Coinbase Review 2022- Is This Crypto Exchange For You?

About Coinbase

Coinbase is a popular cryptocurrency exchange headquartered in the U.S. that allows users to buy, sell, and trade crypto. With over 160 coins to choose from, an easy-to-use trading platform, and educational tools for crypto newcomers, Coinbase is one of the best crypto exchanges for beginners.

Coinbase was founded by Brian Armstrong and Fred Ehrsam in 2012, designed to create a safe way for Bitcoin traders to buy, sell, and trade crypto. Over time, the platform added other cryptocurrencies, and has since become one of the largest crypto exchanges in the world by trade volume. Coinbase is available in over 100 countries around the globe, including 49 U.S. states (not available in Hawaii).

Key Features of Coinbase

Coinbase offers a lot of features to new and advanced crypto traders alike. While its platform is aimed at new investors, its new Advanced Trading platform and white-glove services make it a decent option for active traders and institutions as well. Here are a few of the stand-out features on Coinbase:

Coinbase Trading Platform

Coinbase offers one of the simplest trading platforms on any crypto exchange, making it a great option for beginner investors. New investors can quickly transfer fiat currency (such as U.S. dollar) or crypto onto the platform, and trade for other crypto. There is a simple “buy/sell/convert” option in the trade window, and users can quickly place an order to execute a trade.

Coinbase has also introduced an “Advanced Trading” window to select customers, which offers advanced charting tools, limit orders, and live order books. While this feature is still being rolled out, it offers much lower fees (starting at 0.50%) than standard Coinbase transactions.

Coinbase Earn

Coinbase offers a unique program that teaches you about certain crypto projects, and allows you to earn that cryptocurrency in return. You can watch quick video clips to learn about a particular project, and then take a quiz to see what you learned. Users who pass the quiz may then end up earning some of the token you just learned about. 

This is a neat way for new users to learn about a particular project, as well as become invested by earning a reward for learning.

Coinbase Staking

Coinbase allows you to stake certain cryptocurrencies and earn interest for locking in your crypto for a certain period of time. This is available for certain Proof of Stake blockchains, including Ethereum (2.0) and Cosmos (ATOM). Although the list of participating cryptocurrencies is short (currently six tokens), you can earn up to 5.0% interest in some cases, generating passive income for locking in your tokens on the blockchain.

Coinbase Security

Coinbase offers top-notch security for users, including cold storage and crypto vaults, FDIC insurance on cash deposits, two-factor authentication, and biometric access on mobile apps. Coinbase also has crime insurance to protect a portion of your funds from criminal activity, although it does not protect against unauthorized access to your personal account.

Coinbase also secures its funds in geographically distributed offline vaults, with multisignature keys required for access, and keys distributed around the globe. Both your personal data and crypto storage servers are AES-256 encrypted, which is the same level of encryption banks use to secure their networks.

Coinbase Institutional Services

Coinbase offers institutional investing services, including an over-the-counter (OTC) trade desk, advanced trading tools and APIs, as well as a dedicated support team. Coinbase has worked with some of the largest companies in the world that invest in crypto, including Tesla, Microstrategy, and Grayscale.

There are several offerings for institutional users, including:

  • Coinbase Prime. Turnkey service that offers access to an institutional-grade brokerage, secure asset storage, and high-touch support around the globe.
  • Coinbase Institutional. Bespoke crypto managed service that offers customized tools and plans for financial institutions, institutional investors, and private clients.
  • Coinbase Custody. A secure, insured custody service for digital assets in cold storage vaults. Aimed at clients with large crypto balances, clients can still gain access to use funds for staking and governance with offline staking.
  • API Connectivity. Institutional customers can gain direct access to Coinbase through secure APIs for customer trading and FinTech solutions. 

Advantages of Coinbase

It’s no secret, Coinbase is one of the most popular crypto exchanges in the world for a reason. Coinbase has onboarded more than 70 million customers, and continues to be one of the top exchanges by volume in the world. Its world-class security, elegant design, and focus on education has helped it continue to grow. 

Here are a few advantages to using Coinbase as your crypto exchange:

1. Simple Trading Platform

Coinbase offers one of the most intuitive trading platforms available, especially for those just dipping their toes into cryptocurrency. Its quick, secure sign-up process helps you secure your accounts and transfer funds onto the platform. 

It’s simple trading interface helps you buy and sell Bitcoin and other cryptocurrency with ease, and the newly integrated advanced trading mode helps active traders manage their crypto trading simply. 

