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CryptocurrencyCoinbase Exchanges Review - Why Coinbase Is America’s Number...

Coinbase Exchanges Review – Why Coinbase Is America’s Number One Cryptocurrency Exchange

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America’s favorite exchange has earned its place as a global force in cryptocurrency. With extensive spot market trading of stablecoins and market-leading cryptocurrencies, investors will struggle to find a platform that offers investing as easy with relatively well-mitigated risk. We’ll be taking you through a detailed review of the Coinbase and Coinbase Pro cryptocurrency exchange, evaluating all of its potential for traders and enterprises alike by breaking down all the features, functionality, business services, and basic usability.

What Is Coinbase?

Coinbase is a cryptocurrency exchange that supports spot trading and currency conversion across 234 cryptocurrencies. As a platform designed to simplify trading as far as possible, the exchange is split into two core platforms – Coinbase and Coinbase Pro, having different fees applicable to each with a range of institutional services available as well. Coinbase currently ranks as the world’s second-busiest exchange by cryptocurrency spot market trade volume handling $2.6 billion every 24-hours and is the top-ranking exchange in the United States.

Coinbase Global, Inc. was founded in 2012  by Brian Armstrong, who previously served as a developer for IBM and was also one of the software engineers who worked on the Airbnb team, and Fred Ehrsam, who formerly worked as a foreign exchange trader at Goldman Sachs.  It is one of the few exchanges which is publically listed on the Nasdaq. Up until  May 2020, Coinbase had operated out of company headquarters located in Wilmington, Delaware, but the coronavirus pandemic caused the company to switch to remote-first operations instead with no physical headquarters.

While new altcoin listings aren’t as frequent as other exchanges, Coinbase is famous for listing only the most promising cryptocurrencies. Coins and tokens launched on Coinbase typically experience such a profound initial price rise during the first few hours to days that the listing trend has been commonly referred to as “The Coinbase Effect” by popular industry analysts like The Wall Street Journal’s sister publication focusing on finances, Barron’s.

Why Trade On Coinbase?

Coinbase is a cryptocurrency exchange that’s supremely simple for beginners to start buying and selling cryptocurrency. From the low minimum purchase value of $5 to the streamlined interface and crystal clear instructions provided throughout the platform, Coinbase is an easy-to-use exchange that should be a keen consideration for anyone looking for the simplest way to trade.

Pros

  • Industry-Leading Trade Simplicity
  • Spot Market Specialization
  • Fully Regulated Exchange
  • Competitive Fees On Coinbase Pro
  • US Traders Allowed

Cons

  • No Margin Trading Or Cryptocurrency Derivatives
  • High Fees On Base Platform
  • Sluggish Customer Support
  • KYC Required To Trade

How To Trade On Coinbase – Registration & Privacy

Signing up for Coinbase takes minutes. After entering your full name, email address, and a secure password, the registration process moves onto email verification. After verification via email, Coinbase will request a phone number for 2-step verification. Finally, identity verification is asked, and in the USA, you’ll need to add a social security number and proof of the State that you live in.

Coinbase Overview

Primary FeaturesQuick Buy/Sell/Convert, Spot Trading
Trading TypesCoinbase Basic Quick Trading/Converting, Coinbase Pro Spot Market Exchange
Derivatives TradingNo Derivatives Offered
FinancesNo Margined Finance / Crypto Asset Startup Finance, Funding Via ACH, Wire Transfer, SEPA, Swift & Credit/Debit Card
Coinbase Trading FeesBase 4% Fee For Purchase, Sale & Deposit (Portion Of Fee Waived Based On Payment Method), Coinbase USD Wallet & US Bank Account Withdrawal 1.49%, Credit Card Withdrawals 3.99%, Instant Card Cashout Up To 1.5% Of Transaction ($0.55 Minimum)
Coinbase Pro Trading FeesTransactions Over $1 But Lower Than $10,000 Charge Taker-Maker Fee 0.5%-0.5% With Tiered Discounts Reaching As Low as Taker 0.1% Maker 0.2% For Average High-Volume ($100M – 500M)
Currencies Supported252 Markets, 244 Cryptocurrencies
Security FeaturesWorld-Leading Blockchain Analytics & Flow Tracking, 97% Of Funds In Multisignature Cold Storage, 2FA, AES-256 Key Storage, Encrypted SSL Communication, Advanced Proprietary Password & Blockchain Security
Ease Of UseIndustry Leading Ease Of Use, Coinbase Learn Offering Full Documentation
Accepted Countries100+ Countries Supported – Global Coverage
Coinbase Affiliate Program50% Of New Referrer’s Fees For Three Months Of Trading
Customer SupportLive Chat & Email But Reported As Slightly Slow From Time To Time By Industry Averages

