Coinbase Review – Is it Really the Best Platform? (September 2024)

The Exchange of Choice Among Institutions and Traders Alike

Since its inception in 2012, Coinbase has remained a steadfast presence within the world of digital assets.  During this time, it has evolved from a simple exchange for trading select cryptocurrencies to a clear market leader that has not only undertaken hard-fought battles on behalf of the broader industry but managed to become, arguably, the most trusted platform servicing digital assets.  This is no more evident than having been chosen by Wall Street and government institutions alike as the custodian for billions in assets.

Once just a trading platform, Coinbase now offers a bevy of services that include, but are not limited to, the following:

• Coinbase Commerce
• Coinbase Custody
• Coinbase Earn
• Coinbase NFT Marketplace
• Coinbase Prime
• Coinbase Wallet

If that list isn’t comprehensive enough, the company also has a suite of services tailored toward institutional clientele, an investment arm, and more. Needless to say, Coinbase has become a one-stop-shop that can be relied upon to service nearly any need pertaining to digital assets like cryptocurrencies and NFTs.

In this review, we will provide a brief overview of what it is like to experience the exchange as a retail user, as well as a few of the benefits/drawbacks it affords.

Trust and Importance Within FinTech

Coinbase is a key player in the FinTech sector. It has established itself as such by bridging the gap between traditional finance and the relentless growth of digital assets like Bitcoin.

Notably, it was one of the first major platforms of its kind to go public.  For many, Coinbase’s IPO on the NASDAQ in 2021 sent a statement to the world that the mainstream acceptance of digital assets was officially underway.

Track all markets on TradingView

Its growth over the years has not been solely on the back of retail markets.  Its ability to attract institutional investors continues to be unmatched, with over $180 billion in institutional trading volumes reported as of 2023.  Furthermore, the partnership with BlackRock to provide institutional clients access to crypto markets through Coinbase Prime further demonstrates its leadership in this sector.

While each of the above points speaks to the importance of the company, it is key to recognize that Coinbase made such a path possible, ensuring it gained and retained the trust of its users along the way.  It has managed to do so through the operational transparency required of a public company, in addition to leveraging and continually upgrading state-of-the-art security practices surrounding the safety of its assets under management (AUM).  For example:

• 2FA
• Asset Insurance
• Cold Storage

The only major recurring issue with Coinbase is its uncanny tendency to suffer from server issues during times of high trading activity. It should be noted, though, that these events have never resulted in the loss of funds; rather, they are inconveniences/annoyances.

The bottom line is that Coinbase is the most well-known and trusted exchange in North America for a reason. As the digital asset sector continues to grow, so should the importance and sway of this already influential company.

Exchange Features

Now that we have established Coinbase’s role within the industry, what is it like to use its digital asset trading platform?

Immediately upon entering the platform, users are greeted with their ‘Home’ page.  Here, they will find an overview of their asset balances, timely news, market movements, and quick links to buy/sell and transfer assets.

Then there is the ‘Spot’ market.  While we won’t discuss every single feature available, it is clear that Coinbase has moved beyond trying to appeal solely to casual traders.  The interface one is greeted with when looking to use the Coinbase exchange to trade on spot markets has the ability to toggle between normal and ‘advanced mode’ as can be seen below.

Once activating advanced mode, users gain the ability to not only see order books and use custom buy/sell orders but also access a comprehensive suite of advanced chart analysis tools for technical traders.  For advanced traders, Coinbase also offers robust API access, allowing for algorithmic trading and automated strategies.  Coupled with low-latency execution, Coinbase can accommodate users who require fast, real-time order placement for high-frequency trading.

It is with the advanced mode activated via desktop that we will conduct this review, as it will provide a more comprehensive overview of what the exchange can offer its users.

Note that while users utilizing the platform’s normal mode will default to their ‘home’ page upon logging in, those with advanced mode activated will be greeted with the spot market.

Moving beyond the Spot Market, there are headings for each of the following.

• Derivatives
• Portfolio
• Orders
• API
• Earn
• More…

While expanding upon each of these is beyond the scope of this review, users can trust that, whatever their needs, Coinbase should have them covered.

Interface

The interface itself is fairly fixed relative to certain top rivals (e.g., Kraken), which can be highly customized. This means that you do not have the same freedom to move boxes around to your liking. The chart, order book, market data, etc., exist where Coinbase has decided.

It should be noted that, while not fully customizable, the layout you are presented with is logical and easy to navigate, making it ideal for newer market participants.

Beyond this, the interface can be switched between dark and light modes for those looking to ease eye strain and simplified by deactivating the previously discussed ‘advanced’ mode.

Overall, everything you need is there and easy to find.  While not the absolute best interface, very few will complain about how the exchange is presented and interacted with.

Funding Your Coinbase Account

Before trading on Coinbase, one must first fund their account with either a supported digital asset or FIAT currency.  With Coinbase operating on a near-global scale, it is unsurprising to see that it supports a large pool of FIAT currencies, making accessibility to digital assets better than ever before.

For example, if a user wishes to fund their account with Bitcoin (BTC) from another wallet so that they can begin trading, follow the steps below.

