Coinbase Review

With more than 43 million active users and over $455 billion traded, Coinbase is considered the dominant cryptocurrency exchange on a global scale. Some people say that they provide one of the best cryptocurrency apps. But is that true?

Founded in 2012, the exchange has slowly but steadily paved its way to becoming an industry leader. Today, it is the world’s biggest Bitcoin broker and the biggest cryptocurrency exchange. In the following Coinbase review, we will examine the pros and cons of Coinbase and find out why so many users trust it.

We will also take a look at the reasons why the number of customers, let down by its service in recent years, is constantly growing. And finally, we will answer the frequently asked question – Is Coinbase safe?

coinbase review

What Is Coinbase

Coinbase was founded in 2012 in San Francisco and is currently one of the oldest exchanges. Ever since its first day, it has aimed to ease the process of buying, selling, and investing in cryptocurrencies. Although it started mostly as a Bitcoin brokerage, during the years, it has expanded its services. Today, Coinbase offers plenty of other features, such as a brokerage for other cryptocurrencies:

  • Bitcoin Cash
  • Ethereum
  • Litecoin
  • Ethereum Classic

Coinbase is trusted by over 43m users from more than 100 countries. Over the years, the exchange has processed more than $455b total trading volume, ranking it on the top of all crypto trading venues worldwide.

Coinbase Wallet

Don’t mistake the Coinbase Wallet with the Coinbase app, which is available for iOS and Android. While the Coinbase app is the product for individuals looking to trade cryptocurrencies, Coinbase Wallet is an integrated developer API.

Coinbase Wallet is a standalone app that allows users to custody and store their digital assets. It also supports a dApp browser, through which Coinbase’s clients can explore the decentralized web. You can use Coinbase Wallet without having a Coinbase account.

The distinctive feature of Coinbase Wallet is the fact that it allows users to manage their own private keys and store their crypto assets directly on their devices. Alternatively, your assets won’t be held with a centralized brokerage or exchange.

Through Coinbase Wallet, you can basically turn any device into a cryptocurrency wallet. More importantly, it is globally available.

If you want to trade cryptocurrencies, however, you should download the Coinbase App instead.

Now, let’s proceed with the Coinbase App review by looking at the security aspects.

Security and Transparency

This is the first and most important characteristic that users should evaluate when choosing a cryptocurrency exchange. Coinbase adheres to the active U.S. regulations at a federal and state level. Some of the regulatory bodies and laws that the exchange complies with are as follows:

  • FinCEN – Coinbase is registered as a Money Services Business within the U.S.
  • The Bank Secrecy Act
  • The USA Patriot ACT

The fact that the company is backed by some of the leading investors adds a significant level of transparency to its business. Coinbase raised $217M from world-leading investors like USAA, FundersClub, USV, ICE, and NYSE. One of the most notable advantages of Coinbase is that all investors’ capital that is held online is insured.

On its website, the company states that “the insurance policy would pay out to cover any customer funds that are lost.” However, it also notes the insurance covers only losses related to Coinbase cybersecurity or employee theft. Other problems like breaches to individual accounts aren’t covered.

However, Coinbase says that it keeps 98% of users funds in cold storage, distributed all around the world. Apart from that, it further enhances security by employing two-factor authentication (2FA) on each account and SSL and AES-256 wallet encryption.

Traded Instruments

On Coinbase, users can trade the following instruments:

  • Bitcoin
  • Bitcoin Cash
  • Ethereum
  • Ethereum Classic
  • Litecoin
  • Ox
  • Basic Attention Token
  • USD Coin
  • Zcash
  • XRP
  • Stellar
  • Augur REP
  • DAI
  • EOS
  • Chainlink
  • Tezos
  • Dash

And this isn’t even the full list. There are also many other altcoins supported. Bear in mind that the fees and the availability of certain cryptocurrencies may vary depending on the jurisdiction.

Although Coinbase’s list of featured assets isn’t the most extensive one, it does the job. The exchange is an excellent choice for those who are making their first steps in the cryptocurrency world or are willing to trade the most popular coins.

Supported Countries

Coinbase is one of the exchanges with the biggest international presence. It is available in over 100 countries from 6 continents. However, depending on the country of residence, users might be restricted from using certain Coinbase features. The supported payment methods also depend on the jurisdiction.

For example, the USA, Canada, and Mexico aside, users from the rest of the supported North American countries are restricted to using Coinbase only to convert cryptocurrencies. The case is quite similar to South America, Asia, and Africa. Users from most European countries are free to enjoy the full capabilities of the Coinbase platform.

It is worth noting that users from China are prohibited from using the exchange. This isn’t a Coinbase-related issue but a valid point for almost all foreign cryptocurrency trading platforms.

You can find complete information about the supported countries and the geo-restrictions over platform capabilities and payment methods.

