Coinbase Exchange: The Leading Cryptocurrency Exchange of 2023
Coinbase is one of the most popular crypto exchanges in the world, second only to Binance based on CoinMarketCap’s Web Traffic Factor. Headquartered in San Francisco, Coinbase provides access to cryptocurrencies to millions of crypto enthusiasts across the United States and around the world.
Coinbase operates in just over 100 countries, including Austria and Switzerland. Users have access to 93 markets, the majority of which is Bitcoin.
The exchange has grown tremendously in popularity over the past five years, a period in which the platform has undergone major changes to better serve the platform’s customers.
Coinbase – what you should know about this exchange
Coinbase is among the safest crypto trading platforms in the world. The platform operates in 102 countries where users can convert and trade their digital assets. Coinbase lists 3,552 cryptocurrencies, with the 30 most popular coins being tradable. The exchange is regulated by the SEC, ASIC, FCA and many other reputable regulatory bodies around the world.
Table of Contents
Coinbase experiences 2022
Coinbase – what you should know about this exchange
Coinbase Trading Fees
Coinbase compared to other crypto exchanges
What is Coinbase?
Brian Armstrong and Fred Ehrsam founded Coinbase, Inc., the exchange’s parent company, in June 2012. The company was incubated in the startup school of Y Combinator, which is also responsible for big names like Airbnb, Twitch and Dropbox, among others.
Coinbase boasts many achievements, but the most notable is that it was the first regulation-compliant crypto exchange in North America. Coupled with an easy-to-use graphical user interface (GUI) and competitive transaction fees, Coinbase instantly rocketed to the top of the crypto exchange rankings not only in the United States but also in several other countries around the world.
Due to its popularity, Coinbase caught the attention of notable venture capital firms, including Ribbit Capital, Andreessen Horowitz, and the NYSE, to name a few. These VCs have since helped Coinbase raise funds in the region of $540 million.
Today, crypto traders in 102 countries can use Coinbase to buy cryptocurrencies as well as trade digital coins for fiat currency. Coinbase offers a wide range of crypto assets for exchange and trading.
The option of cryptocurrency trading is only available to a handful of countries, most of which are located across Europe. Although Coinbase serves customers in Africa, merchants from the continent can only use the exchange to convert digital currency to fiat or vice versa and digital currency to digital currency.
Coinbase is also involved in the development and support of a stablecoin called USD Coin (USDC). Coinbase is part of a consortium called Centre, which also includes Circle, which is responsible for developing the USDC. While the centre created the core technology and framework for the USDC, Coinbase and Circle issued the coins for crypto processing.
How does Coinbase work?
Coinbase has the strictest policy when it comes to onboarding new users. The KYC (Know Your Customer) process begins in the first instance when you start registering for an account. Before you can proceed with account creation, you must first confirm that you are at least 18 years old.
Next, Coinbase will ask you to verify the email address you provided. After that, you need to provide your phone number, which can be verified by the platform. In short, your details must be tested before you are granted access to Coinbase.
A regular Coinbase account is not checked as closely as an advanced account because of the smaller amount of money. With Coinbase Pro and Coinbase Prime, new users not only have to comply with KYC measures but also with AML (Anti-Money Laundering) guidelines. In order to set up such an account, users are required to provide additional information such as bank statements and other relevant information.
Coinbase accepts deposits in either fiat or digital currency. You can load Bitcoin (BTC) into your Coinbase account or simply link your own private wallet. Alternatively, you can load fiat currency into your Coinbase e-wallet, which can then be used to purchase the desired digital currency.
Coinbase regular accounts come in two tiers. A level 1 account is one where the user has verified the name and email address and accepted the platform’s terms of service. You can only send and receive cryptocurrency with this account.
A Level 2 account means that users have verified their personal information such as age, and country of residence and provided a clear photo of a government-provided ID. This account provides access to digital currency trading.
Important features and additional functions
Coinbase divides its products into three categories. There is ‘Coinbase For Everyone’, ‘Coinbase Pro’ and ‘Coinbase For Businesses’. Coinbase For Everyone is a product aimed at retailers who are mostly beginners.
When you sign up for a regular account, Coinbase offers you cryptocurrency conversion and trading services. But keep in mind that the trading feature is only supported in a handful of countries where Coinbase operates. Coinbase e-money and digital currency wallets, USDC, as well as the ability to make fiat money by learning cryptocurrency, are also accessible with a regular beginner account.