1. Click Transfer
2. Search for and choose a network
3. Choose a main chain or L2 protocol if supported[1].
4. Provide the sender with the receiving address given.

To fund one’s account with FIAT, Coinbase supports debit cards, instant bank transfers, PayPal, Wire Transfers, and even E-Transfers in select markets.  This process can be completed with a few simple prompts.  To learn more about this process, CLICK HERE.

Note that, depending on the level of account verification, deposit and withdrawal amount limitations will vary.  Make sure to verify the details of your account before doing either.

[1]The Lightning Network is a Layer-2 protocol built to enable near-instant transactions with extremely cheap fees.  It has long been regarded as the best option to scale the Bitcoin network as its usage continues to grow.

Spot Market Trading

Once your account is funded, you should be ready to trade.  Depending on your needs, this process ranges from extremely simple to moderately complex.  The following step-by-step look at what this process can entail when accessing spot markets[2]:

1. Choose the Trading Pair

At the top left, you’ll see BTC-USDC.  This is your current trading pair (Bitcoin to USDC).

You can change this by clicking on it and selecting other cryptocurrency pairs like BTC-USD, ETH-USD, etc.

2. Check the Price Chart

The large chart in the center shows the price movement of your selected trading pair over time.  You can change the time interval (e.g., 5m, 15m, 1H, etc.) to see different time frames of price movement.

Green bars indicate upward price movement (buying), while red bars indicate downward price movement (selling).

3. Choose Order Type (Limit, Market, Stop Limit)

On the right-hand side, under “Buy” or “Sell,” you’ll see options to place different types of orders.

Limit Order: You set a specific price at which you want to buy or sell. The trade will only execute when the market reaches that price.

Market Order: You buy or sell at the current market price.

Stop Limit: Used to set a price threshold; once that price is reached, a limit order is placed automatically.

4. Set Your Price (For Limit Orders)

If you’re placing a Limit Order, you need to enter your desired Limit Price.

You can click BID or ASK prices to fill this in automatically based on the current market.

5. Enter the Amount of Crypto to Buy or Sell

Below the price section, you’ll see a box where you can enter the amount of crypto you wish to buy or sell. You can manually enter an amount or use the percentages (25%, 50%, MAX) to fill in a portion of your balance automatically.

6. Choose Payment Method

Under “Pay With,” you can select the currency you will use to pay (in this case, USDC). It will also show if you have funds in USD or other currencies.

7. Review Execution Options

You can choose between “Allow Taker” or other execution options.  Takers buy/sell at the current market price, while Makers set limit orders, which may not be filled immediately.

Under Time in Force, select how long your order will remain open.  “Good Til Cancelled” means the order stays open until it’s filled or manually canceled.

8. Check Fees and Total

Before you place the order, check the Fee and Total at the bottom right.  Fees depend on the size of your trade and the type of order you choose (market orders tend to have higher fees than limit orders).

9. Place Your Order

After entering the necessary information, click the “Add funds to continue” button if your account balance is insufficient.  Otherwise, click the appropriate button to place your buy or sell order.

10. Monitor Your Order

Once placed, you can track your order under the “Orders” tab or look at your past trading history below the chart.

You can also view other market participants’ orders in the Order Book.

For users who prefer trading on the go, Coinbase’s mobile app mirrors the desktop experience with a user-friendly interface, allowing for easy access to spot markets, order books, and advanced charting tools. When completed on mobile, this process looks as follows.

With Coinbase, users can rest assured that they will be able to access very liquid markets boasting deep order books – meaning there will almost never be an issue finding a buyer/seller and that large orders will not easily crash the in-exchange market.  For most traders, participating in the spot-market is where you will spend most of your time.  With that being the case, it is unsurprisingly fitted with all the features one would need and is easy to understand and use.

[2]This is the standard spot trading interface where users can buy and sell cryptocurrencies at the current market price or set limit/stop orders. Spot trading refers to the direct purchase or sale of crypto assets for immediate delivery.

Fees

Unless you have opted for a subscription to ‘Coinbase One’ (more on that later), the exchange’s fee structure appears intentionally vague and opaque outside of the United States.  Most of the links to fee pages are inaccessible or simply state that ‘fees may apply.’

For users relying on the ‘basic’ interface, be mindful that Coinbase includes a spread in quoted prices.

Trading Fees

Things are much clearer for those residing within the United States, with spot markets subject to the following.

While slightly higher than its primary competitors, like Kraken, Coinbase does well to remain competitive.  Realistically, traders that can expect to be noticeably affected by the difference in fees are those that are moving large volumes, and in that situation, they should consider using Coinbase One instead.

Funding and Withdrawal Fees

Funding and withdrawing digital assets incur standard network fees.  However, FIAT withdrawal fees are harder to pin down.  During testing, the platform experienced issues, and Coinbase representatives could not provide clear information on fees, stating that they are “dynamic” and depend on several factors.

Unfortunately, this lack of transparency in withdrawal fees, especially for non-U.S. users, remains a drawback.  While FIAT deposits are free, users are left in the dark regarding withdrawal costs until they attempt a transaction.

