Cryptocurrency is a growing investment trend for people who are looking for an alternative to investing in stocks and real estate.
There are several cryptocurrency exchanges you can use to buy crypto. Coinbase is one of the largest since it’s possible to trade Bitcoin and many other popular cryptocurrencies with ease and competitive fees.
This Coinbase review covers what to expect from the platform and if it’s the best way to buy cryptocurrency.
Coinbase offers more than 40 cryptocurrency investment options including Bitcoin. It’s also possible to earn crypto rewards and creating an account is free.
Ease of use
- Many investment options
- Easy to use
- Earn crypto rewards
- High transaction fees
- Limited customer service
- Not every altcoin available
In This Article
- What is Coinbase?
- Who Should Use Coinbase?
- Coinbase vs. Coinbase Pro
- What Cryptocurrency is on Coinbase?
- Best Coinbase Features
- Is Coinbase Secure?
- Is Coinbase Easy to Use?
- Positives and Negatives
What is Coinbase?
Coinbase is one of the most popular and widely-used cryptocurrency exchanges based on assets under management. It operates in the United States and many foreign countries.
The platform offers Bitcoin and more than 40 altcoins. Users can even earn select cryptocurrency rewards by completing short online tutorials.
There is also the Coinbase Pro platform that can be a good fit for active crypto traders. This free platform delivers in-depth technical analysis charts and potentially lower trading fees.
Coinbase vs. Stock Brokerages
You might be trying to decide whether or not to buy cryptocurrency on Coinbase or through platforms like Robinhood or Webull that offer cryptocurrency brokerage accounts.
Coinbase can be the better option because you own the actual token. You can also transfer your crypto holdings to a storage wallet or make a purchase.
Robinhood, Webull and similar platforms offer derivatives of the currency and allow you to redeem your holdings for cash like a stock investment. Additionally, stock investing apps may only offer the most popular coins like Bitcoin and Ethereum.
While the investment selection is lower with stock brokerages, you may appreciate the convenience of buying stocks and crypto on the same platform.
Who Should Use Coinbase?
Coinbase is a good option for people who want to hold private keys for cryptocurrency instead of a derivative like stock brokerages offer.
As one of the largest cryptocurrency exchanges, this platform is a legit way to buy cryptocurrency and avoid scams.
One benefit of using the platform is having access to many cryptocurrencies beyond Bitcoin and Ethereum. However, if you want to buy newer altcoins that are more volatile, Coinbase may not offer them for trading yet.
You can join Coinbase in the United States if you’re at least 18 years old. Membership is open to all 50 states and the District of Columbia, unlike some crypto exchanges.
Coinbase vs. Coinbase Pro
The default platform for new users is the standard Coinbase platform. Advanced users may also open a Coinbase Pro account for the in-depth research tools or lower trading fees.
You will need to open a Coinbase account before creating a Coinbase Pro account. The process is similar to using the TD Ameritrade site to access the thinkorswim platform.
Below is a closer look at both platforms to help you choose the best option for your needs.
The Coinbase platform is easy to navigate and can be the better option for casual investors. Stick with this platform if you just want to see the latest crypto prices and make purchases without looking at the current market price.
Platform features include:
- Cryptocurrency watchlist
- Portfolio tracker
- Online tutorials
- Cryptocurrency rewards programs
While this platform is easy to use, it lacks the in-depth research tools of Coinbase Pro.
The user experience is similar to Robinhood and other barebones investing apps. Investors can see a basic price chart and news headlines but won’t have charting tools.
Coinbase Pro is free and retrieves the payment account methods from the standard platform when you make sales.
It only takes a few minutes to upgrade to this platform.
The best Coinbase Pro features include:
- Interactive price chart
- Recent order history
- Place market and limit orders
This platform is better for experienced investors that may be familiar with performing technical analysis.
The primary advantage of using this platform is seeing the recent buy and sell orders with the transaction price.
Investors can also place limit orders to buy crypto at or below a certain price and sell at or above a certain amount. The platform may partially fill limit orders if Coinbase Pro cannot obtain enough crypto at the requested price.
With two different account types available, users can expect to pay different fees. Here’s a breakdown of the fees you’ll incur with Coinbase vs. Coinbase Pro accounts.
Users can expect to pay fees when buying or selling cryptocoins. The transaction fees are higher for the basic Coinbase platform than the Coinbase Pro service.
It’s free to open an account with no minimum initial deposit. You can store your crypto at no cost in a Coinbase wallet, and there are zero account service fees.
Transferring crypto to other users is also free.
