Coinbase Review: Pros, Cons, And Alternatives

Coinbase is one of the largest cryptocurrency exchanges and platforms in the United States (and world).

To trade cryptocurrencies, you need to use a cryptocurrency exchange. However, there are plenty of stories about exchanges being hacked. It can be a bit scary knowing that any money you deposit into an exchange might be stolen.

Additionally, many exchanges are located overseas. And, depending on the countries where exchanges are located, they could have looser regulations and security, which can make them targets for being hacked.

Coinbase, however, is an exchange that's working hard to reduce these security concerns. It's based in the U.S. and says that it's never been hacked. It's also easy to use and has competitive rates. For many of the cryptocurrencies Coinbase offers, you can even buy them directly with USD. In this article, we’ll take a closer look at the Coinbase cryptocurrency exchange.

Bonus: Open a new account at Coinbase and get up to $200 in crypto after you make your first trade! Open an account here >>

Who Is Coinbase?

Coinbase is a cryptocurrency exchange. It was founded in 2012, about four years after Bitcoin was created. It is based in San Francisco, CA, with offices across the world. Coinbase is a fully licensed and regulated Bitcoin exchange.

Coinbase is one of the largest exchanges in the world and is currently listed as #2 on coinmarketcap.com. It has consistently added its list of supported cryptocurrencies over time. In September 2021, it reached a new milestone when over 100 currencies were included on its asset directory list for the first time.

What Do They Offer?

Coinbase's popularity stems from having one of the easiest and fastest buying processes. It also helps that they are a U.S. regulated company.

Since Coinbase is in the U.S., if you are a U.S. resident, you won’t have to file IRS Form FBAR (Report of Foreign Bank and Financial Accounts) for foreign accounts with over $10,000.

On the Coinbase platform, you can trade Bitcoin, Bitcoin Cash, Ethereum, and Litecoin without having to first convert from your base currency into another cryptocurrency

Liquidity

When choosing a cryptocurrency exchange, it’s important that the exchange has plenty of liquidity for trading. Otherwise, currency spreads can be wide, which makes trading expensive.

Coinbase is a very large exchange that has plenty of liquidity, so wide spreads should not be a concern. Liquidity also means that you’ll be able to conduct large transactions without any issues.

Just how big is Coinbase? As of writing, it has exchanged $150B+ in cryptocurrencies and has 35M+ users worldwide. Try Coinbase and get $5 of free Bitcoin after buying or selling at least $100 of crypto.

Wallet

Like other crypto exchanges, Coinbase offers a digital wallet for storing your digital assets yourself. With the Coinbase Wallet, you can keep all of your crypto on your own device.

The Coinbase Wallet apps are decentralized and are available on both the Apple App Store and the Google Play store. They adhere to the highest security measures including Secure Enclave and biometric authentication technology.

USD Coin Rewards

Coinbase users can also use the exchange to buy USD coin. USD Coin is a "stablecoin," which means that if you have a US bank account, you can always redeem 1 USDC for US $1.00. 

Each of the USD Coin that is available for purchase on Coinbase is backed by actual US dollars and can be stored in Coinbase Wallet or any digital wallet that it compatible with Ethereum. 

Also, verified Level 2 Coinbase account holders can earn rewards on the UDSC that they hold. Right now you can earn up to 4.35% on your USDC. Compare Coinbase Rewards with other top crypto savings accounts.

However, the USDC rewards are tiered. Here are the current tiers:

Crypto Rewards Card

The Coinbase Card allows members to spend any asset that they hold inside their Coinbase portfolios at physical or online stores. This means that you can use your crypto to buy groceries, clothing, or anything else.

You can also earn up to 4% back in crypto rewards on your card transactions. You can receive the top 4% rate if you choose to earn your rewards n Stellar Lumens (XLM). Or you can earn 1% back if you choose to receive your rewards as Bitcoin (BTC).