Opening an Account

If you decide to use Coinbase and wonder how to get started, we should say that opening an account is a fast and straightforward process. Before you can start trading, you have to sign up by providing your names, email address, and your preferred password. Next, you will have to verify your email.

Coinbase also requires your telephone number to receive a verification code. Although this isn’t the best-case scenario, there is no way around it.

Once the account is created, you are required to verify your identity and deal with some basic KYC procedures. As a result, in addition to the common requirement to provide a selfie, you also have to provide an official document like a government-issued I.D., passport, a driver’s license, or else, depending on the region you reside in.

U.S. citizens must verify their identity via state identification, which means they will have to provide their social security number.

Once you have an account, you should make sure to enhance its security by enabling two-factor authentication. Fortunately, Coinbase offers plenty of 2FA methods.

Trading Experience

Coinbase is considered the mainstream crypto exchange, so trading there is as simple as it gets. If you are a beginner, you won’t find a place where buying cryptocurrencies is simplified more.

Due to the exchange’s global exposure, the team has decided to include several language versions of its platform. You can choose to navigate the site in:

  • English
  • Deutsch
  • Spanish (separate versions for users from Spain and Latin America)
  • French
  • Indonesian
  • Japanese
  • Thai
  • Italian
  • Polish
  • Portuguese (separate versions for users from Portugal and Brazil)
  • Russian
  • Turkish

Trading Platform

With Coinbase, you won’t have to download and install any software. The platform is browser-based, which makes it easy to access from everywhere. It runs fast, the user interface is exceptionally intuitive, and the user experience is very smooth.

Once you log-in, you will immediately see your dashboard. It features your balance, your portfolio statistics, historical performance, and more. You can customize the time frames and look at hourly, daily, weekly, and yearly charts.

You can easily buy, deposit, and convert crypto by clicking on the banner above your portfolio balance. You can also place recurring daily, weekly, bi-monthly, and monthly orders with automated execution.

Mobile Apps

Coinbase has dedicated Android and iOS apps. Aside from buying and selling cryptocurrencies, they give you access to automated price alerts, track your portfolio performance and balance, and more.

The apps have an aesthetic user interface and are very beginner-friendly. They have very high ratings on Google Play and the App Store and millions of downloads, ranking among the top apps in the “Finance” category on both platforms.

Similar to the web platform, Coinbase’s mobile apps also support multiple languages.

Fee Structure and Supported Payment Methods

Coinbase supports various payment methods, including wire transfers (SEPA included), credit and debit cards.

The debit card payments make it easier for beginner investors to purchase cryptocurrencies with just a few clicks.

If you prefer a wire or an ACH transfer, on the other hand, you will have to wait a few days for settlement.

When it comes to the fees, it is worth noting that Coinbase is considered one of the more expensive exchanges.

Price Per Instrument

The prices of the listed instruments are slightly higher than the market ones, and Coinbase also charges 0.5% for all cryptocurrency transactions. The exchange adds that the actual spread might vary due to market fluctuations, occurring between the time the price is quoted and the actual execution.

In addition, you are required to pay a separate Coinbase Fee which is calculated as follows:

  • Transactions with value ≤ $10 – a fee of 0.99 of the local currency (i.e., $0.99, €0.99)
  • Transactions with value ≤ $25 – a fee of 1.49 of the local currency (i.e., $1.49, €1.49)
  • Transactions with value ≤ $50 – a fee of 1.99 of the local currency (i.e., $1.99, €1.99)
  • Transactions with value ≤ $200 – a fee of 2.99 of the local currency (i.e., $2.99, €2.99)

If you pay with a debit or a credit card, you will be charged fees of approximately 3.99%.

The most cost-efficient method is bank (SEPA) transfers, which are free for deposits and €0.15 for withdrawals.

All-in-all, Coinbase charges high fees that may end up eating a big part of your gains depending on your trading strategy.

The fees on Coinbase Pro are more reasonable as it employs the maker-taker model. The transaction fees with the different payment methods also are more favorable.

Additional Features

Apart from the traditional cryptocurrency brokerage service, and compared to competitors like eToro, Coinbase offers plenty of other features.

Coinbase Pro

Formally known as GDAX (a popular cryptocurrency exchange owned by Coinbase), Coinbase Pro is an advanced cryptocurrency trading platform.

It is a great way for users to experience crypto trading to the fullest. The advanced platform offers access to real-time order books, charting tools and trade history. It is highly intuitive and user-friendly, thus making it easy even for beginners.

Coinbase Pro is designed to appeal to the needs of sophisticated traders who need robust charting and top-notch trading experience. The platform allows you to place limit, stop, and market orders with lower commission fees when compared to most of the other crypto exchanges.

