Coinbase is a cryptocurrency exchange that's built for beginners. With its easy-to-use interface, large selection of digital assets and low minimum purchase amount, it's no wonder Coinbase is the tenth largest exchange in the world by trading volume.
Looking beyond ease of use, investors may find some drawbacks. In its 2022 Q1 earnings report, Coinbase said that users could lose all of their cryptocurrency if the company goes bankrupt. Then, Coinbase lost more than half its value in the first half of 2022 and laid off 18% of its workforce.
Aside from company performance, other drawbacks include comparatively high trading fees and a complex fee structure. Coinbase users are also required to hand over a lot of personally identifying information, which goes against the goal of anonymizing digital transactions. For those reasons, veteran crypto investors may want to look elsewhere.
Read our full Coinbase review to see if it's the crypto exchange for you.
Coinbase review: Features
It's easy to start investing in cryptocurrency with Coinbase, but you may not love all of the features. Here's an overview:
When you buy crypto and NFT assets, you can store them online through your personal account or in a Coinbase wallet, which is available via mobile app. Users can also import other wallets to the Coinbase app or transfer coins from other wallets.
Of course, digital storage isn't the most secure method for holding digital assets, but it might be the preferred option for beginning investors.
For more security, you can store your assets in a digital "vault." Assets in a vault can't be exchanged immediately, but rather the owner has to approve transactions within 24 hours of any request, and a 48-hour waiting period must pass before the transaction is made.
Rewards for learning
Users who complete Coinbase's learning modules can earn free crypto. You'll be required to upload a photo ID and wait for verification (it could take up to 48 hours), watch a series of short, graphic slides and complete a three-question quiz (answers are easily searchable online) to earn a reward.
The modules are packed with crypto insider jargon, so you may not learn much, but you can currently earn $1 of GRT, GAL, ALEPH or AMP for completing each module.
Coinbase offers the same deposit insurance as Gemini, eToro and some other exchanges.
Users get up to $250,000 in pass-through FDIC deposit insurance, which covers certain cash deposits in the event of a security breach, and certain types of theft not caused by user error.
Contrary to popular belief, crypto holdings aren't insured through this coverage. The FDIC has published a Deposit Insurance Fact Sheet to provide clarification.
Coinbase comes in at seven for security on CER's list of Top Crypto Exchanges. Most of Coinbase's digital assets are encrypted and stored offline, and account access requires 2-step verification.
But some of the exchange's security measures require users to sacrifice their anonymity.
Each user must provide their name, email address, phone number, employment status and the last four digits of their Social Security number to set up an account, and then must submit photo ID to enable crypto sending and receiving.
Like most websites, Coinbase also automatically collects IP addresses and uses geotracking, and the exchange verifies identity information to comply with anti-money laundering laws.
Coinbase review: Pricing
There's no up-front fee or subscription fee to set up an account, but Coinbase fees can still be a deterrent. The exchange's fees are complex and highest for trades under $10,000. They're also high when compared to other exchanges. Here's a breakdown:
- 0.40% Maker Fee
- 0.60% Taker Fee
- 1% Conversion Fee (to exchange crypto for fiat currency)
- Variable Network Transaction Fee
Investors may prefer an exchange like Crypto.com, where the maker/taker fee is 0.075% for trades under $250,000, or Binance, where some trades have no maker/taker fee at all.
Coinbase review: Ease of use
Where Coinbase shines is usability. You can visit the website or download the app (available for iOs and Android), set up an account and be ready to make trades in a matter of minutes.
Once your account is set up, you can easily sort through the long list of assets in the exchange and see a quick view of each one's performance chart. Choose from "simple" or "advanced" views, or filter for lists like "gainers" and "losers." Once you've made your choice, you can also easily set up recurring buys.
To make a purchase, you'll have to link a payment account. Like other exchanges, you can't use a credit card. If you choose to link a bank account, you'll have to wait three to five days to complete a transaction. Alternatively, instant payment can be set up via debit card, PayPal, Apple Pay or Google Pay.
It's worth noting that the exchange has instituted occasional trading pauses, and customers have made ongoing complaints about technical issues accessing their accounts. Both of these issues can force users to delay their transactions.
For example, Coinbase acknowledged on August 3, via its @CoinbaseSupport account on Twitter, that users were having login and connectivity issues. Despite announcing twice that the issue was resolved, customers were still Tweeting their long-standing login complaints and error/alert screenshots up to 10 days later.
Coinbase review: Support
Phone support is available 24/7 in the U.S. Chat support is also available around the clock. However, you'll start by chatting with a virtual assistant before being connected to a live agent, and it can be challenging to get someone live.
Users can also submit help requests via email or send a DM through Twitter to @CoinbaseSupport. Like web chat, getting anything more than a scripted response via Twitter DM can be difficult.
How Coinbase stacks up against the competition
Coinbase is one of many platforms for investing in crypto. Here's a look at how it compares to your other options:
Crypto.com has a higher CER security rating (it's number one) than Coinbase. The exchange also has lower trading fees than Coinbase, allows margin trading, and the minimum purchase is $1, but Crypto.com trading is not currently available in New York.
Binance is for more advanced investors. It has a higher security rating and lower trading fees than Coinbase, including zero fees for Bitcoin trading.
But Binance has experienced far more regulatory issues than Coinbase and has been in the spotlight for facilitating money laundering. The exchange is banned in the U.K., was temporarily banned in Italy and is also banned in the U.S.
Hence, investors have to go through the sister company, Binance.US, which is still not available for people living in Hawaii, New York, Texas and Vermont.
Unlike Coinbase, Robinhood is a brokerage, so investors can use the platform to buy stocks and ETFs but can't make exchanges.
Robinhood charges 0% for crypto purchases, and the minimum investment is just $1, but the brokerage hosts a smaller selection of cryptocurrencies than Coinbase, and purchases aren't allowed in Hawaii and Nevada.
Coinbase review: Verdict
Coinbase can be a good choice for beginners. The exchange ranks well for security, accounts are easy to set up, and the trading interface makes it easy to filter for the digital assets you want.
But more advanced investors may find Coinbase disappointing. Between occasional trading freezes, technical snags and comparatively high fees, and handing over a lot of personal information, frequent traders may find the platform unsatisfactory.
Frequently Asked Questions (FAQs)
What is the minimum investment amount for Coinbase?
You can start investing on Coinbase with a minimum of $2. The exchange doesn't charge up-front fees or a subscription fee to set up an account.
Does Coinbase insure my crypto?
Coinbase doesn't insure crypto. However, if you store fiat currency in your Coinbase account, up to $250,000 may be covered by pass-through FDIC deposit insurance.
What is Coinbase Pro?
Coinbase Pro is a crypto trading platform owned by Coinbase. Coinbase users can upgrade to Pro for free and get access to a more advanced interface, but Coinbase Pro will no longer be available after late 2022.