There are transaction fees to buy or sell crypto on Coinbase. The fees are as follows:
|Transaction Amount||Transaction Fee|
|Up to $10.00||$0.99|
|$10.01 to $25.00||$1.49|
|$25.01 to $50.00||$1.99|
|$50.01 to $200.00||$2.99|
|$200.01 or more||1.49% of transaction amount|
The minimum investment is $1.99 per trade. It’s possible to buy fractional shares of any cryptocurrency.
Payment Method Fees
You can avoid extra fees by funding your purchases with a linked checking account or money that’s in your Coinbase wallet.
Extra fees apply when buying using a:
- Debit card: Up to 3.99%
- Instant card withdrawal: Up to 1.5% ($0.55 minimum fee)
- Wire transfer: $10 ($25 for outgoing transfers)
- Cryptocurrency exchange: 2%
Select Visa Fast Funds and Mastercard Send debit cards can send instant transfers to fund Coinbase purchases.
If you are exchanging one crypto for another, the fee is 2% of the transaction amount. One example of this would be trading Bitcoin for Ethereum.
For wire transfers, buyers pay $10 for inbound transfers and $25 to sell crypto or make an outgoing transfer to a bank account.
Banks may charge additional fees for transactions in addition to the Coinbase fees.
Coinbase Pro Fees
Users that plan on making several cryptocurrency purchases per month can pay fewer fees by using Coinbase Pro instead of the basic platform.
The transaction fees depend on your trading volume for the last 30 days. You will either pay a taker fee or a maker fee.
Which fee you pay depends on when your order fills:
- Taker fee: Paid when crypto is available on the market for immediate executions
- Maker fee: Paid when crypto isn’t available at the requested price and filled later
Below are the potential prices traders will pay when conducting up to $100,000 in monthly transactions.
|Pricing Tier||Taker Fee||Maker Fee|
|Up to $10,000||0.50%||0.50%|
|$10,000 to $50,000||0.35%||0.35%|
|$50,000 to $100,000||0.25%||0.15%|
Instead of paying a 1.49% transaction fee on a $500 order on the standard platform, you may only pay 0.50% instead.
Additional fees apply to purchases using debit cards (up to 3.99%) and wire transfers ($10).
Other cryptocurrency exchanges may charge lower transaction fees. That said, the Coinbase fees are competitive, and the platform can be worth using due to its many investment options.
What Cryptocurrency is on Coinbase?
Currently, Coinbase has approximately 45 of the most popular cryptocurrencies available for trading. New coins are added as they increase in popularity and programmers add trading capability.
Some of the most popular coins on Coinbase include:
- Bitcoin (Ticker: BTC)
- Bitcoin Cash (BCH)
- Ethereum (ETH)
- Litecoin (LTC)
- Cardano (ADA)
- Uniswap (UNI)
- Chainlink (LINK)
As of April 6, 2021, two altcoins that are notably absent are Polkadot (DOT) and Dogecoin (DOGE). You can track the prices of altcoins currently unavailable on the platform.
The service offers “staking” for select cryptocurrencies. This practice lets investors earn interest on their staked position as Coinbase lends positions to other investors.
Investors can also park their cash in the US Dollar stablecoin (USD) and potentially earn interest. This can be a good holding place for uninvested cash if you want to avoid market volatility.
Best Coinbase Features
Here are some of the best Coinbase perks that make the platform one of the top places to buy cryptocurrency.
The Coinbase Wallet is free and available to all investors to store their private crypto keys. It’s similar to a portfolio for an online stock brokerage.
This storage feature is a “hot wallet.” You can quickly sell current positions or transfer to other users.
However, a “hot wallet” is more susceptible to account breaches. If a data thief logs into your account, they can steal your wallet holdings and transfer them to their own wallet.
The service offers free online vault storage for crypto holdings for added security. Vault withdrawal requests require a confirmation from two linked emails instead of the one you use to join Coinbase.
Users should consider opening a “cold wallet” that’s not connected to the internet for additional security. This wallet is similar to a USB storage device.
New and experienced crypto investors may appreciate the Earn feature. This service has short video tutorials followed by a one-question quiz that lets you earn free cryptocurrency for select altcoins.
These lessons can help you understand how blockchain technology works and learn more about specific cryptocurrencies. Most lessons take three minutes or less.
It’s possible to earn these cryptocurrency rewards:
- Stellar Lumens (LMN)
- The Graph (GRT)
- Compound (COMP)
And more. While you won’t earn free Bitcoin, these altcoins can increase in value. This means you might earn free money.
You will need to upload a driver’s license or official government ID to prove your identity before earning rewards. Non-verified users can take the lessons but won’t earn rewards.
Other learning resources don’t offer any rewards but can show you how to maximize your membership.
It’s also possible to earn a $10 Bitcoin bonus after buying $100 in cryptocurrency.
