- Coinbase is a cryptocurrency exchange intended to make cryptocurrency trading simple on a global scale.
- You can easily fund your Coinbase account with a multitude of FIAT-supported methods, after which you will get access to many cryptocurrency tokens.
- Coinbase is known for its simple user interface and Coinbase Pro service that constantly lists new tokens.
Coinbase makes it easy to invest in a growing number of crypto assets. For the more experienced trader, they offer an advanced version of their trading platform (Coinbase Pro).
Having been founded in 2012, Coinbase is a trusted brand, regulated in a number of jurisdictions, and listed on the Nasdaq stock exchange.
Are you considering Coinbase as a way through which you can trade cryptocurrencies? Take a deep dive into what it has to offer you and how it compares with other crypto exchanges.
Inside this review
What is Coinbase?
Coinbase was founded in 2012, just a few years after Bitcoin was first released. It showcased to the world what cryptocurrencies are all about.
It is a cryptocurrency exchange where active traders can purchase, sell, or
HODL hold a wide variety of cryptocurrency tokens, from Bitcoin and Ethereum to some lesser-known coins.
Coinbase currently has around 73 million users and a lot of liquidity. Coinbase Pro, a more advanced version of their exchange, offers users real-time order books, more customizable charting tools, detailed trading history, and a much larger variety of altcoins.
Is it safe?
Coinbase, Inc. (NASDAQ: COIN) is regulated and licensed as a money transmitter by the New York State Department of Financial Services. They are advocating for a new US-based regulator dedicated to cryptocurrency. Additionally, Coinbase has crime insurance that protects a portion of digital assets held across their storage systems against losses from theft.
Being listed on the Nasdaq stock exchange, the company must also fulfill various reporting obligations to the SEC and the market, providing a degree of transparency.
Who is Coinbase aimed at?
Coinbase serves not just individual traders but also investors, businesses, and institutions with Coinbase Pro and Coinbase Prime. This means that its main focus or aim is just about anyone interested in cryptocurrencies on a global scale. However, most people who sign up will use the standard service, which could be regarded as the iPhone of crypto exchanges, i.e. easy to use, but not the cheapest option on the market.
The default version of Coinbase, the non-pro version, supports around 100 cryptocurrency tokens. Coinbase Pro has more than double that amount.
From Bitcoin and Ethereum to Solana, AMP, Decentraland, Cardano, Polkadot, Dogecoin, and others, Coinbase offers one of the widest variety of tokens out there in terms of availability, especially if a user decides to use the Pro version of the service.
Funding your account
If you want to fund your Coinbase account with fiat, i.e. Canadian dollars, the process is straightforward. Canadian customers can make purchases with a debit card.
- To fund your account, you will need to log in and go to the payment methods page. Select ‘Add Payment Method’ near the top of the page, and select ‘Debit Card’ in the payment method section.
- Enter your card information, taking care to enter your address accurately.
- Coinbase will then make two temporary authorisations to the card, which you will need to verify.
- Refer to your online banking statement to find the test amount Coinbase sent, as well as the 4-digit verification code in the description.
- Next, enter the code on Coinbase.
- You should now see a message saying ‘Debit Card Added’ and a ‘Buy’ button.
You can now buy cryptocurrency with Coinbase.
Coinbase has specific features that differentiate it from other cryptocurrency exchanges.
Coinbase Earn allows customers to learn about different cryptocurrencies through engaging in educational content. Users who are eligible can unlock lessons on top of the content, earning cryptocurrencies by doing so.
In other words, you can just watch a few videos about cryptocurrencies, after which you will be given a quiz to complete in order to test your knowledge. You will then be rewarded with the specific cryptocurrency token you were learning about.
Given the low interest environment we currently have, staking is an appealing proposition whereby you earn rewards for staking your assets for a period of time. This is similar to a term deposit, but yields are typically higher. However, crypto is volatile and the dollar value of any staked asset — which is inaccessible while staked — may decline so that it's worth considerably less when the term ends than when you first staked it.
Coinbase's fee structure can be a bit complicated to grasp. There is an exchange rate spread of about 0.5% for cryptocurrency sales and purchases. Coinbase also charges a transaction fee, which can be a flat fee or a variable fee depending on the payment type and what is being purchased.
