What is Coinbase?
Coinbase is the largest US-based cryptocurrency exchange, and also ranks as one of the largest in the world based on trading volume, liquidity and traffic. It was established in 2012 and is fully licensed and regulated, operating in all US states except Hawaii. When Coinbase was first operational, it only supported Bitcoin, but today it offers over 160+ coins, and plans to include more in the future.
My Overall Thoughts on Coinbase
Coinbase is one of my top recommendations for US residents who want to enter the crypto market, for 3 main reasons:
1) It has an incredibly user-friendly interface that is easy for first-timers to navigate. The platform is very intuitive, and there are even educational tools to help newbies learn more about cryptocurrency.
2) There are over 160+ of the most popular cryptocurrencies available on Coinbase, with more coins to come in the future. You will most likely find the cryptocurrency you are looking to invest in on Coinbase.
3) Coinbase is an extremely secure and trustworthy exchange, that has been in business since 2012, is fully licensed and regulated, and even has personal insurance to cover customers' assets in the unlikely scenario that the platform is hacked.
If you are a US resident and a newcomer to the crypto market, Coinbase is an exchange that I highly recommend you consider.
Key Features & Advantages of Coinbase
Coinbase has some great features that make it one of USA's most popular crypto exchanges. I've summarized them here for you:
Comparison Table of the Best Crypto Exchanges in the USA
Cryptocurrency is offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk.
What Services does Coinbase offer?
If you have just started looking for a cryptocurrency exchange in the US, you will probably find that there are so many different options, and it's hard to decide which one to use. I will discuss the best services offered on Coinbase so you can see why it is one of the top choices for US residents.
Quick and easy sign-up and verification process: To open an account with Coinbase is a simple process. It only takes a few minutes to sign up, verify your email address and your phone number. You will also need to prove your identity, so for United States residents, that means providing your social security number. Once that is set up, you can start depositing and buying crypto straight away.
Crime insurance cover in case Coinbase is hacked: Coinbase keeps 98% of its digital assets in offline cold storage, safe from hackers, but 2% remain online to facilitate trading volume. Coinbase carries crime insurance to protect a portion of digital assets held across their storage systems against losses from theft, including cybersecurity breaches. This means that if you lose your crypto stored on Coinbase in a hack, they will endeavor to cover you for that loss. To find out more, read Coinbase's article about insurance.
High levels of security: Coinbase takes its security seriously, storing 98% of its digital assets offline in cold storage. Its security measures include 2FA (2-factor authentication), biometric logins (fingerprint and face ID), and data encryption, with USB drives and paper backups distributed geographically in safes and vaults around the world. All Coinbase employees must pass a criminal background check and their hard drives are encrypted.
Over 160+ cryptocurrencies available: Coinbase is the largest crypto exchange in the USA, and if offers over 160+ of the most popular cryptocurrencies for you to buy, sell or trade. Coinbase also has high liquidity so you are able to buy and sell your coins quickly. All of the major coins are available, such as BTC, ETH, ADA, DOGE, SOL, DOT as well as plenty of smaller altcoins.
Coinbase Earn - free crypto while you learn: As a newbie in the crypto market, you are probably keen to learn more about crypto. Coinbase has videos on its site, that teach you about certain cryptocurrencies, and the amazing thing is they even pay you in crypto to learn about it! For example, you can earn $9 in COMP token by watching 3 short videos (3 minutes each).
Android and iOS mobile apps available: If you want to check the price of crypto on the go, you need a mobile app. Some crypto exchanges don't offer an app, and it's a headache trying to access your crypto in your phone browser. Coinbase has an excellent app for Android and iOS. It has over 10 million downloads, as stated on Google Play store, with a high 4.4 star rating out of 513K reviews. The app is very user-friendly and has a clean, fresh interface.
Coinbase Pro - lower fees and advanced trading functions: For experienced crypto traders, you might want to consider using Coinbase Pro instead of Coinbase. Coinbase Pro (previously known as GDAX) is a separate exchange where you buy and sell from other users, and has advanced functions such as stop losses and limit orders. Coinbase Pro also charges lower fees in comparison to Coinbase. Click here to compare fees for Coinbase Pro and Coinbase.
Registered with FinCEN and licensed in USA: Coinbase is registered as a Money Services Business with FinCEN (Financial Crimes Enforcement Network) and complies with several financial services and consumer protection laws. Some of these are:
- The Bank Secrecy Act, which requires Coinbase to verify customer identities, maintain records of currency transactions for up to 5 years, and report certain transactions.
- The USA Patriot Act, which requires Coinbase to designate a compliance officer to ensure compliance with all applicable laws, create procedures and controls to ensure compliance, conduct training, and periodically review the compliance program.
- Most states’ money transmission laws and corresponding regulations.
Coinbase is licensed to engage in money transmission in most US jurisdictions and it complies with all applicable laws and regulations in each jurisdiction in which it operates.
Coinbase wallet: Coinbase has a wallet available for its users so you can store crypto on your phone instead of on the exchange. It is a software product that also allows you to access a growing range of decentralized innovation. You can buy and store ERC-20 tokens, participate in airdrops and ICOs, collect digital art and other NFTs, browse decentralized apps (DApps), shop at stores that accept crypto, and send and receive crypto to and from anyone in the world. The Coinbase wallet has over 1 million downloads according to Google Play store, and a high rating of 4.3 stars from 24K reviews.