Coinbase is one of the best trading platforms for beginners, and continues to make it easy.

2. User Education

Although many crypto exchanges offer blogs and help articles to educate consumers about cryptocurrency, Coinbase takes it a step further by offering interactive educational content. 

The Coinbase Learn platform allows users to quickly learn about a crypto project with short videos and quizzes, earning rewards along the way. This is one of the best ways for users to understand complex cryptocurrencies in a short amount of time and become invested in a project with rewards of each token.

3. Institutional Trading

As mentioned above, Coinbase is the go-to platform for large institutional investors, including Tesla and Microstrategy. The white-glove service and wide array of custom solutions make Coinbase one of the most business-friendly crypto exchanges available today.

4. Crypto Selection

Coinbase is continually adding to its list of available cryptocurrencies, with over 160 coins to select from. This includes most of the top traded coins, as well as some smaller projects that are gaining notoriety.

5. Secure Platform

Whether you are a regular user or an institutional trader, Coinbase offers top-notch security across all aspects of the platform. From cold storage for a majority of customer assets, to multisignature encrypted servers, and even FDIC insurance on cash deposits, Coinbase is one of the safest places to buy and sell crypto on the planet.

Disadvantages of Coinbase

While Coinbase is one of the best places for beginners to learn about crypto and begin trading, it also comes with a few drawbacks. Its fee structure, limited trading tools, and customer service woes may make some users think twice about using the platform. 

Here are a few disadvantages to using Coinbase over another crypto trading platform:

1. High Fees

Coinbase charges some of the highest transaction fees in the market, with a 1.49% fee to buy or sell crypto. Users who use a debit or credit card to purchase are charged 3.99% per transaction. 

Although the new “Advanced Trading” offering being rolled out offers lower fees, some competitors offer far lower fees than Coinbase, such as Binance with 0.1% trading fees. High-volume traders and regular investors may be overpaying with Coinbase.

2. No Leveraged Trading

Although Coinbase does offer an advanced trading platform with Coinbase Pro and its new “Advanced Trading” mode on the regular platform, users cannot access margin or futures trading with leverage. 

After some regulatory guidance from the Commodity Futures Trading Commission (CFTC), Coinbase stopped offering margin trading in 2020, and has not even hinted at relaunching the service. 

For advanced traders who want access to margin and futures trading, there are other exchanges that offer this service (such as Kraken).

3. Platform Outages During Market Volatility

Although Coinbase offers a robust infrastructure and supports some of the biggest trading accounts in the world, when there is massive volatility in the market, Coinbase has been known to have reduced functionality, or to go offline. While it seems to be a victim of its own success, this may be concerning for high-volume traders.

How Coinbase Stacks Up

Coinbase is a great crypto exchange, and continues to offer a high-quality experience for both new investors and institutional traders alike. That being said, it is limited in some of its trading tools, and charges higher fees than some competitors.

FTX is a large crypto exchange based in the Cayman islands, and it offers a huge selection of crypto, as well as advanced trading features such as derivatives, futures, and leveraged token trading. It also offers rock-bottom fees, especially for high-volume traders.

Here’s how Coinbase compares to FTX, another large crypto exchange:

Coinbase FTX
Fees Standard trading: 1.49% to 3.99% Advanced trading: 0.00% to 0.50%  Maker-Taker: 0.020% to 0.070%
Number of Cryptocurrencies 160+ 300+
Trading Features Simple and advanced charting, simple order form, mobile trading, recurring purchases Advanced charting, leveraged trading, derivative products, stock trading, volatility products, mobile trading, recurring purchases
Security Features Cold storage, two-factor authentication, FDIC insurance, crime insurance, AES-256 encryption Cold storage, two-factor authentication, FDIC insurance, crime insurance, withdrawal lock, whitelisting

Final Word

Coinbase is one of the best overall exchanges for new crypto investors, as well as for institutional traders who want access to high-quality service and a simplified user experience. Coinbase helps new users learn about crypto, and its trading platform is very user friendly, making it easy to securely buy your first cryptocurrency.

That being said, Coinbase is not for everyone, and its high fees and limited trading options for advanced users may be restrictive and expensive. Coinbase is also very selective about which coins it lists, which means it may not carry your favorite altcoin or new crypto project.

Bottom line: Coinbase is a solid crypto exchange for beginners, as well as institutions that want to add crypto to their balance sheet.

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