CoinBase. A 2012 exchange for investors to trade crypto worldwide. Especially during 2017’s boom, this was the go-to platform to buy your first Bitcoin.
As a beginner, you may find that Coinbase feels easier to use. As a pro trader, you may like the 100s of tokens available. But for many, CoinBase was simply the best-known option.
In 2021, that’s hard to say. The number of exchanges you can explore is overwhelming. And why it doesn’t make-or-break your investments, it involves long-term consequences and opportunity costs.
Coinbase might look great if you haven’t heard of Kraken, Binance, KuCoin, NDAX, or FTX. In this review, we’ll find out how competitive Coinbase is for the Canadian crypto-trader.
What is CoinBase?
Brian Armstrong and Fred Ehrsam founded Coinbase in San Francisco, USA. They launched in 2012 along with Kraken, Blockchain.com, LocalBitcoins, Bitfinex, and CoinDesk. For the last decade, investors have rated it among the top 3 international crypto exchanges.
Its mission is to help new investors get started in blockchain investing, whether that’s cryptocurrencies, DeFi, or NFTs. Not only does it make it easy, but Coinbase also pays you to learn crypto. For example, token rewards on quizzes and VISA cashback rewards.
While veterans have mixed opinions, starters will find CoinBase invaluable, both on desktop and mobile.
Available Cryptocurrencies at CoinBase
Similar to Binance, Coinbase has a simplified and advanced version. The first one offers basic features while the other (Coinbase Pro) expands them. This includes cryptocurrency selection.
Coinbase can track almost as many coins as CoinMarketCap and CoinGecko (8,000+). But there’s only enough liquidity to trade about 124 of the top cryptocurrencies. 350+ if you use Coinbase Pro.
Here’s the selection you can expect:
- Almost all Top 50 Coins, except for competitor tokens (like Binance, FTX, KuCoin)
- Most Top 100 Coins, including projects built on ERC-20 and Polygon (except Binance Smart Chain)
- If the coin’s market cap is below $100M, it probably won’t be tradeable
Coinbase adds new coins every year.
Services offered by CoinBase
We refer to CoinBase as an exchange because that’s its primary service. Investors can trade, send, and deposit crypto in +100 countries (US & Canada included). Orders have generous daily limits and fill instantly (except when there’s network congestion.
As a regulated platform, only KYC-verified users can join CoinBase.
After you complete the profile, you can access these services:
- The Coinbase Exchange offers ~120 tradeable coins, with expanded features on Coinbase Pro (Advanced) and Coinbase Prime (Institutional).
- Coinbase Wallet, a private WEB3 wallet. You can use it to transfer assets from the exchange wallet, hold NFTs, and store 1000s of coins across networks.
- Coinbase Yield allows holders to earn interest on five altcoins.
- Coinbase Loans offer up to $1,000,000 when backed with 40% of collateral in Bitcoin (with no credit check). And unlike the exchange wallet, it’s held in cold storage.
- The Coinbase Card is the equivalent to VISA debit cards (also available in Canada). Consumers can order it for free and earn 1–4% cashback on every purchase. It automatically converts your balance to fiat when paying.
- Coinbase Earn is a learning feature that instantly pays you for completing token quizzes (around $20, or more with referrals).
- And soon, the Coinbase NFT Marketplace will launch as well.
CoinBase Limits & Fees
You may wonder: what does it cost for a company to offer all these services across +100 countries? It’s not as low as you’d expect. But if you do like Coinbase, know that there are loyalty programs to help big traders save money.
Deposits and Withdrawals
Suppose you’re new to crypto. You just want to hold and sell for profits. Here’s the cost breakdown for basic accounts:
- Bank transfer fee: 1.49%
- Wire transfer fee: $10 (deposit) and $25 (withdrawal)
- Sending crypto to CoinBase wallet: Zero fees (from Coinbase). Your best option.
- Debit/Credit Card purchase fees: 3.80%-4%
When buying with cards, Coinbase has two options: the 4% and the fixed rates. Whichever is higher will apply:
Note: These transaction fees also apply to coin conversions.
If you want to cash out, remember these steps, because this option is hidden:
- You have to have a fiat currency in your balance (or else, sell some crypto)
- From the dashboard click on the coin (CAD, USD…)
- You’ll find the cash-out option on the right
Withdrawal options are:
- PayPal (1% fee)
- Bank Account ($0.55 to 1.5% fee for instant withdrawals)
- Credit Card (Debit unsupported)
You can withdraw $25,000 per day ($50K for Pro) via ACH.
Trading and Converting
Unless you trade over $1000, trading is expensive because of the fees (both fixed and percentages). Depending on your monthly volume, you pay from 0.50% (<$50K) to <0.04% (+$2B) in fees. And if you trade less than 200, fixed fees can still apply ($1 to $3).
Conversions are free unless you use the card. For payment processing, Coinbase charges 2.49% to convert to CAD/USD/EUR. You can “avoid” it by converting it to fiat before (4% fee or fixed rates).
There is a 0.56% spread when buying and -0.63% when selling. Below competitive standards.
How does CoinBase make money?
With ~9M monthly active users and 10K institutions, CoinBase earns a lot from exchange fees. Pro users pay lower rates but still pay a subscription. The biggest traders pay the least, but CoinBase compensates with their volume/liquidity.
Coinbase always charged “high” fees. Still, it reached ~80M users and remained relevant for a decade. Its target audience isn’t the low-volume swing-trader, but the Bitcoin first-timer, the big holder, and the institutional investor.
CoinBase Pros and Cons
Today, CoinBase is more of a crypto company than an exchange. But for this comparison, we’ll evaluate it strictly by trading features.