The Coinbase Card can be used at any retailers that accept Visa debit cards. There is no annual fee attached to the card.

Borrow Against Your Bitcoin

Coinbase will allow members to borrower up to $100,000 in cash, using their Bitcoin assets as collateral. These loans do not require a credit check and come with an interest of 8% APR.

The most unique feature of these Bitcoin-backed loans is that they don't have any set repayment plan. You're only required to pay off the interest due each month. Other than that there are no monthly payments. You can take as little or as long as you want to pay off your principal. 

Keep in mind that the longer your loan is outstanding, the more interest you'll pay overall. Also, it should be noted that other platforms are currently offering much lower interest rates on crypto-backed loans. 

Coinbase One

Coinbase One is an upgraded level of Coinbase that gives you great perks for a monthly subscription fee. It offers zero commissions on the first $10,000 in trades, priority support 24/7, access to upgraded analytics via Messari Pro, and an additional $1,000,000 in insurance protection.

You can get all of this for $29.99 per month.

Coinbase Pro

Coinbase Pro is a trading platform for those who trade often. Pro offers more charting tools, order types (stop and limit orders), and even has an API that you can use to create trading bots.

Importantly, Pro uses a maker/taker fee structure instead of a flat fee model. This means you’ll get better rates for trading higher volumes. Coinbase Pro is restricted to certain geographies, which you can see here.

Are There Any Fees?

Yes, for the standard Coinbase platform you’ll pay a spread fee of 0.5% plus a transaction fee for each cryptocurrency buy/sell. The fee schedule is as follows:

• Total transaction amount is less than or equal to $10 — $0.99 | €0,99 | £0,99
• Total transaction amount is more than $10 but less than or equal to $25 — $1.49 | €1,49 | £1,49
• Total transaction amount is more than $25 but less than or equal to $50 — $1.99 | €1,99 | £1,99
• Total transaction amount is more than $50 but less than or equal to $200 — $2.99 | €2,99 | £2,99

You'll also pay a variable fee if you use an instant buy payment method rather than using funds that have already been transferred from your bank and cleared. These fees are:

• U.S. Bank or Coinbase Wallet: 1.49%
• Debit Card: 3.99%
• PayPal: 3.99%
• Apple Pay: 3.99%
• Wire Transfer: $10

Coinbase Pro's fee structure is much easier to understand. First, purchases must be made with either previously deposited funds or by trading coins so the variable payment method fees are eliminated.

Also, rather than always paying a 0.50% spread, Pro users are charged either a maker fee (0.00 to 0.50%) or taker fee (0.04 to 0.50%) that's based on their 30-day trading volume. Orders that aren't immediately matched are charged the maker fee. But if your order is immediately matched, you'll pay the taker fee. Here is the Coinbase Pro fee schedule.

Finally, you'll pay a for withdrawing your crypto to fiat with Coinbase that varies by currency. Instant cashouts come with higher fees of up to 1.5%.

How Does Coinbase Compare?

Coinbase is a reliable platform and it's easy to use. It also supports more currencies for U.S. residents than virtually every other exchange and it's one of the few platforms that has already made a crypto rewards card available to all of its customers. 

However, Coinbase fees are higher than other exchanges, especially for non-Pro users. It also doesn't pay interest on crypto holdings (other than the dismal 0.15% it's currently paying on USDC) and the interest rates on its Bitcoin-backed loans are high. Here's a closer look at how Coinbase compares:

How Do I Open An Account?

After filling out the initial signup form on Coinbase.com, you'll be sent a verification email. Next, you'll be asked to identify yourself as an "Individual" or "Business." You'll also need to provide your phone number if you'd like to set up 2-factor authentification.

Coinbase will ask you to verify your identity, using a driver’s license, photo ID, or passport. Finally, you'll need to link a form of payment, such as a bank account, debit card or credit card.

Is My Money Safe?