Among the most distinguishing factors of Coinbase Pro’s are the charting features. Traders can plot 1-minute candle or line charts and adopt all types of overlays. The supported trading indicators aren’t as much as on TradingView, but they cover the basics.

On Coinbase Pro, you can trade over 100 trading pairs. It also allows for margin trading.

Many traders often skip Coinbase and jump directly on Coinbase Pro. The reason they do that is that the professional platform offers lower fees and is way more functional. Coinbase Pro is an excellent choice for active traders and more serious investors.

Coinbase Earn

The newest enhancement Coinbase Earn is now available to investors in over 100 countries. Coinbase already announced this program by the end of 2018. But it is not something like a bonus for investing in cryptocurrencies.

Instead, you get paid for taking quizzes about Zcash, Stellar Lumens, and Basic Attention Token. Think of it as an easy way to earn money while learning about the crypto world.

Coinbase Earn includes a variety of different courses exploring how specific cryptocurrencies work. Each course is divided into separate segments, most of which are short 1- or 2-minute videos.

The program won’t make you rich, though. The rewards vary between 3 and 10 units of the particular cryptocurrency. For example, if you complete all courses, you can earn up to $31. Still, it is a great way to monetize your learning process.

Coinbase Custody

For its institutional clients, Coinbase also offers custody services. They are conducted through an independent, standalone entity, Coinbase Trust Company, LLC. It is a fiduciary under N.Y. State Banking Law.

Coinbase claims its platform is one of the world’s most trusted cold storage solutions. A major part of this is the offered insurance and the continuous financial and security audits conducted by external firms (SOC 1 Type II and SOC 2 Type II).

It charges up to $10,000 implementation fee and a 50 bps annual custody fee. The account balance minimum is set at $1,000,000.

Coinbase Custody’s clients benefit from a professional, institutional coverage team located worldwide, including London, Dublin, New York, Chicago, and San Francisco. Besides, they are granted robust reporting features, including audited statements.

Coinbase targets hedge funds, banks, and larger financial institutions that seek a secure and flexible way to deposit their capital with its custody service.

Coinbase Prime

The prime brokerage service is another offering targeted at institutional clients. It grants access to deep liquidity, funds insurance, personal custody support, trading, and more.

Coinbase also serves high-frequency traders, liquidity providers, and market makers through its APIs and professional trading platform by providing them tools to expand their businesses.

Coinbase Prime also appeals to the needs of family offices, trusts, and high net-worth individuals, as it provides access to personal account managers, 24/7 support, deep liquidity and OTC trading desk access, and sophisticated execution.

The asset listing, launch, and airdrop service is another compelling use case of Coinbase Prime. Its offering includes listing on all Coinbase trading venues, education programs, custody support, and more.

Aside from the mentioned market participants, Coinbase Prime is also used by venture capital funds, hedge funds, asset management firms, sovereign wealth funds, and more.

Coinbase Vault

The feature is aimed at those looking for a place to store bigger amounts of cryptocurrencies and for the long-term. Think of it as a safer alternative to the Coinbase Wallet.

It supports similar features, but the difference is that the Vault can prevent immediate withdrawals. Alternatively, if someone compromises your account and tries to cash out all your funds, the imposed 48-hour delay will give you and the Coinbase support team enough time to react and prevent the theft.

Also, the ownership of the Vault can be split between multiple users. That way, each time a transaction is initiated, it would have to be authorized by all registered email addresses.

Coinbase states that 98% of the funds stored in the Vault are geographically distributed in physical vaults and safe deposited boxes.

Coinbase Index

The instrument is a great choice for those willing to take advantage of the benefits of crypto index funds. The Coinbase Index tracks the overall performance of the digital assets available for trading on the exchange, weighted by market cap.

Apart from that, Coinbase offers additional services such as the institutional trading platform Coinbase Prime. Now let’s finish the review about Coinbase by taking a closer look at the customer service Coinbase provides. Is this something where they shine?

Informational Resources

Coinbase does a pretty good job in covering the basics every crypto newcomer should know. The Learn section of the site includes all types of content, including videos, articles, market updates, a glossary, and more. You can find how-to guides, tips and tricks, tutorials, and other insightful pieces to help you get familiar with the world of cryptocurrencies. The topics include anything from how to start using Coinbase to setting a wallet, dealing with taxes, trading, and more.

Besides, Coinbase also has a blog where it publishes the most recent news and updates related to the company. Keep an eye on it as the exchange often publishes information about upcoming promotions, staking programs, new features, and other relevant stuff.

There is also an extensive help section where users can find more about how to make the most out of the platform, Coinbase Pro, Coinbase Commerce, Coinbase wallet or the Custody solution.

All-in-all, this is one of the strongest points of Coinbase and is unrivaled within the industry. The platform features all types of information to ease its users’ journey into the cryptocurrency trading world.