The Coinbase Pro account is ideal for advanced crypto traders. Coinbase Pro account holders buy and sell cryptocurrency in a safe and secure environment. This account is only open to individual traders. For institutional traders, there is Coinbase Prime. Coinbase Prime offers the convenience and security of Coinbase Pro, but in a way that suits institutional crypto traders.
Coinbase For Businesses is a unique concept where Coinbase goes beyond the pure exchange function. In this category, Coinbase offers crypto custody services for businesses, as well as a platform for crypto startups to raise funds for their projects. Additionally, Coinbase facilitates commerce by allowing businesses to accept crypto payments. Effectively, this product category represents a bridge between the new and the old financial ecosystem.
Which cryptocurrencies are tradable on Coinbase?
Coinbase offers 93 markets and you will find all major cryptocurrencies listed. Coinbase currently lists 3,556 crypto assets, 30 of which are actively tradable. These include:
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Compound (COMP)
- Basic Attention Token (BAT)
- Maker (MKR)
- Ripple (XRP)
- … and more.
Supported countries, currencies and payment methods
Coinbase is available in 102 countries across six continents i.e. North and South America, Europe, Asia, Australia and Africa. Some of the main supported countries include:
- United States
- United Kingdom
- … and more.
Coinbase supports fiat currencies from all supported countries. For example, a user in Hong Kong will transact in Hong Kong dollars (HKD), while a user in South Africa can transact in Rand (ZAR).
When it comes to payment methods, Coinbase accepts different options depending on your location. For US customers, these are the payment methods:
- Bank Account (ACH)
- debit card
For customers in Europe, the payment methods are:
- SEPA transfer
- Safe 3D card
- Debit card (for withdrawals only)
- PayPal (only for withdrawals)
How to buy cryptocurrencies on Coinbase
Coinbase users can buy cryptocurrency in five easy steps:
1 Log into your account and go to the “Trade” tab (make sure you have funds in your account).
2 Choose the crypto asset you want to buy and enter the amount.
3 Enter the address of the wallet where you want to store the crypto assets.
4 Specify the payment method to use.
5 Confirm the details of the order and click ‘Buy’.
Coinbase Trading Fees
Coinbase charges a range of fees depending on the account type and the service provided. For regular account holders, Coinbase does not charge any wallet service fees. Coinbase charges 0.50% trading fees for buying and selling cryptocurrencies.
However, the purchase fee may change depending on the payment method used and the buyer’s location. There is a $3.99 fee for debit card purchases in all countries, but credit cards are only allowed for users in Australia (which charges the same amount fee).
For lending operations, i.e. borrowing USD from Coinbase, the platform charges a flat fee of 2%. The same fee amount is charged for cryptocurrency conversion.
For US-based customers, the base rate for all transactions is 4%, with the exception that deposits are fee-free unless made by bank transfer.
Coinbase supports staking, where customers can stake their crypto assets on a third-party proof-of-stake network. For these services, Coinbase takes a commission of 25% of the staking revenue and passes the rest on to the client.
Trading fees apply to Coinbase Pro users, which depend on whether they are takers or makers and also depend on trading volume. At Coinbase, you are a taker when you place an order at the market price and the broker fills the order immediately. In other words, a taker “takes” the price that is available at the time the order is placed.
On the other hand, a maker is a trader whose order is placed at the market price and is not executed immediately. Instead, Coinbase places the order in the order book to await a matching order from other users. Finally, when a suitable order arrives and your order is fulfilled, you are said to have “done” the order. Takers pay between 0.04% and 0.50% in trading fees, while makers’ trading fees range from 0.00% to 0.50%.
Custody fees are billed monthly but on an annual basis, they amount to approximately 50 basis points of the amount held. The custody implementation fee ranges from $0 to $10,000 depending on usage.
As for the limits, deposits into the Coinbase Pro account are unlimited as long as they are digital assets. US dollar transfers are also unlimited on deposits. However, deposits via SEPA/ACH are limited, with limits varying.
Additionally, Coinbase Pro and regular Coinbase account holders cannot withdraw more than $25,000 per day. This applies whether the withdrawal is in fiat currencies or digital assets. However, you may be considered for higher withdrawal limits if you meet certain conditions, such as providing additional personal information, such as proof of residency.
Is Coinbase safe?
Coinbase is one of the safest cryptocurrency trading platforms. Since the exchange started with robust security measures, it has never seen a successful hack.
