Coinbase Broker Review
If you are on the hunt for the best cryptocurrency exchange to trade with, Coinbase is definitely a contender.
But first, do your research.
All exchanges have their pros and cons, some suiting one type of investor better than another.
This article investigates the benefits of Coinbase, what it offers, and any drawbacks you might encounter.
A common entry point for new investors, Coinbase provides an array of cryptocurrency products, including custodial accounts for institutions, a wallet and an advanced trading platform – to name but a few.
As with all financial decisions, it is imperative to do your homework before you take the plunge, especially if you are new to trading.
Pros:
80+ currencies for US customers
Security
Education
Cons:
Cost of trading
What Is Coinbase?
Founded in 2012, Coinbase is a regulated cryptocurrency exchange that supports trades from over 100 countries, including the US (except Hawaii). The trading platform supports 100+ cryptocurrencies.
Coinbase has several cryptocurrencies which users can buy or sell, and continues to add more to its offering. Some of the currencies available include:
Bitcoin Cash (BCH)
Bancor Network Token (BNT)
district0x (DNT)
EOS (EOS)
Ethereum Classic (ETC)
Ethereum (ETH)
One of the reasons Coinbase is so popular is its easy-to-use interface and format. It is aimed at beginners and thrives on providing a simple process. Also, the platform can be accessed via an Android or Apple device.
However, for some users, its lack of downloadable trading software is a disadvantage.
Cryptocurrency is not regulated by the UK Financial Conduct Authority and is not subject to protection under the UK Financial Services Compensation Scheme or within the scope of jurisdiction of the UK Financial Ombudsman Service. Investing in cryptocurrency comes with risk and cryptocurrency may gain in value, or lose some or all value. Capital gains tax may be applicable to profits from cryptocurrency sales.
Coinbase Versus Coinbase Pro
Coinbase is great for beginners and newer investors. It is a simple-to-use platform that provides training on how to trade and use the platform. However, Coinbase Pro offers a more intricate, in-depth charting and trade system that is more suited to experienced traders.
Coinbase Pro, formerly known as GDAX, offers advanced functionality and allows traders to make crypto-to-crypto trades.
A more robust platform, Coinbase Pro offers users stop-limit orders with low commission fees and rates. It also provides more extensive analytic tools.
What Are the Key Features of Coinbase?
Coinbase has many highly recommended features, but here are a few key ones:
80+ currencies for US customers to trade – This is in addition to the 59 currencies that Coinbase Pro offers (a higher amount than any other platform). All available currencies are listed on its website, a few of which are listed above.
Two trading platforms to choose from – Coinbase is available in all US states (apart from Hawaii), and users have the option to trade on two different platforms – the original Coinbase platform and Coinbase Pro.
Trading crypto costs – Coinbase’s fee structure can be a little confusing, but there are a couple of elements that whet the appetite of traders. First, Coinbase charges a spread of about 0.5% for sales and purchases of cryptocurrency. Second, Coinbase can charge a flat fee that depends on market fluctuation. This could be a disadvantage for some people, but as the platform is transparent about its fees, the trader is aware before placing a trade.
Coinbase wallet – You have the choice to both send and receive currency from your Coinbase wallet.
Security – Like all trading platforms, security can be a deal-breaker. Ensuring currency is safe and secure is a big benefit when it comes to choosing a crypto platform. Coinbase uses a range of security measures for its account holders. However, it is up to the user to ensure their password and verification codes are secure. As part of the two-step verification process you will need a strong password when creating the account in step one and verifying your identity in step two.
Education – Coinbase is also known for its vast array of educational tools, including top tips, tutorials and market advice. You’ll find crypto-based questions about each currency, so you can get clued up before trading. It will even give you the lowdown on what Bitcoin is if you are unsure.
How Does Coinbase Work?
It is simple to set up a Coinbase account:
Enter your name, email address and the (very secure) password you would like to use.
You will receive an email to verify your email address.
After you have verified your email, you will need to enter your phone number so that you can get a verification code to submit on your phone.
As part of the two-step verification process we mentioned earlier, you will also need to enter personal information for an ID check. This information is standard and includes your full name, address and date of birth.
Once you have set up your Coinbase account, if you are new, or need to brush up on some aspects of trading, head to the ‘Learn’ section on the website to learn about deciphering each currency, the basics and the process.
However, if you are clued up already, log in to your account where you will be shown your portfolio. This is the page where you will see your performance and balance over time.
Above your portfolio balance, you’ll see the option ‘Buy Crypto’. This function will allow you to enter a dollar value and place your market orders on the currencies of your choosing.
You also have the option to convert or sell your crypto and set up recurring orders – these can be placed every day, week or month – with Coinbase it will be on either the 1st or 15th of the month.
How Secure Is Coinbase?
We touched on Coinbase’s security earlier, but just how secure is the cryptocurrency platform?
As mentioned, Coinbase, like other credible platforms, has a two-step verification process. It also has biometric fingerprint logins for extra security. This helps provide extra protection in the unlikely event that there is a data breach on your Coinbase account.
The platform also holds 98% of user funds in cold storage offline.
As digital currency is not considered legal tender, it is not backed up by the FDIC or SIPC, whose thresholds state that money is not at risk of loss in a bank in the event of a bank misstep. This can be seen as a disadvantage for some traders.
However, Coinbase does offer a good level of security compared to some other platforms. This is one more reason why it is classed as one of the leading cryptocurrency platforms in the world.
What Are the Coinbase Fees?
For some traders, Coinbase’s fees might be considered quite expensive (although Coinbase Pro is known for its low fees). The cost of trading on the original platform can be quite high compared to other platforms.
However, because of its simple navigation and easy-to-use interface, most newbies look past the fees.
Coinbase charges a spread of about 0.5% for cryptocurrency purchases and sales below $10,000. Rates might be higher or lower depending on the market.
As well as these fees, Coinbase also charges variable spreads on both trades and purchases.
Here is the fee structure for the US:
$10 or less – $0.99
$10.01 to $25 – $1.49
$25.01 to $50 – $1.99
$50.01 to $200 – $2.99
Coinbase Pro’s fee model is lower than the standard platform, and some traders claim it is easier to understand.
The model is based upon your monthly trading capacity and the asset liquidity at the time of purchase. For instance, if the asset is instantly available, you will be charged a taker fee, and if you are waiting for a buyer, you will be charged a maker fee.
Please note that, with Coinbase Pro, withdrawals and deposits will need to be made via a bank account – no card purchases are allowed. Wire transfer fees will also apply.
Cryptocurrency is not regulated by the UK Financial Conduct Authority and is not subject to protection under the UK Financial Services Compensation Scheme or within the scope of jurisdiction of the UK Financial Ombudsman Service.
Investing in cryptocurrency comes with risk and cryptocurrency may gain in value, or lose some or all value. Capital gains tax may be applicable to profits from cryptocurrency sales.
Final Thoughts
Coinbase and Coinbase Pro are two of the leading cryptocurrency platforms in the US. This is mainly due to their security and easy-to-use interface. However, the fees can be higher than usual on the standard version, as opposed to Coinbase Pro.
It is easy to register an account, and you can sign up and begin trading within a matter of minutes. Its learning program is also really beneficial.
However, the high fees and the lack of control over your own wallet key may be considered drawbacks, although the latter is the norm with most exchanges, Coinbase has a growing selection of altcoins.