As for the pros:
- CoinBase offers 100–350 tradeable coins and keeps adding more
- It’s user-friendly and feature-rich, fitting both beginners and professionals
- It’s been around for a decade, so you can expect high credibility, security, and team experience
As for the cons:
- As the most expensive exchange, fees make it prohibitive for small investors (even with perfect market timing). It would be reasonable if it were the only option. Out of the 100s of options, ANY other exchange you pick will have lower fees.
- Despite coin variety, the exchange skips the most important ones. CoinBase users missed out 10X gains on Binance Coin, Terra Luna, Elrond, FTX, and Sandbox (200X+).
- Customer support isn’t as responsive as with US customers
While it may not be the best exchange for Canada, that doesn’t mean it’s not great as a platform. CoinBase has other services you might want, such as the Earn program, the yield, or the card. Not every exchange has these.
Is CoinBase Safe and Legit?
As one of the oldest platforms, CoinBase has lots of security experience. But like all exchanges, online wallets can only protect so far. And when trading on the no.1 platform in the world (back then), you get lots of hacker attention:
- In 2019, CoinBase suffered a 51% attack worth $1.1 million.
- This 2021, the platform lost over $11 million from a 2FA security flaw
- People keep losing thousands on CoinBase phishing scams
While it’s alarming, let’s beware of the “survivorship bias.” This news doesn’t make CoinBase less secure, but the opposite. And other platforms would have likely fallen too if hackers chose another one.
Anyone can break into anything, and CoinBase is an attractive target. So when exchanges claim to be unhackable, it also means they don’t know their weaknesses.
If you were hacked on CoinBase, the company will refund your portfolio, as required by the FCA regulator. Phishing, however, is a personal responsibility.
Now that the recent attack has tightened security, it’s safer than usual.
CoinBase Apps
Both IOS and Android support the three Coinbase apps:
- Coinbase rated 4.7 on AppStore and 4.4 on PlayStore
- Coinbase Pro rated 4.7 on AppStore and 4.0 on PlayStore
- Coinbase Wallet rated 4.6 on AppStore and 3.8 on PlayStore
Since they share most of the desktop features, here are the most relevant reviews:
- The account is suddenly “under review” and doesn’t allow cash-outs. This may happen to you on any centralized exchange.
- Customer support takes weeks to solve cases. Mediocre, yet standard among crypto companies.
- They change layouts/design periodically, which is confusing
- Logs out after a few hours
- “Trapped” funds on WEB3 wallet due to $100+ fees. This problem is exclusive to the ERC-20 tokens/ETH network, not to CoinBase. To avoid these, you use others (MATIC, AVAX, SOL) except Binance Smart Chain.
- No CAD supported on the balance
CoinBase Support
When paying high fees, you would expect to get special service. And while Coinbase does reinvest into more features, support doesn’t seem to be the priority. They admit they can’t keep up with everyone’s requests, so they automate it instead.
Not only it doesn’t work, but customers feel like the company doesn’t care. Again, not exclusive to Coinbase. You’ll find this treatment on most international exchanges.
You can use email/forum/live chat to contact agents. Who will likely paste the answer from the Help Center. Don’t expect a quick, easy solution.
CoinBase Referral Program
When a referee buys or sells the first $100, you both get $10 each as a welcome bonus. Compared to other programs, CoinBase doesn’t offer trade fee commissions or network referrals (if your friend refers to someone, you don’t earn anything).
Until 2021, you could earn an extra $10 per person by linking to each quiz on CoinBase Earn. We don’t know if they will reopen this program.
CoinBase vs Competitors
Maybe you already made your conclusions about Coinbase. Assuming you didn’t use the platform before, you want to contrast it with other options the market can offer. Just to make sure.
CoinBase has been compared many times to Binance. They both have dozens of features, 100s of coins, and millions of users. Professionals choose Binance because of fees, but for beginners, Coinbase feels more user-friendly.
Out of the top 10 Canadian exchanges, CoinBase is the most expensive. Buying crypto (including spread and purchase fees) costs below 1% on NDAX, Newton, and CoinSquare. Yet, Coinbase offers the most features and crypto in the country, followed by Binance and Crypto.com.
The biggest selling point is the features. You could see CoinBase as a popular exchange and jack-of-all-trades. Which implies it doesn’t excel at any of them.
Some FAQs about CoinBase
Q: Should I be worried that CoinBase locks my account?
You should be prepared, which doesn’t mean CoinBase isn’t safe. Any regulated exchange can suspend your account if convenient. According to the TOS, companies can change certain terms and rates without disclosure.
The best you can do after trading in CoinBase is to send funds to a cold wallet.
Q: How to get support for X issue?
It may take weeks of escalation to get a real person to review your case. Let alone solve it. So while you won’t like the answer, the most effective way is to avoid problems from the beginning.
If you want to invest $1000, use $10 test amounts for any actions you take. So if things go wrong, you can manage risk for the important sum. You can still recover those tiny losses if you’re willing to follow up.
Q: Should I use CoinBase Pro instead?
If you know anything about crypto, the Coinbase Pro exchange is more recommended than the classic. You get lower fees, more coins, and advanced trading options. You don’t know what you’re missing until you try it.
CoinBase Review — Final Verdict
Coinbase is not the best exchange in Canada. Like ShakePay, it’s ideal for starters. And if we include Coinbase Pro, it might rank among the top five.
Coinbase doesn’t need to change much to stand above the competition, except for fees and customer support. Feature-wise, it’s on its way to becoming the next Binance. So if you want to do NFTs, staking, or coin tracking, keep an eye on the updates.