Coinbase Trading Features

From the moment one logs into Coinbase, the interface immediately presents a clean, fresh alternative to the basic spot trading exchange or Trading View of most competitors. Some will prefer the adjustment, while more advanced traders and anyone looking for a chart will quickly switch to Coinbase Pro – it’s a vastly different trading experience. The most crucial difference between Coinbase and Coinbase Pro is how much more fees and more complicated the fees of the basic platform are. Anyone who’s advanced past being a complete beginner to cryptocurrency will want to use the robust professional exchange instead. Here’s a breakdown of both platforms, Coinbase and Coinbase Pro, and the trading functionality offered.

Coinbase (Basic)

Using the basic Coinbase platform is a trade-off of affordability for extreme ease of use. New investors won’t find a simpler way to purchase, sell and convert cryptocurrency, but the convenience comes with higher charges than most competing exchanges – fees which are much lower when using the more advanced market trading of Coinbase Pro. Upon logging in, the minimalist trading interface presents the current price of assets on your watchlist, portfolio management, buy, sell, convert, a trading feature, Coinbase For You, and a notifications alert.

Coinbase Portfolio

A simple but effective portfolio management interface allows newcomers to investing to buy cryptocurrency and track their trades. Depositing funds is made easy, while a cryptocurrency asset tracker points traders toward new investments. Not much more than convenience and basic tracking are offered, but it’s typically enough for those who want to procure holdings in a couple of select currencies.

Buy

Selecting buy or sell immediately opens the Buy/Sell/Convert feature from Coinbase. As mentioned, Coinbase makes this step extremely easy. With the wealth of available funding methods and the selection of stablecoins on offer, we couldn’t imagine buying cryptocurrency any more straightforward. The only pitfall is the high fees by an industry-wide comparison of charges. Purchasing cryptocurrency is charged at 4% of the transaction value, where most markets average 2.5% or lower. 

Sell

Selling utilizes the same Buy/Sell/Convert feature to let cryptocurrency holders instantly sell their stablecoins. Once again, the fees arrive as higher than most competing exchanges, but sale is instant. Expect to pay 4% of the transaction value as fees.

Convert

From the familiar simplified trading interface, converting between supported cryptocurrencies is charged at a flat rate of 0.50% per conversion. The conversion is instant, but depositing via a bank transfer normally takes 3 to 5 days to clear and reflect as available in a Coinbase account, so keep this in mind when trading.

Trading Interface

Switch to Coinbase Trade, and traders are provided with a sortable list of all tradable assets. Cryptocurrencies across the last hour, 24-hours, week, month, and year are available, with watchlisting and sorting according to top gainers and top losers. Viewing the historical data for individual cryptocurrencies is straightforward but supplies limited information. This trading interface from Coinbase may get most traders started, and it’s useful for keeping an eye on investments, but most will resort to more advanced analytics and charting available on Coinbase Pro.

Coinbase For You

Coinbase For You is the portal that connects you to all the useful guides and tutorials about cryptocurrency investing available. You’ll also find daily industry updates, news concerning product launches, and information about airdrops and other ways to earn free coins and tokens here. It’s a fantastic resource for anyone new to cryptocurrency investing.

