Coinbase offers clients an “all crypto, all the time” trading platform that provides one of the largest selections of cryptocurrencies in one place. The exchange’s Pro platform has clear competitive pricing, but unfortunately the basic service tier offers expensive trades and keeps its complex fee structure hidden. Coinbase allows clients to take custody of their cryptocurrency holdings and lets them earn staking rewards (income) from them, both of which are uncommon among the handful of brokerages that even support cryptocurrency trading.
Traders looking for crypto action as a sideline to stocks or options may want to have a look at Interactive Brokers, which just introduced low-cost trading in a handful of cryptocurrencies. Other names to consider include Gemini and eToro, both of which are crypto-focused brokers.
- Crypto-only traders
- Active traders
- Custody and staking rewards
Coinbase at a glance
|Securities tradable:||103 cryptocurrencies|
|Cost per trade:||Basic tier: Rates that range from 1.49 to 9.9 percent, plus a spread markup of 0.5 percent
Pro tier: Sliding scale starting at 0.5 percent and declining based on volume
|Customer service:||Email, phone for emergency support, 24/7 chat. Will roll out 24/7 phone support by end of 2021.|
|Account fees:||$10 per month inactivity fee after 12 months of not logging in|
|Mobile app:||The Coinbase mobile app is available on the Apple App Store and Google Play Store|
Pros: Where Coinbase stands out
Coinbase Pro commissions
Coinbase stands out from much of the pack in its commissions structure, but only if you’re using the exchange’s Pro service tier. (For more on the basic service tier, see below.) At the Pro tier you’ll pay a fee of at least 0.5 percent for monthly trading volume less than $10,000. But you may be able to whittle that fee down even further using the exchange’s volume-based pricing.
The pricing structure for Pro is scaled, so that fees decline the more you trade. What you pay depends on your total dollar trading volume over the prior 30 days. Coinbase also uses a maker-taker pricing model, so if you’re adding liquidity to the market (a maker) or taking liquidity (a taker), you’ll potentially be charged a different fee.
For example, if you trade less than $10,000 in a month, both a maker and a taker pay 0.5 percent. Trade between $10,000 and $50,000, and both pay 0.35 percent. Above that level, the fees begin to diverge. Monthly trading volume between $50,000 and $100,000 would give takers a fee of 0.25 percent and makers 0.15 percent. And the fees ultimately decline even further, but you’ll have to be trading staggering amounts of cryptocurrency for it to make any difference.
The all-in fees compare well to eToro, where a spread markup fee starts at 0.74 percent and runs up to several percent, though it’s more than Interactive Brokers, which charges 0.12 – 0.18 percent, depending on your monthly volume (with a $1.75 per trade minimum).
Coinbase has an enviable selection of cryptocurrencies that you can trade – 103 at last count – and that should prove wide enough for all but the most hardcore crypto trader. You’ll get the most popular cryptocurrencies, including Bitcoin, Ethereum, Cardano, Solana, XRP and dozens more that are up and coming. So you’re probably going to find what you’re looking for here.
That’s in sharp contrast to other brokers or financial apps that advertise crypto trading but offer only a handful of the most widely followed coins. For example, Robinhood offers trading in just seven cryptocurrencies – which is still better than many brokers – while Interactive Brokers just launched trading in four cryptos.
If you’re looking for something else besides crypto on Coinbase, you’re going to be out of luck. If you want to trade stocks, options and ETFs while accessing only the most popular crypto coins, Robinhood, Webull or Interactive Brokers could be good alternatives, however.
Unlike brokers that are focused more on trading, Coinbase allows you to take custody of your crypto assets yourself. The exchange offers its own crypto wallet, or you can bring your own wallet. Either way, you can pick the solution that best fits your needs. And that’s unusual in the trading world, with most traditional brokers not allowing you to hold your own assets.
Coinbase also allows customers who hold some cryptocurrencies with them to participate in staking rewards. Staking is like earning interest in a bank account but with much different risks. Staking generates income from your holdings as they’re used to validate transactions in a given cryptocurrency, and Coinbase shares that reward with you.
Clients can earn staking rewards on just a few cryptocurrencies right now, including Ethereum and Tezos. The exchange handles the technical side of things and the extra coins – or fractions of them – are added to your account on a set schedule.
Cons: Where Coinbase could improve
It can’t be stated any other way: If you’re using Coinbase’s basic platform you’ll be hard-pressed to find a fee schedule before you actually place a trade. In fact, Coinbase has gone out of its way to hide its fee schedule, purposely obscuring the once public – and confusing – list of fees.
Now, to be clear, you will be able to see your trading commission, but only right before you’re ready to place your trade. In an era of highly transparent pricing, it’s a serious knock on the company if it can’t provide a list of trading fees so that you can make a sound judgment.
Why does Coinbase do this? It’s not clear, but the broker’s hefty fees for its basic tier probably have a lot to do with it. And that’s further corroborated by the broker’s good disclosure of fees for its Pro platform – where its costs are competitive with rivals’ and in many cases beat them.
Trading commissions on basic tier
It’s advisable to avoid Coinbase’s basic service tier if you can and jump right to its Pro tier, given its lower pricing. Just how high are commissions on the basic tier? Well, frankly it’s hard to say (see above). But the most recent data suggest that you’ll pay a lot on a percentage basis.
Let’s break down two of the most common charges on the last published schedule of fees and see what traders would pay if they were buying $1,000 in Bitcoin:
- A 1.49 percent fee, if paying from a bank account or Coinbase dollar wallet
- A 0.5 percent spread markup
If you’re using Coinbase’s entry tier, you’ll be hit with at least 1.99 percent in fees. And they go up from there, because the company uses a sliding scale. Want $10 of Bitcoin? You’re on the hook for a fee of $0.99 – or 9.9 percent – plus that 0.5 percent spread markup – for 14.9 percent all in. And that’s not on just one side of the transaction, either. You’ll get hit coming and going.
The effective percentage declines until your purchase is $200, and then the broker switches to a fee based on your payment method, starting at 1.49 percent (as above) and rising to 3.99 percent if you use a debit card. And you’ll still be paying that spread markup on top of it.
That’s a confusing welter of fees and markups across payment methods, and it can be hard to navigate. So it’s better to skip the entry tier and move straight to Pro’s competitive prices.
Coinbase makes a strong choice if you’re looking for a place to trade crypto:
- Its wide selection of popular cryptocurrencies means you’re probably going to find what you want to trade, but you’ll be able to trade only crypto here.
- Clients have the ability to earn staking rewards and can take custody of their holdings themselves.
- Commissions on the Pro platform are competitive, but clients trading small-dollar volumes on its entry-level platform should seriously consider looking elsewhere.
Robinhood makes a good alternative if you’re looking to trade only some of the most popular cryptocurrencies, especially if you’re looking to keep costs lower. Webull is another alternative, though its selection is even narrower than Robinhood’s. Another broker that offers trading in stocks, options and crypto is tastyworks, a newer player with an attractive commission structure.
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