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Whenever someone asks how to start investing in cryptocurrency, Coinbase is usually mentioned as a good starting point.
Founded in 2012 just three years after the creation of Bitcoin, Coinbase has since become the largest cryptocurrency exchange in the United States by trading volume, with over 73 million verified users in over 100 countries.
Although the company offers a number of valuable products for retail and institutional investors, businesses and developers, its main feature is the ability to buy, sell and trade over 100 different cryptocurrencies and crypto tokens. . Its quarterly trading volume is currently $327 billion with $255 billion in assets on the platform following its IPO via a direct listing on the Nasdaq exchange in April 2021.
Although Coinbase’s transaction and trading fees are higher than some of its competitors, it is still one of the most popular applications for investing in cryptocurrencies.
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On the Coinbase secure site
Minimum deposit and balance
0.5% – 4.5% per transaction. Fees vary by transaction type and other fees may apply.
New Coinbase users can earn $5 in bitcoins after signing up.
You can trade over 100 cryptocurrencies on Coinbase. You can also earn interest on a number of cryptocurrencies.
Coinbase Earn allows you to earn crypto rewards when you learn about different cryptocurrencies.
For retail investors, Coinbase offers the following products:
- Coinbase — A simple mobile app and website to buy, sell and trade cryptocurrencies and crypto-tokens.
- Coinbase Pro – An application for buying, selling and trading cryptocurrencies and crypto tokens with a user interface better suited to professional traders, providing charting tools, real-time order books and market data feed, among other features that more sophisticated traders would need for Trading. Trading fees are also lower on Coinbase Pro.
- Coinbase Wallet – A standalone crypto wallet app that allows users to self-custody (in other words, users themselves can control their crypto, keys, and data). Coinbase users can hold over 4,000 cryptocurrencies, crypto tokens, and NFTs in their wallet, and can access a variety of decentralized applications, or dapps, through this feature. Note that it is very important that users securely store the 12-word recovery or seed phrase that allows them to restore their wallet if they forget their password, as Coinbase will not have access to this information. .
- USDC – A cryptocurrency stablecoin pegged 1 to 1 with the US dollar; USDC users can receive 0.15% APY on their holdings.
- Coinbase Card – A Visa debit card that allows users to spend their cryptocurrency at any merchant that accepts Visa and earn up to 4% back in crypto rewards on every purchase.
At only $2, Coinbase has one of the lowest minimum balance requirements of any crypto exchange, making it an attractive choice for new investors. The Coinbase Earn feature – which allows users to watch short educational videos, take short quizzes about them, and earn free crypto assets – is also attractive since users can earn Stellar Lumens, Flexa Network’s Amp tokens and The Graph’s GRT tokens, to name a few. .
Retail investors can pay higher fees to access the simple and elegant interface of the Coinbase app. By migrating to Coinbase Pro, users can save money on fees, especially if they hold higher account balances, but may be intimidated by the elaborate interface if they are unfamiliar with coinbase platforms. trading. While Coinbase Pro offers over 250 cryptocurrencies and crypto tokens to choose from, as well as more advanced features like stop and limit orders, the platform really doesn’t have all the tools that more sophisticated investors might want. wish to access, such as futures contracts.
Both Coinbase and Coinbase Pro include FDIC insurance protection up to $250,000. It should be noted, however, that insurance is only available if Coinbase encounters a hack or cybersecurity breach of its storage services – do not if a user suffers loss or theft due to a breach in their personal account. Also be aware that insurance is only reimbursed to users in the form of fiat currency, not cryptocurrency.
Transaction and trading costs on Coinbase range from 0.5% to 4.5% depending on the cryptocurrency, transaction size, and payment method.
Coinbase charges a flat fee, which varies depending on the size of your transaction – the fee is $0.99 for those $10 or less, while it’s $1.49 for those between $10 and $25 , $1.99 for those between $25 and $50 and $2.99 for those between $50 and $200. Note that transactions over $200 are charged as a percentage instead of a flat rate.
Coinbase also charges a spread-based fee of 0.50%, while other fees are more dependent on the payment method you’re using – ACH transfers are free, while using a bank account or bank account is free. USD wallet adds a 1.49% fee, using a credit or debit card adds a 3.99% fee, and bank transfers incur an additional $10 inbound and $25 outbound fee.
When using Coinbase Pro, trading fees can range from 0% to 0.5% per trade. Users can expect to pay taker fees between 0.04% and 0.50% and maker fees between 0% and 0.50%.
For businesses looking for crypto products and services, Coinbase offers Coinbase Commerce, a payment service that allows merchants to accept cryptocurrency in their stores, with features such as payment buttons, hosted payment pages, and invoices.
Coinbase’s 10,000 institutional customers can take advantage of Coinbase Custody, which holds bitcoin and other cryptocurrencies on behalf of their customers in secure cold storage accounts that are not connected to the internet. The custody service is then subject to regular financial and security audits, which are carried out by external firms. Institutional clients can also use Coinbase Prime, a trading platform specifically designed to meet the unique needs of institutions.
Potential Disadvantages of Using Coinbase
While Coinbase offers an easy-to-use platform to start your crypto investing journey, there is one area the company seems to really struggle with.
Coinbase doesn’t have the best reputation for customer service and actually got an F from the Better Business Bureau because of it. Customers have constantly complained that they were locked out of their accounts even after providing the information required to restore them, while other users criticized the company for being nearly impossible to reach whenever assistance was needed.
While customer service is lacking and the company’s fees are higher and more complex than those of its competitors, Coinbase remains one of the most popular apps for those just starting their crypto investing journey.
It’s a regulated company with high security practices, a simple and convenient interface, and a decent amount of choice for those who use it. By offering a range of tools for more sophisticated investors, companies and institutions, Coinbase allows its users to progress as they learn more about the technology involved and the crypto industry as a whole.
Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.