Coinbase Wallet

The Coinbase Wallet is a digital wallet, otherwise known as a hot wallet, protected by industry-leading security mechanisms. No Coinbase Wallet has ever been breached. Users are free to store cryptocurrencies free of charge. The Coinbase wallet supports any currency listed on Coinbase. Buying and selling directly from the wallet is charged at 0.50% with an additional Coinbase Fee, which is covered extensively in our Coinbase fees section.

Coinbase Pro

As traders will notice, the basic Coinbase platform functions as a brokerage and attached cryptocurrency wallet. Coinbase Pro, however, is a fully-fledged spot market cryptocurrency exchange connecting traders to each other. Coinbase Pro offers a range of stablecoin trading pairs tied to BTC, ETH, and DAI while operating with a public order book. Logging into Coinbase Pro presents an exchange with a custom Trading View proprietary to the platform. The wallet balance is shown with an order form for buying and selling, with market, limit, and stop-limit orders available.

The order book and ticker are well placed, with the pricing chart shown in clear view. Trade history is shown to the right, with links to the trader’s list of orders and portfolio listed. Both a classic color theme similar to the traditional charting interface most of us are familiar with is on offer and a dark skin which works well for making everything even clearer to read regardless of lighting conditions.

Coinbase Payment Methods

Coinbase allows you to purchase cryptocurrency using a Visa or Mastercard while requiring a connected bank account or wallet to sell. Coinbase does not accept prepaid cards and cards without an associated billing address.

Coinbase Fees

Coinbase uses a fee system that can be confusing to some. Every country works on a variation of the basic structure that we’ll be covering for the US. A Coinbase waiver lowers a basic charge of 4% on all transactions based on the payment type and the value of the transaction. Cashing out costs up to a maximum of 1.5% of the transaction with a minimum fee of $0.55 imposed.

Bank account transfers and funding of the Coinbase USD wallet are charged at 1.49%. Debit and credit card purchases charge 3.99%. ACH transfers are free, while incoming wire transfers are charged at $10 and outgoing at $25. Additionally, a maker and taker fee of 0.5% is charged on transactions under $10,000 in value. At this point, fees begin to drop relative to the pricing tier traded-in.

Coinbase Pro Fees

Coinbase Pro charges significantly less fees than the basic Coinbase Quick Trade platform. Most transactions fall within the $1 to $10,000 range which puts the starting maker-taker fees at 0.5% each. The higher the trade volume, the less fees charged reaching as low as 0.04% Taker to 0% Maker for mammoth transactions over 2 billion. A full breakdown of Coinbase Pro’s fees is tabulated on the Coinbase help center.

Currencies Supported On Coinbase

A total of 234 cryptocurrencies are available for spot trading and currency conversion on Coinbase as of midway through 2021. Coinbase discontinued margin trading due to regulatory concerns on the 25th of November 2020. Derivatives trading is not available on Coinbase at all.

Coinbase Crypto Card

The Coinbase Card is a Visa debit card with no annual or sign-up fee that launched in October of 2020. Qualifying users receive a card that earns 4% of all expenditure as cryptocurrency rewards. The card is issued by the US retail banking company MetaBank, based in South Dakota. The infrastructure for the card’s capabilities is powered by Oakland-based IT service management company, Marqeta which also works with DoorDash, Instacart, Uber, and JPMorgan Chase.

Funds on the Coinbase Card are automatically converted from cryptocurrency to the US dollar, with the conversion fees deducted on the fly. Using the card works on the same principle as selling on the Coinbase exchange. If you’re in the US or any one of the 30 countries where the Coinbase Visa Card is issued, we recommend ordering one. It makes spending crypto easier than ever, and the 4% rewards are more than generous, especially for anyone who spends a lot. You can even request cash back at a payment point.