Coinbase Fees
Coinbase's fee structure is somewhat confusing, and they do charge higher fees compared to other exchanges in the USA. If you want to save on fees, check out the Coinbase Pro fees which are significantly lower.
Coinbase Deposit Fees
When you buy crypto on Coinbase, you can choose to pay for it directly or deposit fiat currency into your account first. If you deposit beforehand, there are two methods available for US residents.
- ACH Transfer incurs zero fees
- Wire Transfer incurs $10 fee
Coinbase Trading Fees
When you purchase crypto on Coinbase, they will charge a fee that comprises two components. First they take a 0.50% spread fee, and then they take an additional 'Coinbase fee' which is the larger of the 'flat fee' or the 'variable fee' which are shown in the tables below.
Flat fee
Transaction value | Fee |
|---|---|
$10 or less | $0.99 |
$10 to $25 | $1.49 |
$25 to $50 | $1.99 |
$50 to $200 | $2.99 |
Variable fee
Payment Method/Payout Method | Effective Rate of Conversion Fee |
|---|---|
US Bank Account | 1.49% |
Coinbase USD Wallet | 1.49% |
Debit Card or PayPal | 3.99% |
Instant Card Withdrawal | up to 1.5% (minimum $0.55) |
Coinbase Withdrawal Fees
The withdrawal fees on Coinbase vary based on location and payment method. The most common fiat withdrawal methods are listed here, with their respective fees:
Bank Transfers (SEPA): €0.15
US Wire Transfer: $25
Please note that users in Singapore and Australia will not be able to make fiat withdrawals. This is due to restrictions that you can read about in this Coinbase help article.
Coinbase Pro Fees
Coinbase Pro's fee structure is more straightforward, and the fees are much lower when compared to Coinbase. The fees are based on 30-day trading volume, which is the total amount traded in the last 30 days (excluding volume for trading Stable Pairs). The more you trade, the lower your fees will be as both a Taker and a Maker. The Taker fee is charged if you place an order that gets matched immediately, whereas the lower Maker fee is charged if you place an order that is not immediately matched, and is placed on the order book.
Pricing tier | Taker Fee | Maker Fee |
|---|---|---|
Up to $1 | 0.04% | 0.00% |
$1 - $10k | 0.50% | 0.50% |
$10k - $50k | 0.35% | 0.35% |
$50k - $100k | 0.25% | 0.15% |
$100k - $1m | 0.20% | 0.10% |
$1m- $20m | 0.18% | 0.08% |
$20m - $100m | 0.15% | 0.05% |
$100m - $500m | 0.10% | 0.02% |
$500m - $1b | 0.06% | 0.00% |
$1b - $2b | 0.05% | 0.00% |
$2b+ | 0.04% | 0.00% |
Pros and Cons of Coinbase
- Coinbase privately insures their own platform so your funds are safe in the event there is a hack
- Simple and user-friendly interface
- Only takes a few minutes to register and start trading
- Over 160+ cryptocurrencies available
- Extremely secure and trusted platform
- Complicated fee structure that is higher than competitors
- Customer service lacks live chat support - email assistance only
Verdict
Coinbase is one of the most popular crypto exchanges in the US and for good reason. It is a secure and legitimate exchange with a user-friendly platform that is perfect for beginners. The wide range of over 160+ cryptocurrencies are plenty of choice for new and experienced investors alike. The fact that Coinbase has Crime insurance cover, as well as storage of 98% of its digital assets offline make it one of the best exchanges in terms of security. The fees are a little higher than other exchanges, but for peace of mind and ease of use, I think it is a reasonable tradeoff. If you are an experienced trader that prefers advanced tools and lower fees, you can also use the sister platform, Coinbase Pro.
If you are still unsure which exchange to use, you can read more about the best crypto exchanges in the USA.
Frequently Asked Questions
Yes, Coinbase is a legitimate American cryptocurrency exchange founded in 2012. It is licensed and regulated, and is registered with FinCEN (Financial Crimes Enforcement Network).
Yes, Coinbase is an extremely safe cryptocurrency exchange. It stores 98% of its digital assets in offline cold storage, and uses 2FA, biometric logins and data encryption to keep your crypto safe. Coinbase even has Crime insurance cover so that in the unlikely event of a hack, your cryptocurrencies are covered.
Coinbase is a cryptocurrency exchange where you can buy and sell cryptocurrency, but there is also a Coinbase Wallet app that is available for Android and iOS. The wallet can be used to securely store your digital coins alongside other features. If you are after enhanced security, you can also purchase a hardware cold wallet for offline storage.
Yes, Coinbase is a trusted cryptocurrency exchange that was founded in USA in 2012. It is licensed and regulated, and is registered with FinCEN (Financial Crimes Enforcement Network).
Yes, Coinbase is regulated, and it complies with all applicable laws and regulations in each jurisdiction in which it operates. It is licensed to engage in money transmission in most US jurisdictions and is registered as a Money Services Business with FinCEN (Financial Crimes Enforcement Network). Coinbase complies with several financial services and consumer protection laws. Some of these are:
- The Bank Secrecy Act, which requires Coinbase to verify customer identities, maintain records of currency transactions for up to 5 years, and report certain transactions.
- The USA Patriot Act, which requires Coinbase to designate a compliance officer to ensure compliance with all applicable laws, create procedures and controls to ensure compliance, conduct training, and periodically review the compliance program.
- Most states’ money transmission laws and corresponding regulations.
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