Coinbase is the one of the largest and most established regulated exchanges in the US with a history dating back to 2012. Today, Coinbase offers exchange, brokerage, and custody services to over 43M+ verified customers in over 100 countries.
As of March 2021, Coinbase is the largest cryptocurrency exchange in the US by trading volume with over $327B in trade volume per quarter.
History of Coinbase
Located in the US, today Coinbase is a public company traded on NASDAQ as COIN. Coinbase was founded by CEO Brian Armstrong and Co-Founder Fred Ehrsam in June 2012.
At the time of going public in April 2021, Coinbase had over 43 million verified users, 7000 institutions, and 115,000 ecosystem partners in over 100 countries.
CEO Brian Armstrong has raised over $500M from leading investors and venture capital firms such as a16z and Union Square Ventures; the company was most recently valued at $8B USD before its direct listing on the public capital markets.
Brian Armstrong previously worked as a software engineer at Airbnb, a consultant at Deloitte, and co-founded an education company. Today, Armstrong is known for being a billionaire investor and executive heading one of the world’s most prominent exchanges and collaborating with US lawmakers in regards to crypto asset regulations.
Note that all users of Coinbase are required to comply with Know Your Customer regulations (KYC) and Anti-Money Laundering (AML) laws. This means all Coinbase accounts - individual or corporate - must verify their identity in order to use any feature of the Coinbase exchange, but this is not required for the self-custody Coinbase Wallet app.
Currently, Coinbase has an average of $5B in 24H trading volume as of Q4 2021 and allows trading in USD, GBP, and EUR fiat pairs alongside 376 total market offerings.
Coinbase is best for:
- Investors and traders of various skill levels who desire a comprehensive and established platform for buying and selling with on-ramps and off-ramps to banking, as well as industry-leading storage and custody solutions
- Beginners to cryptocurrency who want to use a dollar-cost averaging approach to buying crypto with ease of use and a mobile app
- Users who want to earn cryptocurrency via learning
- Crypto-only traders and investors (no stocks offered)
Pros & Unique Features
The biggest perk of Coinbase is its cryptocurrency product offerings and pairs, which are among the widest selections of all US- regulated exchanges available to use for US persons.
Coinbase offers an easy to use user interface and well-rated mobile app that offers full buy and sell functionality with the option to add recurring buys allowing customers to buy more of their favorite cryptos over time automatically.
There are low minimums to transact and buy cryptocurrency and as a result, Coinbase is the most well-known US exchange with new coin listings on its platform achieving the well-known “Coinbase effect” due to the surge in volume and price that immediately follows.
Among all of its product offerings, Coinbase offers the best-in-class complete package to use for beginners to cryptocurrency to get started from being complete beginners to having their own self-custody wallet set up, to having on and off-ramps to banking institutions for ease of transferring fiat funds, to quickly being able to not only learn about the cryptocurrency they are buying, but also having a secure form to store it.
Coinbase’s current product offerings for retail traders and investors include: the Coinbase mobile app which investors can use to buy, store, and trade cryptocurrencies on the platform, Coinbase Pro which is a professional trading platform with an advanced UI geared towards active trader and a different fee schedule, and Coinbase Wallet, which is an app that allows customers to access decentralized crypto apps, known as dapps, and self custody their crypto assets.
Coinbase also offers a debit Visa card for customers to spend cryptocurrency as well as a platform called Coinbase Earn which is a cryptocurrency learning platform that rewards users with small amounts of altcoins for watching videos and taking quizzes to learn about them.
Cons & Disadvantages
The main disadvantage of Coinbase is its high transaction fees especially as compared to other regulated US competitors such as FTX US and its lack of any margin trading access or other derivatives trading products.
Transaction fees are much higher and more confusing to understand on the primary Coinbase platform vs. being cheaper and having a more clearly defined fee schedule on the Coinbase Pro platform. Due to the fee structure, the fees can be excessive for smaller purchases.
One other disadvantage that is often reported for Coinbase is in regards to the frequent customer service issues reported on social media by its users.
Coinbase has a more complex fee structure than many other US exchanges. There are trading fees charged whenever the customer buys or sells any crypto asset.
There is a transaction fee dependent on the transaction amount performed as noted in the tables below, and there is also a markup on the spread. The spread involves the bid - the price at which the asset is bought by the customer, and the ask - the price at which the asset is sold by the customer; Coinbase charges a higher ask price and a lower bid price than market price. This spread can differ in the range of 0.5% over the quoted exchange price.
Coinbase charges a fee equal to the higher of its flat transaction fee or a variable fee that depends on a few factors.
This fee structure makes transacting on Coinbase more expensive than on competing US exchanges, especially for smaller transactions. For a purchase or sale of less than $10, Coinbase charges a flat fee of $0.99, which is 10% of the transaction amount.