Coinbase Security Features

Coinbase has a long history of sustaining and upgrading its cutting-edge blockchain technology. In 2019, a world-leading blockchain analytics firm Neutrino was acquired, which ramped up the exchange’s capabilities making it even more secure than ever. Coinbase’s infrastructure has such extensive analytics and cryptocurrency flow tracking that in 2019 the IRS expressed an interest in acquiring Coinbase Analytics to help enhance law enforcement capabilities.

No less than 97% of all funds are held offline in a cold storage wallet. All accounts are protected by encryption and two-factor authentication. Some of the safest security measures like web traffic running over encrypted SSL, key storage using AES-256 encryption, and password hashing to a database in bcrypt combined with a 12-cost factor are in use. There are also SQL injection filters limiting suspicious actions and preventing mass-assignment exploits. Overall, Coinbase’s extensive security measures are so good that many experts consider them to be the very best in the world.

Coinbase Ease of Use

There are few cryptocurrency exchanges and investment platforms that can compare to the intuitive design and platform-wide ease of use offered by Coinbase. It’s an exchange that’s been designed specifically for newcomers to cryptocurrency trading, and therefore carries a simplified design with full documentation available in the knowledgebase for all available features.

Coinbase Affiliate Program

The basic Coinbase Invitation Program rewards investors for inviting friends with free cryptocurrency. Both the affiliate referring the new investor and the newcomer receive $15 worth of Bitcoin free as soon as the new trader buys or sells their first $100 worth of cryptocurrency using Coinbase. There’s also a dedicated affiliate program for content creators, marketers, and industry influencers.

The Coinbase Affiliate Program running separately from the basic invitation scheme, pays 50% of the new customers’ referred fees to the referrer for the first three months of their trading. Once approved, affiliates have access to tracking and performance data. A broad range of landing pages and deep linking tools are available, and over twenty customizable performance reports. Affiliate payments are made in any local currency that you prefer.

Customer Support From Coinbase

Even though Coinbase has a flawless track record of maintaining wallet security and helping users retain safekeeping of their funds, customer support is available from Coinbase via a live chat agent or email. There’s also the Coinbase head office for non-support-related inquiries available at +1 888 908-7930 but no telephonic support for technical queries. For those who need pointers from other users, a well-utilized Coinbase forum is also on offer.

Coinbase Business

Beneath the deceivingly simple interface, Coinbase is powered by one of the world’s most advanced blockchain management and security systems, with a liquidity pool and expert security team large enough to handle the world’s biggest institutional clients. Businesses of all sizes can turn to Coinbase for a diverse range of services spanning everything from high-frequency trading to cold wallet asset management and cryptocurrency launches. Here’s a review of the full range of services available from Coinbase Business.

Coinbase Pro Exchange With API Support

Coinbase has high throughput APIs available for the Coinbase Exchange to connect high-frequency traders and market makers to one of the world’s most liquid cryptocurrency spot exchanges. High-volume trading is offered with a variable fee structure. FIX/REST APIs and WebSocket allow traders direct access to current market data and near-instant order placement. Interested parties must complete a Coinbase Institutional interest form supplying the legal entity name, country of incorporation, the primary place and type of business, the number of employees, the company website, and a short basic business description. After completing the form and stating the fund assets under management desired in USD, the Coinbase team will make contact to complete the registration.

Coinbase Prime

Coinbase Prime is an investment vehicle scheme and integrated prime brokerage platform for organizations, market makers, and high-frequency traders. As a high-performance API, the Coinbase Prime platform is the ideal option for experts who want an integrated solution that combines exchange trading, asset custody, algorithmic orders, OTC trading, and advanced market data. While still in its beta, Coinbase Prime is intended as an upgrade to Coinbase Custody, but customers are advised to hold both accounts until the final release lands.

