Figuring out where to get started in crypto investing can be a pretty daunting task. That’s why we’re going to start at the very beginning: choosing a trustworthy exchange to buy, sell and hold your crypto assets. Today, we’re going to take an objective look at everything that you need to know about the crypto exchange: Coinbase.
Check out our full round-up of the best crypto wallets here.
What is Coinbase?
Coinbase is the largest US-based cryptocurrency exchange and ranks amongst the largest in the world based on daily trading volume. It was founded all the way back in 2012 and now operates in over 100 countries around the world. American users can access Coinbase in every state except Hawaii.
Since its creation in 2012, Coinbase has continued to offer one of the most comprehensive selections of digital assets in the crypto market, offering its users over 160+ cryptocurrencies for purchase.
This means that investors from around the world can purchase all the large-cap cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) as well as most of the smaller market cap tokens. If you are looking for really niche altcoins or more obscure tokens, then Coinbase may not be the best exchange for you — however, if you are just looking to build up a portfolio of well known crypto assets, Coinbase has you covered.
To get a better understanding of Coinbase, let’s use a classic Pros & Cons list to weigh up the verdict.
Pros & Cons of Coinbase
- Beginner Friendly: If you’re new to cryptocurrency, then Coinbase is the exchange for you. The Coinbase app is one of the most beginner-friendly and simple to use crypto apps available anywhere. If you just want to buy and hold crypto assets, Coinbase takes out all the complicated and unnecessary trading jargon, charts and info so that users can focus on the simple stuff.
- Earn Free Crypto By Learning: Coinbase has a feature called Coinbase Earn, where users are rewarded in free cryptocurrency for watching short educational videos and completing a short quiz. This is a cool way to learn about crypto while actually getting paid for it.
- Great Choice for American Users: Coinbase is definitely geared towards American users, however it remains a solid choice for Aussies that are looking for a secure and simple platform to use. American users are also offered certain discounts for linking a US-based bank account.
- Massive Selection of Major Tokens & AltCoins: Perhaps one of the most frustrating experiences is getting completely set up on a new app or platform and then realizing that an altcoin your friend was telling you about isn’t on this app you’ve just signed up for. Chances are you won’t have that problem with Coinbase, as it offers over 160+ digital assets, covering a pretty solid chunk of the crypto market that you’d want to invest in.
- Packed With Different Features: Coinbase offers more advanced investors a massive selection of unique trading features such as staking, margin trading and leveraged futures on its more advanced app: Coinbase Pro. If you’re looking to trade different cryptocurrencies in a range of different pairings or fiat currencies, then upgrading to Coinbase Pro is relatively simple and easy to do as an existing Coinbase user.
- High Fees: The largest problem with Coinbase is that its fees are relatively high when compared to other exchanges and the fee structure can get pretty complicated. There are other exchanges like Binance and Coinspot that offer lower instant purchasing fees, but unless users are purchasing cryptocurrency quite frequently this discrepancy tends not to be a major deal-breaker.
- Lack of Crypto Assets: While other exchanges offer selections of over 300+ digital assets, Coinbase only offers around 120 which is on the lower side for a major exchange. If you’re a user who is looking to buy mostly well-established crypto assets then this won’t be an issue.
- Poor Customer Service: While Coinbase is loaded with features, customer service is lacking when compared to other exchanges like CoinSpot, Swyftx or Digital Surge. While these exchanges all offer some form of LiveChat customer support Coinbase does not, meaning that technical or administrative issues can often be frustrating to resolve.
Coinbase Fees Explained
Fees are ultimately how crypto exchanges and platforms make their money, so it’s really important for investors to understand how much they’re paying every time they make a trade. Fee structuring can be pretty tricky, as platforms often like to disguise hidden costs in the form of strange fees.
Here are the main types of fees that users of Coinbase will come across:
Coinbase Purchase Fees
The first fee that crypto investors will encounter is the deposit/purchase fee. This is because investors need to deposit funds before they can start trading. For Australians, Coinbase does not support direct deposits of AUD into a Coinbase account, therefore the only way for Aussies to purchase crypto is to use a debit card — which is a major downside.
- The flat fee incurred for using a debit card is 3.99%.
- Additionally, a base fee of 0.5% is also applied.
- This means that the total fee for Australian users comes to a hefty: 4.49%.
Coinbase Transaction Fees
When purchasing crypto on Coinbase, it will charge a fee that is made up of two parts. First Coinbase takes a 0.5% “spread” fee, and then they take an additional ‘Coinbase fee’ which is a ‘flat fee’ based on the value of the trade.
- For trades $10 or less flat there is a $0.99 fee.
- For trades $10 to $25 there is a $1.49 fee.
- For trades $25 – $50 there is a $1.99 fee.
- For trades $50+ there is a $2.99 fee.
Coinbase Withdrawal Fees
If you’re wondering how to withdraw from Coinbase, this is where things can get a bit rough for Australian users, as there is no way to withdraw crypto in AUD to an Australian bank account. This means that you have to transfer your crypto assets to a different exchange that supports AUD withdrawals…
Is Coinbase Safe to Use?
There is no doubt that Coinbase is one of the most trustworthy and high security crypto exchanges. Coinbase takes security to a new level by utilizing security measures such as 2FA, data encryption, biometric logins, and by storing 98% of their crypto assets in cold storage as well as using paper backups that are distributed in secure vaults around the world. Coinbase is also ISO 27001 certified, which is one of the highest information security clearances possible.
If Coinbase isn’t exactly what you’re looking for, there are plenty of alternatives. The alternatives listed here are ranked in order of similarity and preference for using Australian Dollars.
- CoinSpot: Australia’s largest cryptocurrency platform with more than 350 digital assets available.
- Digital Surge: Another Australian exchange with more than 200 cryptocurrencies that operates natively in AUD. Has a quick verification process but higher fees than Coinbase.
- Swyftx: Also an Australian platform with more than 260 digital assets available. Swyftx offers slightly lower trading fees and also allows users to ‘stake’ their crypto assets to generate passive income.
- Cointree: An Australian operated exchange and fully AUSTRAC-regulated. Offers similar features to Coinbase but with a smaller selection of tokens and slightly higher fees.
- eToro: Offers commission-free crypto trades with the added bonus of social and copy trading.
Overall Coinbase Review:
Coinbase is a great platform for crypto newbies in the United States, however it may not be the best for Australians. Not only are the fees extremely high when compared to Australian-based exchanges like Coinspot, Swyftx and Digital Surge, there is also no option to sell crypto into AUD or withdraw your money into an Australian bank account.
However, if you’re willing to trade some functionality for security and peace of mind, Coinbase remains one of the world’s most secure crypto exchanges. Coinbase is also registered with AUSTRAC actively preventing financial crimes, scamming and any other unsavory business from occurring on the platform.
Finally, Coinbase’s selection of over 160+ different cryptocurrencies is a relatively solid selection for investors looking to invest in the main tokens available. Investors will be able to purchase all of the major crypto assets, such as BTC, ETH, BNB, XRP, ADA, as well as a healthy selection of major altcoins.