Coinbase also charges a maker-taker fee model to determine trading fees. Taker fees are charged on market orders that are filled immediately (takers of liquidity from the market), and maker fees are charged on orders that are not filled immediately but rather are placed in the orderbook as limit orders (making the market liquidity). Orders that are partially matched immediately pay a taker fee on the matched portion and a maker fee on that portion that is matched later on the order book.
Fee tiers are based on total USD trading volume over the trailing 30-day period across all order books excluding those for stablecoin-USD pairs. In the event of trading done on crypto pairs (e.g. ETH-BTC orderbook), the traded ETH amount in this example is converted to a USD equivalent based on the most recent fill price on the ETH-USD order book.
The table below shows the tiered fee structure.
Coinbase Trading Fees Based on Trading Volume (30 Day Trailing Period)
For transaction fees, Coinbase charges a total fee equal to the higher of its flat transaction fee or its variable fee which depends on a few factors.
Fees Based on Transaction Amounts
$10 or less
Alternatively, Coinbase charges variable fees based on the method of payment and the user’s location.
In the US, Coinbase charges a 1.49% fee for payment via a US bank account, a 1.49% fee for payment via Coinbase USD wallet, a 3.99% fee for a purchase via a debit card, and up to a 1.5% transaction fee and a fee of at least $0.55 for instant withdrawal to card. Whichever is the higher fee among the flat transaction fee or the variable fee is the total fee the user pays.
Additionally, for converting fiat to USD-stablecoin pairs, Coinbase charges a fee of 0.01% for takers and 0.00% for makers.
Coinbase charges the following deposit and withdrawals fees:
- ACH deposit and withdrawal are free
- Wire deposit fee of $10 and withdrawal fee of $25
There are no fees for signing up or for having an inactive Coinbase account, nor any fees for holding funds in a Coinbase account, and users may hold assets as long as desired.
Account Tiers & Limits
Accounts limits on Coinbase are determined by factors including KYC verification, purchase history, payment type, and more. For US customers, the limits on ACH transfers is a maximum of $25,000 per day.
Coinbase does not limit the amount of crypto a user can sell to one’s Coinbase fiat wallet but withdrawal limits are dependent on the payment method being used.
Crypto Custody and Safety
Coinbase has industry standard security that includes 2-factor authentication, biometric fingerprint logins are available, AES-256 encryption exists for digital wallets, and as of Dec. 2021, the Coinbase platform has suffered no major hacks; however there are some reports of small-scale breaches in multi-factor authentication and phishing attacks that have affected approx. 6000 customers.
However, Coinbase has made an effort to compensate these customers for the stolen funds. Occasional reports of Coinbase accounts being hacked on social media sites are often attributed to lapses in or failure to use proper 2-factor authentication or falling victim to phishing attempts.
Any cash balances stored in users’ Coinbase accounts as USD are covered by FDIC insurance up to a maximum of $250,000 per customer just like they would be at any bank.
In 2019, Coinbase rolled out Coinbase Custody, which stores 98% of all of the exchange’s crypto assets fully offline in cold storage wallets that are not connected to the internet. Coinbase also keeps its assets insured so the end customer cannot lose his or her money through hacking or theft.
Coinbase Review Conclusion
Coinbase is a strong choice of exchange especially for beginner and intermediate US-based market participants and traders who value an easy-to-use trusted brand of exchange with the most cryptocurrency offerings out of any US competitor, along with the ability to securely store their crypto, utilize the power of recurring buys long term to build their crypto portfolio, and for those who want to earn small amounts of cryptocurrency as incentives for learning more about various coins and protocols.
- While its fee structure cannot compete with some other US competitors or the Coinbase Pro offering, smaller participants and beginners who value the large selection of cryptocurrencies listed and ease-of-use and onboarding will enjoy everything Coinbase has to offer
- Customers who desire advanced features such as margin trading and reduced maker-taker fees may prefer to use competitors such as FTX US and Kraken, since both Coinbase and Coinbase Pro shut down margin trading as of Nov 2020 due to regulatory reasons
- Clients can access the entire Coinbase suite of products including staking functionality, Coinbase Wallet, Coinbase Exchange, and Coinbase Earn
For customers who value having access to a more competitive fee structure especially in the US, FTX US, KuCoin, and Kraken all make excellent alternatives but may require sacrifice in cryptocurrency selections depending on the exchange.
Active traders will prefer the more advanced user interface of Coinbase Pro or FTX US. Coinbase Pro offers access to much of the same functionality and reputation as Coinbase but with more advanced features and a slightly reduced fee structure. Coinbase is best designed for buy-and-hold investors or casual to intermediate cryptocurrency users, while active traders who need access to view depth of market such as order books and charting functionality will prefer using Coinbase Pro, FTX US, KuCoin, or Kraken.