These fees may change over time, and they are different in different regions of the world. Coinbase also charges a fee for debit card deposits and withdrawals.
Pros and cons
- A wide variety of altcoin choices, specifically in its Coinbase Pro offering that consistently adds new tokens.
- Simple user interface, which makes it extremely easy for new traders to acquaint themselves with investing in crypto.
- High liquidity. As it is one of the largest cryptocurrency exchanges in the world, high liquidity allows for a higher level of investor protection from price slippage (the difference between the price at order placement and the price at execution).
- High fees, especially if you are just starting out and tend to deposit fiat money into your account rather than crypto.
- No control over private keys, specifically when you keep your coins within the Coinbase account.
- Customer service has a somewhat questionable record, although they are available via email and Twitter.
Many exchanges have positioned themselves as an alternative to Coinbase. In Canada, there are some exceptional local exchanges with which you could replace Coinbase. These are some of the leading options.
- Newton. Extremely high end design. Fewer coins than what's on Coinbase. Charges a spread instead of fees. Excellent mobile app.
- CoinSmart. Based in Toronto, CoinSmart is primarily aimed at those looking for a simple way to trade. Fewer coins available than Coinbase.
- Bitbuy. This Toronto-based exchange was the first registered marketplace and crypto brokerage in Canada. Lists fewer coins than Coinbase but has competitive fees and more non-crypto account funding options.
- NDAX. A very popular Canadian exchange. Lists fewer coins than Coinbase, but adds more regularly. Offers instant buy with more Canadian-friendly ways to fund your account.
- Kraken. US-based exchange. Founded in 2011. Offers a solid number of cryptocurrency tokens in a clean UI.
- Gemini. Founded by the Winklevoss twins of Facebook notoriety, this US exchange has a solid reputation for being trustworthy. Like Coinbase, Gemini is well-designed and easy to use.
See how Coinbase stacks up against competing exchanges in these side-by-side product comparisons.
- Coinbase vs Bitbuy
- Coinbase vs Coinberry
- Coinbase vs CoinSmart
- Coinbase vs Coinsquare
- Coinbase vs Gemini
- Coinbase vs Kraken
- Coinbase vs NDAX
- Coinbase vs Netcoins
- Coinbase vs Newton
- Coinbase vs Shakepay
- Coinbase vs VirgoCX
- Coinbase vs Wealthsimple Crypto
What KYC does Coinbase require?
Coinbase complies with Know Your Customer (KYC) regulations. You'll be required to provide your name, date of birth, address, and photographic ID in order to get verified.
Is there a demo account?
Coinbase does not currently offer a demo account.
Is Coinbase insured?
The SIPC (Securities Investor Protection Corporation) does not insure Coinbase. However, it does have insurance that protects some of your digital assets from theft or potential cybersecurity breaches. While this is not direct insurance on assets, you can at least have peace of mind against cybersecurity breaches or theft.
Do I need my own crypto wallet for Coinbase?
You can choose to have a hosted wallet on Coinbase or a non-custodial wallet. The Coinbase app will let you buy and sell crypto through a hosted account, and there's even a standalone Coinbase Wallet app, which will give you the same benefits as a non-custodial wallet.
How do I withdraw crypto from Coinbase?
- In order to make a withdrawal of funds on Coinbase, you will first need to sign in to your Coinbase account and find the asset that you would like to withdraw.
- Then, click on ‘Withdraw’ from the Actions column on the right side and click on ‘Withdraw to External Address’. Here, you need to choose the wallet that you would like to withdraw to and enter the amount of crypto you would like to withdraw.
- Click on ‘Preview Withdraw’, and if the summary is correct, click on ‘Initiate’.
- You will then need to confirm the transaction, and once it is authorized, your withdrawal will be initiated but still require approval. Once approved, your transfer will be processed.
Coinbase offers an easy-to-use interface that makes it easy to buy crypto for new investors, but their fee schedule is high. Coinbase Pro, a more advanced offering, gives active traders access to hundreds of cryptocurrencies, including a lot of smaller altcoins with competitive fees.