Customer Service

If you want to find out about the service quality of an exchange, always start from its customer support. The way the platform treats its clients is indicative of how serious and credible it is.

You can get in touch with Coinbase’s team through various channels. The most common and quick is by email. The best way is to use the request ticket form on the site, where you will have to fill out a form explaining your issue in detail. Although Coinbase doesn’t specify an exact time that you should hear back from them, in most cases, you will be contacted in one or two business days.

You can also contact Coinbase through social media. The best place to do so is Twitter. The Coinbase team is pretty active there, but it is better to stick to email support if your matter is urgent or more complex.

The exchange also has a telephone number, but it advises clients to use it only if their issues are of utmost importance (i.e., if you suspect your account has been compromised). Also, please notice that phone support might not be available in certain jurisdictions. The priority there is the U.S., the U.K., and the European market.

There is also a chatbot, but it isn’t very helpful. It tries to understand your issue by asking you generic questions, after which it will provide you links or sources of helpful information.

Reputation and User Reviews

Coinbase is one of the oldest and most established cryptocurrency exchanges. For a service provider that big and famous, you might be thinking they have a stellar reputation. Yet, with Coinbase, it is precisely the opposite, as this is where the exchange falls behind its competitors.

In recent years, the exchange’s reputation started to deteriorate and is now considered somewhat controversial. Today, dozens of Bitcointalk and Reddit threads are where users report their frustrations with the platform, even when it comes to basic Bitcoin buying and selling. Besides, its Trustpilot score is among the worst in the industry. So, how is that possible?

Let’s say that Coinbase’s business is enormous. They already have millions of clients, and attracting new or retaining the existing ones isn’t their top priority. In fact, in recent years, the exchange focused significantly on working with enterprises.

While Coinbase is far from being classified as a “scam,” it surely doesn’t make the life of its users easy, according to the reviews. Many reports about issues like missing funds, inability to withdraw their capital, prolonged transaction times, account suspensions with no clear reasons, unresponsive support, and more.

However, don’t be quick to judge or decide against using the exchange. Bear in mind that, in many cases, users organize themselves in Telegram or Discord channels and collectively push a campaign against a particular service provider. With Coinbase, for example, a majority of the 1-star user reviews on Trustpilot are from a single day, which makes it hard to believe it is a coincidence.

Due to that, always take user reviews with a grain of salt. Prioritize threads on Reddit and Bitcointalk and track the progress of different cases. Often, the customer support resolves the user’s issue at a later point, and they get back to report it to fellow crypto enthusiasts.

On the other hand, frustrated users left to wait for weeks for their problems to be solved often end up choosing to move to a competitor exchange. Although there are plenty of clients happy with the service they are getting, the number of dissatisfied users in recent years really started to put Coinbase’s reputation at stake. With Coinbase Pro, the reported customer support issues are way less.

Coinbase Review Summary

Coinbase is a simple and easy-to-use exchange, considered by many as the best choice for newcomers. Yet, due to its pretty high fees, Coinbase is often overlooked by experienced users.

Another fact that makes the exchange fall behind its competitors is the way it serves its clients. Although the company has invested plenty of resources into simplifying the interface and the operation of its platform, the feeling is that Coinbase remains focused predominantly on satisfying its investors and achieving growth rather than serving its clients efficiently. The truth is that, although the exchange is far from perfect, it remains one of the best choices in the industry and the easiest way to buy or sell cryptocurrencies.

If you decide to use Coinbase to make your first steps on the cryptocurrency market or are just a HODL-er who is not bothered by the high fees, it is a great option to go for.

However, bear in mind that although the Coinbase platform has invested a lot to ensure its customers’ funds are safe, always make sure to store your coins in your own wallet.

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FAQ

Is Coinbase legit and safe?

Coinbase is safe to use, and one of the most trusted cryptocurrency exchanges worldwide, and your funds are insured. It is also safe to link a bank account to Coinbase.

What Is the Coinbase Minimum Deposit?

There is no active Coinbase minimum deposit. It is upon you to decide how much you transfer and invest. People can start investing in cryptocurrencies with a small amount.

How to Close My Coinbase Account?

To close your Coinbase account, click Close Account on the Security Settings page. Once done, you can request to close your account.

What Are the Coinbase Alternatives?

There are plenty of other exchanges like CEX, Coinmama, Kraken, Gemini, Biance, Bitfinex, Poloniex, BitPanda, and others.

Can you convert Bitcoin to cash?

Fiat currency can be converted to cryptocurrency on most exchanges. The same goes for Bitcoin at Coinbase. Consider that a fee has to be paid for each transaction.

About the author: Alexander is the founder of daytradingz.com and has 20 years of experience in the financial markets. He aims to make trading and investing easy to understand for everybody, and has been quoted on Benzinga, Business Insider and GOBankingRates.