Customer Support

Coinbase offers decent customer support.  It has a well-populated help center, a virtual assistant for basic questions, and the option to speak with a live agent.  However, there are some issues, particularly for users outside the United States.  Some links throughout the website to contact support lead to dead ends, and the process for resolving issues can be unclear in some circumstances.  For example, Coinbase was unable to confirm withdrawal fees for CAD and the exchange was not showing BTC-CAD markets – customer support was unable to provide an answer or solution to either.

Overall, while Coinbase offers a robust help center, its customer support could use improvement in markets outside of the U.S.

Security and Compliance

Coinbase has built its reputation on being one of the most secure cryptocurrency exchanges in the industry.  The platform is fully compliant with U.S. regulations, being one of the first exchanges to register with the Securities and Exchange Commission (SEC) as a public company.  Coinbase employs several state-of-the-art security practices to protect user funds:

• Two-Factor Authentication (2FA): Users are required to enable 2FA via SMS or authenticator apps, providing an additional layer of protection.
• Cold Storage: The majority of user assets are stored in offline cold storage, away from potential cyber threats.
• Insurance Coverage: Coinbase insures digital assets held on its platform, providing additional peace of mind to users in the event of security breaches.
• Regulatory Oversight: As a publicly traded company, Coinbase is subject to regular audits, ensuring operational transparency and financial stability.

These security measures ensure that users can trust Coinbase to safeguard their assets while complying with international regulations.

Ancillary Services

As previously mentioned, Coinbase offers a variety of services beyond its functioning as an exchange for digital assets.  Naturally, these are each complimentary to its core operations, providing further functionality to those that require it.  The following are two examples of these services.

Coinbase One

Coinbase One is a subscription service built with the goal of enhancing the trading experience for high-volume users of Coinbase.  The service offers several key benefits:

1. Zero Trading Fees: Subscribers enjoy zero fees on simple trades up to a cap of $10,000 in monthly trading volume.  However, regular spread fees still apply, and Advanced Trades do not qualify for fee waivers.
2. Priority Support: Coinbase One members receive 24/7 priority customer support, which includes a dedicated support team accessible via phone or live chat and offering faster response times than standard support.
3. Boosted Staking Rewards: Subscribers can earn higher staking rewards on specific cryptocurrencies, maximizing the yield from their holdings.  For instance, ‘boosted’ rewards for assets like USDC can reach up to 5.60% APY on eligible amounts.
4. Account Protection: Coinbase One also provides enhanced security by offering up to $1 million in insurance coverage for losses due to breaches or deficiencies in Coinbase’s systems.
5. Additional Perks: Members also enjoy pre-filled tax forms (Form 8949) for easier tax filing and access to exclusive partner deals and sweepstakes.

This service is best suited for frequent traders who can take advantage of fee savings and desire premium support and additional security measures.  However, the monthly subscription fee may outweigh the benefits for lower-volume traders.

Staking & Rewards

Coinbase allows users to earn rewards through staking, a feature that lets users lock up their cryptocurrency to support blockchain networks and, in return, earn additional tokens.  The following assets are currently supported for staking:

Users can easily stake supported assets directly from their wallets and start earning passive income, with yields varying based on the asset.  In addition, Coinbase has streamlined the staking process for beginners, automatically handling technical aspects like node setup and network participation.

For users in Coinbase One, boosted staking rewards are available, providing higher annual yields for certain assets.  For instance, users can earn up to 5.60% APY on eligible USDC holdings.  Staking on Coinbase offers a seamless, low-risk way for users to grow their portfolios over time.

Final Thoughts

Overall, Coinbase is a polished and versatile exchange that has earned its reputation as one of the most trusted platforms in the cryptocurrency industry.  With a broad range of services catering to both retail and institutional clients, the platform offers everything from simple trading to advanced tools for experienced users and custody solutions for those with large holdings.  Its integration with services like Coinbase Wallet and Coinbase Prime makes it a one-stop shop for anyone interested in digital assets.

Coinbase’s commitment to security and regulatory compliance is a major reason for its dominance.  Between 2FA, cold storage, asset insurance, and its public company status, the exchange gives users peace of mind.  Add to that partnerships with financial heavyweights like BlackRock, and it’s easy to see why Coinbase is the go-to platform for institutions and retail traders alike.

With that said, Coinbase does come with a few notable drawbacks.  The fee structure – especially for users outside the United States – can be vague and frustrating.  While U.S. users have clearer fee information, international users are often left in the dark about withdrawal costs until they’re faced with them. The platform also has a history of server outages during periods of high trading activity, which, while not resulting in loss of funds, can be an annoying inconvenience.  While the help center and virtual assistant are decent, customer support, especially for non-U.S. users, could definitely be more responsive and transparent.

Despite these issues, Coinbase’s pros far outweigh its cons.  It remains the most well-known and trusted exchange in North America – and for good reason. The platform’s ease of use, security, and wide range of services make it a solid choice for both casual users and advanced traders.  While some competitors might offer lower fees or more customizable features, few can match Coinbase’s reliability, credibility, and institutional backing.

In short, if you’re looking for a dependable, all-in-one platform to handle your crypto needs, Coinbase is hard to beat.

Visit Coinbase →