For customers who desire to trade and invest in stocks in addition to top cryptocurrencies and do not care about having a smaller selection from which to choose or only desire access to the top 20 cryptos on the market, Webull is a broker that offers US equities and cryptos. Other US competitors to Coinbase include Binance US and Gemini.
Coinbase vs Coinbase Pro
The main advantage Coinbase Pro offers over Coinbase is the presence of advanced charting and crypto-to-crypto trading pairs offered on Coinbase Pro, in addition to a slightly more competitive fee schedule. Coinbase Pro also supports more advanced order types such as stop-limit orders.
Coinbase Pro has no fees based on method of payment and instead only charges fees based on trading volume. The deposit and withdrawal fees are the same as for Coinbase.
Both exchanges are owned by Coinbase Global Inc. and offer the same industry leading custody and security along with the brand reputation of Coinbase. Ultimately, advanced users who desire even more competitive fees than what Coinbase Pro offers will find the choices below more valuable.
Coinbase vs FTX
The trading fees for Coinbase Pro, while slightly lower than for Coinbase itself, are still not competitive with FTX US, as fees at Coinbase start at 0.5% for both makers and takers while FTX US fees start at 0.1% and 0.4% for makers and takers, respectively. For larger market participants trading over $300M USD of volume, the maker fees then drop to 0.00%, while with FTX US they drop to 0.00% with only over $50M of 30-day trade volume which is a significant difference in trading volume needed for zero maker fees.
However, Coinbase will offer US traders and investors significantly more cryptocurrency trading pairs and coins to choose from than FTX US does. FTX US offers margin trading at a maximum of 10X leverage while Coinbase no longer offers any margin trading or leverage options.
Overall, advanced and experienced traders moving large volumes will prefer FTX but smaller traders who prefer a larger amount of coins to choose from may prefer Coinbase.
Coinbase vs Gemini
Coinbase users will not find many advantages offered by Gemini, as Gemini charges a fixed 1.49% fee per trade over $200, and a slightly reduced 3.49% fee for debit or credit card purchases. Gemini also supports significantly less cryptocurrencies than Coinbase.
However, the minimum fee tier at Gemini starts at 0.35% for takers (instead of 0.50%) and 0.1% for makers (instead of 0.50%), with an 0.2% auction fee, and Gemini uses a similar 30day trading volume schedule for these fees similar to Coinbase.
Coinbase is a better option for a beginner friendly exchange with an intuitive UI and for any user who values a public company with a large US brand presence. Gemini, like Coinbase, also offers a staking program called Gemini Earn.
Both exchanges offer similar security, and Coinbase offers a lot more choices between cryptocurrencies and trading pairs.
Coinbase vs Kraken
Kraken is another US exchange that also offers margin trading to high net worth investors at up to 5X leverage in the US which is an additional offering over Coinbase.
Kraken also uses a maker-taker fee schedule similar to that of Coinbase but the fees are significantly lower and start at 0.16% maker fees and 0.26% taker fees at the entry level. High volume and advanced traders may prefer this more advantageous fee structure over that of Coinbase.
Kraken also offers a large variety of cryptocurrencies and pairs (over 93), however Coinbase offers more. One difference is the maximum deposit and withdrawal limit on Kraken for intermediate level account members is $100K per day instead of Coinbase’s $25K per day.
Coinbase vs KuCoin
KuCoin is another US-friendly exchange with a great UI and brand presence, lots of coins offered including coins that are hard to find on many other exchanges, and is friendly for both beginner users and active, advanced traders alike.
KuCoin’s spot trading offers are very extensive, with over 450 cryptocurrencies listed and over 900 trading pairs. KuCoin also offers margin trading in the USA for qualified individuals while Coinbase does not.
One major advantage KuCoin has over Coinbase is in its fee structure, with KuCoin even offering rebates to market makers for the highest levels of volume. Fees at Kucoin start at 0.1% for makers and 0.1% for takers at the lowest volume tier, which is significantly lower than Coinbase’s fees which start at 0.5% for both takers and makers at the lowest volume tier.
User Reviews Of Coinbase
- https://www.reddit.com/r/CoinBase/comments/kv2kii/coinbase_review_biggest_pros_and_cons/ - Many users’ main frustration with Coinbase is with its customer support not responding to their concerns in a timely manner
- https://www.reddit.com/r/CoinBase/comments/n0m7mw/brutally_honest_coinbase_review/ - Some Coinbase users report being kicked off and banned from the platform for unclear reasons
- https://www.reddit.com/r/Bitcoin/comments/h9dcy1/what_are_the_pros_and_cons_of_coinbase_what_are/ - Some social media users have reported preferring other exchanges including Cash App and KuCoin
- https://www.reddit.com/r/CoinBase/comments/qmp7ud/is_anyone_having_a_positive_experience_on/ - Reddit has a dedicated Coinbase subreddit where users of the exchange often share their experiences