Cryptocurrency exchanges are often a top target for hackers. However, Coinbase prides itself on being one of the few exchanges that has never been hacked. And they say that hold less than 2% of their customer's funds online.

In Coinbase did suffer a breach of its own physical security or cyber security, it does have an insurance policy in place to cover any losses. Additionally, your USD wallet is covered up to $250,000 by FDIC Insurance. However, neither of these insurance types would cover losses related to a compromise of your own individual Coinbase account which is why it's imperative to use a strong password and restrict access to your login credentials.

Coinbase allows you to use 2-step verification when logging into your account and depositing/withdrawing money. Its Universal 2nd Factor (U2F) works with a security key or Time-based One Time Password (TOTP) through a mobile authenticator app, such as Duo or Google Authenticator.

Note that Coinbase is a custodial service. This means you don’t have direct access to your funds stored there or the associated private keys. Keep in mind that Coinbase can and has frozen user accounts without prior notice, although this has only happened in extreme cases.

Contact

Like other cryptocurrency exchanges, Coinbase doesn't place a heavy emphasis on human support. Instead, it encourages users to use its FAQs to troubleshoot problems themselves. If you do need personal assistance, your only option is to submit a support ticket.

If you suspect that your account has been hacked, there is a phone number that you can call to access the company's automated service for disabling your account. For U.S. residents, that number is 888-908-7930.

Currently, Coinbase's has a "Bad" rating on Truspilot with an average customer review score of 1.6/5 out of over 5,500 reviews. The company is also unaccredited and has an F rating with the Better Business Bureau (BBB).

Why Should You Trust Us?

We have been writing and researching cryptocurrency since 2016. We have been reviewing and testing all of the major cryptocurrency exchanges since 2017. Our team understands the crypto and NFT space, but also understands the intersection with TradFI (traditional finance). Our goal is to help bridge the gap between those in the cryptocurrency space, with those curious about it in the traditional finance space.

Furthermore, we have a compliance team that checks the accuracy of rates and service offerings regularly. 

Who Is This For And Is It Worth It?

Due to the high volatility of cryptocurrency, crypto investing won't be for everyone. If big up and down swings really raise your blood pressure, you might want to stay away from Coinbase or any other cryptocurrency exchange. 

Even for those who have a strong tolerance for volatility, crypto holdings should still only represent a small percentage of a well-diversified investing portfolio (preferably less than 5%).

But if you are someone who wants to use a portion of your investing money to dabble in crypto trading, Coinbase is one of the best places to do so. It offers high liquidity, a wide variety of products, a strong security track record, and ranks #1 on our list of the top 10 Bitcoin and crypto investing sites. See the full list.

Common Questions

Here are the answers to a few common questions people ask about Coinbase?

Do you need a minimum balance to join Coinbase Pro?

No, any Coinbase customers, regardless of their account size, can use the Pro trading platform.

Is Coinbase good for beginners?

Yes, due to the user-friendliness of its web and app interfaces, Coinbase is often considered one of the best cryptocurrency exchanges for beginners. However, experienced traders may want to look for a platform that provides more charting tools and/or charges lower trade fees.

How do I get my money out of Coinbase?

Customers can withdraw their cryptocurrency to fiat at any time via an ACH transfer. These transfers typically take 1-2 business days to complete. Coinbase also supports 24/7 instant cashouts to bank accounts or cards for an additional fee.

Is Coinbase offering any bonuses or other promotions?

Yes, new customers can get $5 in Bitcoin after they've successfully verified their account by providing their photo ID and made their first trade.

Features

Disclaimer: Up to $200 in crypto promotion for new users who make a cryptocurrency purchase on Coinbase. Limited while supplies last or Coinbase revokes this incentive at its sole discretion. Coinbase reserves the right to change the terms, eligibility criteria, and payouts for all incentives at any time, for any reason. Void where prohibited or if Coinbase determines that the customer is not eligible for the offer. Terms apply.