About Coinbase
Coinbase is one of the world’s largest cryptocurrency exchanges. It is also the only major exchange to trade publicly, floating on the Nasdaq composite in April 2021.
It boasts an easy-to-use platform that offers a simple fiat on-ramp for investors to enter the blockchain world.
While Coinbase may not have the lowest fees on the market or offer as many features as certain rivals, its status as a public exchange provides a security blanket for users in the form of increased transparency and regulation.
Combining its public status with a strong suite of educational resources and longevity in the market (it was founded in 2012 when one bitcoin traded for $6), Coinbase has become one of the most popular options for investors and institutions alike.
Pros and cons
Like any exchange, Coinbase has pros and cons.
Some traits will be more relevant to certain customers than others, as each individual may want different things from the exchange and value certain attributes over others.
This is especially true given Coinbase is the only major exchange that is publicly listed, which places it in a unique position compared with competitors.
Coinbase overview
Coinbase does its job well. Mainly, it serves as a fiat on-ramp where customers can purchase crypto.
It is extremely simple to use and offers perhaps the most intuitive experience of all exchanges. The website and app have a minimalist feel yet pack in many of the most popular features — the sign of a well-designed product.
Once the crypto is purchased, some experienced traders may want to look elsewhere in pursuit of lower fees and greater arrays of features. Coinbase’s offering is strong, but other exchanges have larger selections, so if you intend to use the more bespoke offerings or purchase obscure coins, it may be something to consider.
But if users are simply looking to buy crypto with fiat, Coinbase is as good as any exchange.
The exchange also runs a learning program to teach beginners about different aspects of the crypto world. While much crypto investing comprises extreme-volatility gambling, Coinbase makes more effort than most to educate users on the basics of several crypto assets.
It is also necessary to mention security. The world of cryptocurrency is extremely opaque, with a lack of transparency commonplace and many scandals rocking the industry over the past few years. Coinbase is positioned as well as any to help provide peace of mind, however, given the increased disclosure requirements it adheres to as a result of being a public company.
In simple terms, Coinbase offers a very good platform and a strong app where customers will find it easy to deposit fiat and buy crypto, outpacing its rivals in many key areas.
Key perks
Coinbase has two strong perks that stand out. The first is its status as a publicly traded company. This is especially important in crypto, where it has proven difficult for customers to trust companies in the space.
The second key advantage is how intuitive the platform is to use. Crypto can be intimidating and daunting to new users, and Coinbase has done a good job of building a simple platform that is not difficult to navigate.
Additionally, its educational resources benefit those looking to learn about the space.
Disadvantages
Coinbase is not perfect. While we highlighted its status as a public company as a massive pro with regard to transparency, it is headquartered in the U.S., where the regulatory picture is unclear.
This was demonstrated in March when the Securities and Exchange Commission issued Coinbase a Wells notice, documentation informing the exchange that it could face legal action over potential violations of U.S. securities law.
But it should be made clear that it is highly unlikely customer assets will ever be at risk, which should be the main concern for investors.
Aside from the gray area that is regulation, users of Coinbase may have to accept higher fees than some rivals offer. Other exchanges also boast more features, such as greater staking or options trading, which may render Coinbase less suitable for high-volume traders or active users.
User experience
Coinbase’s user experience is excellent. The site is very easy to use, matched by a smooth-functioning app.
Its customer service is far from perfect but is better than most other exchanges. And its customer reviews are generally strong. Bank transfers are very straightforward, but there is a fee to wire USD.
Its security features are simple to set up. Two-factor authentication is recommended and can be implemented with a few clicks of your mouse, with several options for a preferred route. You can also set up whitelisting of withdrawal addresses for increased security.
Commissions and fees
Coinbase’s fees are more expensive than those of certain rivals, and there are two different fee mechanisms on the platform.
The first is the fee charged when placing simple buy and sell orders. The process may be simple. But the fee mechanism is complex, involving a spread charged by Coinbase to lock in your price, which will be seen on the screen before you finalize the transaction.
The second allows you to interact directly with the order book via the advanced trade feature. It has a more straightforward fee calculation. It is computed on a tiered basis based on the total trading volume of the customer.
Coinbase advanced trading fees
For U.S. customers, ACH deposits and withdrawals are free. But wire transfers will carry a $10 fee for deposits and $25 for withdrawals.
How Coinbase compares
Who is Coinbase good for?
Coinbase is useful for people who are looking to bridge into crypto from the fiat world.
The exchange is easier to use than most, particularly for beginner investors or less tech-savvy investors. Compared with its rivals, Coinbase does many important things very well: security, ease of use and transparency.
Our take
Coinbase is an excellent crypto exchange and the outright leader in many categories.
While the regulatory picture is unclear in the U.S., that is true for all crypto exchanges. The recent threat of legal action from the SEC is concerning. Still, the exchange is as safe as any on the market concerning customer assets, given the disclosure requirements demanded of a public company.
Coinbase’s ease of use and increased transparency make it a great place to buy crypto with fiat. There may be better options for the minority of high-volume or very active traders, as Coinbase has higher fees than many rivals. But for most users, the effect will be relatively insignificant.
However, care should be taken in venturing elsewhere, as the cryptocurrency space is notoriously opaque, and no other exchange is publicly listed.
In a year that has seen many scandals rock the crypto industry, such as the collapse of the FTX exchange, it’s hard to look beyond safety and transparency as the two biggest factors.
Frequently asked questions (FAQs)
Beginners need to be extra vigilant because the cryptocurrency industry is so new, volatile and dangerous for those who do not understand what they are doing.
Overall, Coinbase is as easy as any exchange to use and hence a good place to start for those new to the space. Of course, that says nothing about the safety of the underlying assets.
Coinbase is a U.S. company listed publicly on the Nasdaq. Therefore, it is subject to increased regulatory requirements, with many concluding that makes it one of the few trustworthy platforms in the space.
Withdrawing from Coinbase is straightforward. Customers can withdraw via wire transfer (there may be a fee, depending on the method) or directly to an external wallet. If you are doing the latter, ensure the correct address is typed in, as crypto transactions are irreversible.
Coinbase launched a non-fungible token (NFT) marketplace in April 2022. But it is separate from the exchange and still in beta.