Security starts from the moment you open an account, especially for Coinbase Pro customers. New users are required to provide documents supporting the personal information provided for KYC processing. Documents required for this process include government-issued IDs and proof of residency. Without the KYC verification, you will not have access to Coinbase’s services.
In addition, all users can set up two-factor authentication (2FA) for their accounts. Coinbase accepts third-party 2FA applications, but only those that are proven in the industry.
Another layer of security that Coinbase implements are ensuring that 98% of customer funds are held in cold storage wallets. In addition, all Coinbase accounts are insured by the FDIC.
Other layers of security include encrypting website traffic, encrypting customer keys and wallets using the AES-256 mechanism, and regular criminal background checks on all Coinbase employees. With this in mind, we are confident that Coinbase is a safe and secure platform for your crypto trading activities.
Is Coinbase Legitimate and Regulated?
Coinbase, Inc. is the parent company of the Coinbase Exchange. It has operating licenses in all US states and all countries where it provides services to users. This means that Coinbase is under the regulatory authority of top financial regulators such as the US Securities and Exchange Commission (SEC), the UK Financial Conduct Authority (FCA), and Australia’s Prudential Regulatory Authority (APRA), to name a few.
As far as legitimacy goes, Coinbase operates to the best standards established in the US and elsewhere. Customer support is excellent, with active phone lines and email addresses manned 24/7 by a friendly customer service team.
The fact that the FDIC has approved Coinbase’s insurance means that the federal agency is satisfied with the authenticity of Coinbase’s transactions. In short, Coinbase checks all the important boxes regarding authenticity.
Coinbase compared to other crypto exchanges
Coinbase is perhaps the best-known and most widely used crypto exchange, especially in the west, but the field is almost overcrowded. There are a few other crypto exchanges that offer great services. These match Coinbase on many levels and their quality of service is highly commendable.
Minimum deposit: $10 (promotion)
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Minimum deposit: $1 (promotion)
User rating: 9.3
Description: Coinbase is one of the first places to make it easy to buy bitcoin and has been a widely trusted exchange in the market ever since.
Payment Methods 3D Secure credit card, debit card, Eurobank account balance, credit card
Minimum deposit: $0 (promotion)
User rating: 8.7
Description: Since 2018, Nexo has strived to bring professional financial services to the world’s digital assets. Harnessing the best of the team’s years of experience in fintech along with the power of blockchain technology, Nexo offers millions of people to harness the value behind their crypto assets to build a new, better financial system.
Coinbase ranks high among the best crypto exchanges. The platform has enabled millions of people to try their hand at crypto trading while enjoying the security and quality of service reminiscent of the old financial industry.
Experienced traders will find Coinbase Pro the ideal platform due to the wide range of services it offers, including account insurance. In addition, the trading platform has a mobile app to facilitate trading on the go.
Since Coinbase offers the best cryptocurrency trading service and security, it is understandable that their fees are slightly higher than the average cryptocurrency exchange. Although there are some inherent risks associated with trading and investing in cryptocurrencies, Coinbase informs users as much as possible to ensure these are carefully considered.
- What services does Coinbase offer?
Coinbase.com offers two main services namely cryptocurrency conversion and cryptocurrency trading. The crypto conversion feature is available in all 102 countries that Coinbase supports. However, crypto trading is accessible in select countries, most of which are in Europe. In Africa, for example, Coinbase does not support crypto trading in any of the supported countries.
- Which is the best Coinbase account for me?
It depends on your trading experience and the amount you are willing to invest. For beginners, a regular Coinbase account is ideal. The registration process is simple and quick, and customers can access a wide range of Coinbase services. In addition, the risk that regular users face is low. However, more advanced traders can open a Coinbase Pro account, which offers advanced crypto trading services.
- Will I have to pay to open an account?
No. Registration for all accounts, except for the institutional version, is free. The only time you need to spend money is when funding your Coinbase wallet to start trading.
- Does Coinbase have withdrawal limits?
Yes. All Level 1 accounts (whether regular or Coinbase Pro) have a $25,000 withdrawal limit. However, customers are free to increase this limit by providing and verifying more information. Information required includes a photo of a valid government-issued ID and proof of residency. Technically, after verifying the details, your account will move to Level 2.
- Is Coinbase Safe?
Yes. Coinbase is one of the most secure, if not the most secure, crypto trading platforms in the industry. The exchange has robust security measures in place, implementation of which begins as early as account registration. Additional layers of security include encrypting web traffic, implementing 2FA and cold storing 98% of customers’ digital assets.