There are separate mobile apps available for the Coinbase and Coinbase Pro platforms. Both apps are available for Android and Apple devices with the same functionality as the web version.
Each app lets you buy or sell cryptocurrency and see current prices. The Coinbase Pro app offers charting tools and order books.
The platform offers the Coinbase Card. This is a Visa debit card that is available in all states except Hawaii.
This debit card offers these perks:
- Spend crypto instead of cash for purchases
- Earn up to 4% back in crypto rewards
There isn’t an annual fee, so you may consider this card if you want to earn cryptocurrency on purchases instead of cash rewards.
Is Coinbase Secure?
In order to prevent theft, account security is important for cryptocurrency exchanges. These security practices are similar to online brokerages, but additional steps may be necessary to protect your crypto portfolio.
Coinbase requires all accounts to have two-factor authentication (2FA). New members connect their phone numbers to their accounts.
The platform sends a one-time passcode to the cell phone number to enter on the Coinbase website or mobile app.
It’s also possible to use an authenticator app or create a private security key that can be more secure than a text message.
Many financial companies offer 2FA security protection.
Offline Cold Storage
Coinbase claims that it keeps 98% of customer cryptocurrency holdings in offline cold storage. This method stores the coins in vaults and servers worldwide to prevent them from being easily accessed.
For extra peace of mind, you may buy a standalone cold wallet that can hold your Coinbase purchases and holdings from other exchanges.
The platform offers two different types of insurance for “hot wallet” holdings and cash balances.
Digital Currency Insurance
Coinbase fully insures cryptocurrency holdings in online wallets.
This insurance covers these reasons for cryptocurrency theft:
- Company-wide data breach to online hot storage
- Cybersecurity attack
- Employee theft
The service won’t reimburse losses when individual accounts are compromised. One example is a hacker taking advantage of a weak password.
Like a traditional bank account, cash balances qualify for up to $250,000 in FDIC coverage. This coverage doesn’t apply to the USD stablecoin since it’s a cryptocurrency.
Is Coinbase Easy to Use?
Yes, the standard Coinbase platform is easy to navigate with the web platform or mobile app. New and experienced crypto traders can quickly fund an account and place a buy order.
The Coinbase Pro platform is also relatively easy to navigate once you learn how to use the additional tools. Traders can easily create buy or limit orders or create price charts.
The Coinbase customer support options are relatively limited and are similar to a basic investing app. There is an online knowledge library and chatbot.
Users can also submit an email inquiry but may need to wait several business days for a response.
Live phone support isn’t available during the pandemic because of staffing shortages. However, users can call the phone number associated with their account and wait for a callback.
The lack of support is one reason why Coinbase has a relatively poor Trustpilot score of 1.6 out of 5. It also has a Better Business Bureau rating of 1.23 out of 5 for customer ratings.
Positives and Negatives
Before using Coinbase, it’s important to know the pros and cons of the platform.
- Many cryptocurrency investment options
- No account service fees or minimum initial deposit
- Several ways to earn crypto rewards
- Easy to join and use
- Doesn’t support some of the more popular altcoins
- Coinbase fees are higher than Coinbase Pro
- No live customer support
Here are some of the most common questions you may have about using Coinbase.
Yes, Coinbase is one of the best places to buy Bitcoin since the minimum investment is $1.99. Additionally, the transaction fees are reasonable.
Coinbase is also a good option for buying Bitcoin and other crypto because investors can hold the actual cryptocurrency keys instead of a derivative like stock investing apps offer.
It’s possible to exchange Bitcoin for other coins or use it for purchases.
One downside of Coinbase is that its transaction fees can be higher than other exchanges.
Coinbase is a legit place to buy cryptocurrency as it requires a government id and uses other security factors to create an account.
The service offers over 40 cryptos that can be sent to other users, used for purchases or exchanged for another cryptocurrency.
Coinbase is also legit since it’s one of the oldest and largest cryptocurrency exchanges. Plus, it insures hot online storage holdings and cash deposits against theft for qualifying reasons.
Yes, both Android and iOS apps are available for Coinbase and Coinbase Pro. These apps offer the same functions as the web platform and are easy to use.
Yes. Similar to selling stock or real estate, all cryptocurrency sales are taxable.
Coinbase and similar platforms will send year-end tax documents to report any investment gains or losses.
Coinbase is an excellent option for new and experienced cryptocurrency traders. The platform is easy to use and has many investment options.
The transaction fees are also reasonable. Better yet, the Coinbase Pro service reduces your fees and offers improved research tools.
Since Coinbase doesn’t offer every Bitcoin alternative, you may want to review the investment options before joining to pick the best cryptocurrency exchange for your needs.
Join Coinbase today and earn free Bitcoin when you buy at least $100 in crypto.