Coinbase Review 2019
With more than 20 million active users and $150 billion traded, Coinbase is considered the dominant cryptocurrency exchange on a global scale. 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 it is trusted by so many users. 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 let you know whether it is safe to put your money on Coinbase.
Coinbase was founded in 2012 and is currently one of the oldest exchanges. Ever since its first day, its aim has been 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 and today offers plenty of other features, such as a brokerage for other cryptocurrencies (Bitcoin Cash, Ethereum, Litecoin, Ethereum Classic), a wallet, a developer API, etc. This helped the company gain popularity and slowly pave its way to the top.
Today, Coinbase is available to users from 32 countries, overcoming one of the biggest issues that cryptocurrency investors face – the country-specific limitations.
Security and Transparency
This is the first and most important characteristic that users should evaluate when choosing the most appropriate cryptocurrency exchange to put their money on. 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:
In the rest 31 countries where Coinbase operates, it is not required to comply with any laws, due to the more liberal local regulations on companies that run cryptocurrency-related businesses.
The fact that the company is backed by some of the leading investors adds a significant level of transparency to its business. Here is a complete list of all those who have invested in the exchange.
One of the most notable advantages of Coinbase is the fact 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, Coinbase says that it keeps 98% of users funds in cold storages, distributed all around the world. Apart from that, it further enhances the security by employing 2FA on each account, as well as SSL and AES-256 wallet encryption.
On Coinbase users can trade the following instruments:
Coinbase also offers hybrid instruments such as the BAT (Basic Attention Token), ZRX (0x) and USDC (USD Coin).
However, there are plenty of exchanges offering a wider variety of traded instruments and if you do not want to be limited in what you trade it is better to choose another exchange.
Yet, for those who are making their first steps in the cryptocurrency world or are willing to trade the most popular coins, then Coinbase is a great choice.
Fee Structure and Supported Payment Methods
Coinbase supports wire transfers (SEPA included), credit and debit cards. This makes it easier for beginner investors to purchase cryptocurrencies with just a few clicks.
When it comes to the fees, it is worth noting that Coinbase is considered a quite expensive exchange.
The prices of the listed instruments are similar to those on other trading venues, although they may be slightly higher than the market ones and Coinbase also charges a 0.5% spread for all cryptocurrency transactions.
In addition to that, you will be required to pay a separate Coinbase Fee which is calculated as follows:
If you are paying with a debit or a credit card, you will be charged fees of approximately 3.99%.
With that said, although Coinbase provides flexible payment methods, it charges high fees that depending on your trading strategy, may end up eating a big part of your gains.
For more information about the fee structure of Coinbase, check here.
Apart from the traditional cryptocurrency brokerage service, Coinbase offers plenty of other features as well.
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, as well as avoid the hefty Coinbase fees by funding their accounts through bank transfers and then purchasing through Coinbase Pro (more about its fee structure can be found here).
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.
For its institutional clients, Coinbase also offers custody services. It charges up to $10 000 implementation fee, as well as a 50 bps annual custody fee.
The account balance minimum is set at $1 000 000. With its custody service, Coinbase targets hedge funds, banks and larger financial institutions that seek a secure and flexible way to deposit their capital.
The instrument is a great choice for those who are 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. More information about the index and its structure can be found here.
This is where Coinbase falls behind. In recent years, the exchange’s reputation started to deteriorate and is now considered as rather controversial.
Numerous users on Reddit and Trustpilot share their frustrations when using the exchange services even for basic Bitcoin buying and selling.
Users share many different problems, such as missing funds, inability to withdraw their capital, prolonged transaction times and other similar issues, resulting into losses.
Those losses occur due to price fluctuations or inability to capitalize on certain market momentum, the main problem is the common lack of response from Coinbase’s representatives.
Users, waiting 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 amount of frustrated 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
Security and Transparency
Fee Structure and Supported Payment Methods
Coinbase is a simple and very easy to use exchange, considered by many as the best choice for newcomers. Yet, due to its pretty high fees and the limited number of investible instruments, 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 are making your first steps on the cryptocurrency market or you are just a HODL-er who is not bothered by the high fees on Coinbase, then it is a great option to go for.
However, bear in mind that although that the platform has invested a lot to ensure the funds of its customers are safe, it is always better if you store your coins in your own wallet.
In a Nutshell:
Is it safe to link a bank account to Coinbase?
Yes, it is completely safe.
How long does verification on Coinbase take?
Less than an hour.
How to close my Coinbase account?
Click “Close Account” on the Security Settings page
Is Coinbase safe?
Yes, it is the most trusted exchange worldwide and your funds are insured.
What are the Coinbase alternatives?
There are plenty of other exchanges – CEX, Coinmama, Kraken, Gemini, Binance, Bitfinex, Poloniex, BitPanda and other.