Coinbase vs Robinhood – Forbes Advisor
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Coinbase and Robinhood are two of the biggest names in crypto. But which one offers the best crypto trading platform?
To help you decide, let’s take a closer look at the key differences and similarities between Coinbase and Robinhood.
Coinbase vs Robinhood: Similarities
Coinbase and Robinhood allow you to quickly start trading the most popular cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and Dogecoin (DOGE).
Both exchanges are relatively user-friendly, making it easy to set up an account, link a payment method, and star trading crypto. They both also provide extensive libraries of educational articles to teach people the basics of investing.
When it comes to customer service, Robinhood and Coinbase provide phone support. Phone service on Coinbase is more customer-friendly because they actually list their phone number, while Robinhood requires users to request a callback from the app.
Security is the key to the safety of your crypto investments. Coinbase and Robinhood have targets on their backs and have been hacked.
In the 2021 breach, criminals stole cryptocurrency from nearly 6,000 Coinbase customers. Coinbase reimbursed these customers.
Robinhood was also hacked last year, but only lost customer data like email addresses and contact information, not investments. In response, both companies have taken steps to improve security measures.
Coinbase vs Robinhood: The Differences
Coinbase and Robinhood serve very different markets, and this means there are material differences in the cryptocurrency investment options offered by each platform.
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Coinbase offers many more cryptocurrencies than Robinhood. With the latter, your investment selection is limited to just 17 cryptos, while Coinbase offers over 150 cryptos.
This is something to consider if you want to trade cryptos other than other mainstream cryptos such as Cardano (ADA), Ethereum (ETH), Polygon (Matic) and USD Coin (USDC).
Coinbase offers its own crypto wallet and lets you use your own third party wallet. Storing your crypto in a wallet gives you an extra layer of protection from hacks.
Robinhood has announced that they are developing a crypto wallet and have started accepting people via waiting lists. They plan to release it to the general public later in 2022.
Other Cryptocurrency Features
Coinbase offers far more advanced features for cryptocurrency investors than Robinhood. For example, it offers a wagering program that lets you earn rewards. You can expect a staking yield of around 3.28% APY for Ethereum and 4% for Solana on Coinbase.
Coinbase also provides an advanced trading platform with more investment tools and research on its advanced product Coinbase Pro.
In terms of trading fees, Robinhood can be very attractive. The platform does not charge any commission for buying and selling cryptocurrencies. Instead, Robinhood makes money through something called Pay for Order Flow.
For crypto investors on a budget, zero-commission trading is a lucrative deal.
In contrast, Coinbase’s fees are higher than crypto exchanges like KuCoin or Binance.US. Their basic platform charges around 0.5% of your transaction. On Coinbase’s advanced platform, investors trading less than $10,000 in a 30-day period will pay taker and maker fees of 0.6% and 0.4%, respectively.
Investing Beyond Cryptocurrency
Robinhood was founded as a stock trading app, and later only got into cryptocurrency. The platform allows you to invest in traditional assets such as stocks, exchange-traded funds (ETFs) and options.
Coinbase only specializes in cryptocurrencies. They offer derivatives trading for crypto and other assets such as oil, but do not have access to investments such as stocks, bonds or ETFs.
Who should choose Coinbase?
Everything you need as a crypto investor is available on Coinbase.
This crypto exchange combines a wide range of cryptocurrency investment features with a user-friendly platform. They offer a range of services such as staking, an advanced trading platform, and a crypto wallet. This is a great option if you want a large number of tokens but still want an exchange that is easy to use.
Coinbase is a good option for beginners looking to get serious about crypto trading. It offers solid customer service and training courses, which pay on completing crypto rewards. You can learn while building your portfolio at the same time.
The main drawback of using Coinbase is the high trading fees. Their fee structure is also difficult to understand, which means you can’t know exactly how much you’ll pay until you set up a trade.
If you plan to trade frequently, you may be better off with a lower-cost option. Also, if you plan to buy and sell popular coins, Robinhood may be a better deal with their zero-commission trades.
- Excellent selection of cryptocurrencies
- Variety of services like staking, an advanced trading platform and a crypto wallet
- 24/7 phone support
- quality educational material
- high trading fees
- complex fee structure
- Recent security breach
Who should choose Robinhood?
If you only want to buy and sell cryptocurrency as an investment and plan to stick to the most mainstream tokens, Robinhood is a good choice. Its trading app is extremely easy to use, and does not charge commissions.
You can buy cryptocurrencies at no extra charge. Since Robinhood is also an investment broker, you can buy other investments such as stocks, ETFs and options.
However, Robinhood is not an expert in cryptocurrency trading. As a result, its features are limited.
Another drawback is that Robinhood does not allow you to withdraw your tokens directly to an external wallet.
You need to first sell and convert to cash before making a withdrawal. They are developing a wallet for this purpose, but it won’t be finished until the end of 2022.
- No commissions or fees on crypto trading
- Offers other investments like stocks, ETFs and options
- easy-to-use investment app
- Limited cryptocurrency selection
- Cannot withdraw crypto, you must cash out first
- no staking facility
- No advanced trading platform