exchanges and brokers offer users the ability to withdraw to their own private wallets, which is essential to people who want to make sure their funds are secure and safe in a cold wallet (offline).
Coinbase Pro is a better option to invest or trade with more features and lower fees. However, the standard version helps novices gain confidence in buying, storing, and moving these seemingly complex digital assets.
The exchange provides account holders with a number of reliable safety measures. They will point out that an account is only as safe as a holder makes it, which is true for any exchange. You’re advised to use two-step verification and all of the other security features available. Coinbase even has insurance and biometric fingerprint logins.
Insurance is necessary in case the exchange itself suffers a breach. If your account suffers one because you failed to take security measures, the insurance won’t cover your losses. It pays off to inquire into the details. The insurance also includes storage of 98% of client funds in cold wallets.
On the downside, neither the FDIC nor the SIPC back cryptocurrency assets because these are not considered legal tender in the US. The same goes for regulators in other countries with the exception of those, who accept them as legal tender, of which there aren’t many. Just El Salvador comes to mind. The exchange insures the crypto by combining balances and keeping them in custodial accounts in USD, liquid U.S. Treasuries, or USD denominated money market funds.
The bottom line
Coinbase is an excellent choice for beginners who don’t mind the high fees. Not all countries are accepted, but the details are easy to find on their site. Compared to other leading exchanges, their security is quite solid.