Coinbase does a great job of providing a unified institutional-grade investment platform. The massive liquidity pool that backs all Coinbase products makes Prime extremely secure with excellent prices. The platform is adding margin finance, OTC block trading, and a central order book accessible through a web interface in the near future. Low-touch execution services of the highest quality with dedicated institutional finance teams for service and support make Coinbase Prime one of the best products in its class, instantly acquiring over 100 hedge funds in just a few weeks after its launch.

Coinbase Commerce

Coinbase Commerce allows anyone to accept crypto for payments without any fees charged on transactions. Coinbase hosts the trader’s checkout pages, all payment interfaces and offers easy integration across numerous eCommerce platforms, including WooCommerce and Shopify. Setting up Coinbase Commerce takes minutes and almost instantly enables multi-currency payment with no limits.

Complete customization of payment buttons is available, but the hosted checkout pages are slightly inflexible for those who prefer total personalization. There is, however, a feature-rich API available. All currency received is held in the trader’s own wallet. Coinbase does not hold cryptocurrency despite serving as a secure intermediary for trades. Traders are free to convert their earnings to fiat currency or a selection of stablecoins like Bitcoin and Dai.

Coinbase Crypto Asset Custody For Institutions

Coinbase Custody is an institutional-grade cold storage solution that’s been successfully protecting the Coinbase exchange since 2012. As an entity regulated by the New York Department of Financial Services (NYDFS), traders can expect the highest quality security, service, and storage available. A wide array of crypto assets can be stored with Coinbase Custody. At the time of writing, as of midway through 2021, 134 assets were supported. In the entire history of Coinbase Inc. and Coinbase Custody, no funds have ever been lost. An implementation fee of up to $10,000 is charged, with a 50 bps custody fee due annually, while a minimum balance of $500,000 is required. Expect super fast SLAs, support for ERC20 tokens, staking, multiple user accounts, and privileges, and fully audited statements, and industry-leading financials.

Coinbase Asset Hub

The Coinbase Asset Hub is an application designed to make listing new cryptocurrency assets easy while facilitating high exposure and secure storage for investors and their teams. Coinbase has done a great job of streamlining the asset listing process. The singular interface conveniently manages the full lifecycle of a crypto asset while potentiating a distribution reach of up to 35 million traders. Listing using the Asset Hub ensures that the currency meets legal, technical, and security compliance, removing the burden from developers, which can be a great aid to small and large teams alike.

Approval for listing through the Coinbase Asset Hub requires a rigorous standard listing evaluation to be submitted. Coinbase lists several criteria that raise red flags in the approval process. Coins and tokens deemed for investment value or profit lacking tangible use will trigger an extended review. Superuser privileges enabling unilateral administrative action like being able to control the blockchain and transactions will threaten Coinbase’s safety. lowering the chance of listing. Similarly, if the cryptocurrency network exhibits too great of a degree of centralization, it will not be passed by the Coinbase Asset Hub. Private source code is another matter that will lead to intensive security reviews, thus lowering the chance of listing. Coinbase must be able to verify all code.

As one can see, the Coinbase Asset Hub guarantees that only coins with a practical future make it through the listing process. For those who do qualify, it’s hard to fault the simplicity of managing a new coin or token launch that Coinbase offers. From listing to promotion, the Asset Hub helps at every step of the way.

Coinbase Analytics

Coinbase Analytics is both a diverse source of blockchain information for traders and analytics firms to leverage and a fine example of the powerful security and transaction processing capabilities that backs Coinbase. The Coinbase Analytics engine connects cryptocurrency transactions to tangible, real-world entities by leveraging decentralized blockchain attribution information capabilities. It is one of the world’s most powerful cryptocurrency compliance engines for governments, financial institutions, and large cryptocurrency trading or investment firms.

With Coinbase Analytics, analysts can evaluate risk in real-time on millions of addresses while fraudulent activity on currencies like Bitcoin and Ethereum is logged with an alert triggered automatically. From plotting multiple ERC-20 tokens on one chart to building custom cases that are easy to share with other team members, Coinbase Analytics lacks nothing. Complete freedom to search via any identifier allows the analyst to truly understand the owners and controlling users of any wallet, while flexible case management integration empowers third-party tools with greater insights than ever.

Training and support from Coinbase’s expert investigations team ensures enterprises have complete control of their asset coverage and insights, while centralized compliance manages liquidity, custody, and regulatory prerequisites for the firm.

Coinbase Private Client

The Coinbase Private Client platform invites groups of traders and investors to receive consultation and advice while navigating large cryptocurrency investments. The Private Client service is targeted at ultra-high net worth individuals, personal investment vehicles, trusts, and family offices. Each unit is assigned a full team with a dedicated account manager to help with onboarding and account support. Additionally, the Coinbase coverage desk grants accurate institutional research and insights concerning market movements to assist in growing a portfolio.

All private clients integrate with Coinbase Custody which places funds into cold storage. The platform has a long record of investment consultation and sophisticated trading on behalf of customers. With a specialization in large trades and a personalized trading strategy devised on a one-on-one basis to understand the needs and approach of the customer, the Coinbase Private Client platform runs a highly successful agency-only model.

Coinbase Frequently Asked Questions

The gorgeous UX and clean design make navigating Coinbase easy for beginners. However, all traders also have Coinbase Learn, providing beginner guides, tutorials, practical advice, and important market updates for investors of all skill levels.

Both Coinbase and Coinbase Pro are completely free to use, with only trading fees applicable to each transaction. Registration and holding a private or exchange-hosted wallet are free.

Coinbase is one of the most secure and highly trustworthy cryptocurrency exchanges in the world. Not only has Coinbase successfully protected the funds of every user in the history of operation, but it operates out of San Francisco, which means all activity is regulated. If Coinbase detects any suspicious account behavior, all funds are immediately frozen until a support team contacts the cryptocurrency holder.

Coinbase is one of the most secure exchanges in the world. There has never been a direct hack leading to a loss of funds. Buying cryptocurrency is safe, and the wallet is secure, but most traders typically transfer their holdings to a private wallet when not actively trading nonetheless.

Coinbase is fully compliant with all applicable laws in every jurisdiction it operates in. Coinbase complies with The Bank Secrecy Act, The USA Patriot Act and is also a Money Services Business registered with The Financial Crimes Enforcement Network.

Both the Coinbase Wallet that holds cryptocurrency privately and the Coinbase hosted exchange-based wallet is highly secure. The hosted wallets store the private keys for the trader but remain safe enough to be used as public receiving addresses.

The Coinbase app and dApp browser is available on Android and iOS. On both platforms, users report speedy startup and smooth operation throughout all features and functions. Adding cards and funding sources is straightforward, and all the trading functionality offered by the Coinbase web-based trading platform is available through the app.

Every bank-based fiat currency transaction used to fund a Coinbase wallet takes between 3 and 5 business days, which can easily translate to a week when factoring in weekends or public holidays. In order to guarantee the safety of all investors, Coinbase enforces a safe waiting period to confirm that the funds are received securely. The same waiting period applies to auto deposits. The only way to fund a Coinbase account instantly is to buy cryptocurrency using a debit or credit card or to send crypto from the Coinbase USD wallet.

Conclusion

If you’re looking for a simple trading platform to buy cryptocurrency in the US, Coinbase and Coinbase Pro are both excellent options. Coinbase is ideal for spot market trades and conversions by investors who want to buy limited holdings with no learning curve and the least effort. Anyone making a sizable trade and those actively playing the market will find Coinbase Pro quick, cleanly laid out, and quite cheap by industry averages. Even though multiple support channels are offered, many users complain that Coinbase customer service is extremely slow. This being said, Coinbase has never been hacked, and no investor has ever lost any money, so their service must be effective even if sluggish. Non-US traders will inadvertently look elsewhere for a broader selection of tradable coins and more frequent new listings, but to US traders and anyone looking for stablecoins, Coinbase is one of the best exchanges out there.

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