As cryptocurrencies continue to grow in popularity and attract more investors, a lot new crypto players are facing a decision: Coinbase vs. Robinhood?
Coinbase and Robinhood are both behemoths in the crypto trading world. Robinhood just introduced crypto trading in 2018 while Coinbase is a cryptocurrency exchange. Which crypto trading platform is better?
Well, it depends on the factor that is most important to you. There are several factors to keep in mind: costs, number of cryptocurrencies supported, overall potential, funding options, customer support, control, and transparency.
Coinbase offers Coinbase Pro, which is designed for more advanced traders, while Robinhood Crypto is a more limited platform, but is easy to use. They also have a subscription service called Robinhood Gold which allows for margin trading.
Coinbase and Robinhood both offer a mobile app and desktop app for users to buy or sell cryptocurrencies. But what makes them different?
Coinbase is a cryptocurrency exchange where actual crypto exchanges take place while Robinhood lets users trade a select amount of cryptos on their app. But which should YOU use?
Focus on these factors when making your decision:
Coinbase and Robinhood: Pros and Cons:
Robinhood is a trading platform that many use to buy and sell ETFs, securities and stocks. But recently they added the option to buy and sell cryptocurrencies. While they aren't a traditional cryptocurrency platform, they do offer 7 coins for investors.
Coinbase can be a good platform for beginners. However, the complex fees and limited amount of altcoins often sends users to popular competitors, like Gemini, who has a much easier fee structure.
Coinbase vs. Robinhood: Fees
When it comes to fees, Robinhood is the run-away winner. Robinhood, after all, is a free trading platform, not just for stocks and ETFs. Robinhood is well known for not having any commission fees.
It also doesn't charge the typical 0.5% to 4.5% fee other cryptocurrency platforms charge.
Robinhood is 100% free. You are completely free to buy and sell crypto as many times as you want and however much you want. You will never have to worry about charges.
However, Robinhood uses a method called payment for order flow which is a bit controversial. This means that the brokers receive payment for directing the trades to certain market makers.
On the other hand, Coinbase charges depend on the amount of crypto you're buying in US dollars and how you're paying for it. These charges can range from 0.5% to 4.5%.
For instance, if you are going to be buying $100 in Bitcoin using your debit card, you will be charged a 3.99% fee, which translates to a fee of $3.99.
Essentially, Robinhood offers free trades which ,combined with the ease of use of the platform is appealing to new investors to buy cryptocurrency . The fact that they don't offer fees to buy/sell makes them more appealing to new investors compared to a normal cryptocurrency exchange like Coinbase, Kraken or Gemini.
The bottom line when it comes to costs: Robinhood wins compared to Coinbase.
This is a no-brainer, but pay attention to the rest of the factors below. Comparing Coinbase vs Robinhood, you might save more money in the long run with Coinbase. This is depending on your trading habits.
If you have trading needs that are more important than upfront commission fees, including real-time trading charts and more altcoins, Coinbase Pro will be a better option.
Which Cryptocurrency Exchange Offers More Crypto Options?
The world of cryptocurrency changes very quickly. Bitcoin may be hot today, but Ethereum can experience a lot of action the next day. Also, there are fast-rising smaller and lesser-known cryptocurrencies that might overtake either of these in the future.
Given the fact that the cryptocurrency market is still very volatile and influx, you need a lot of flexibility as far as your trading options go. Coinbase gives you this variety. And even if you might not be interested in trading smaller cryptocurrency (altcoins) right now, it's possible you will in the future.
Coinbase covers dozens of cryptocurrencies. Coinbase currently has a long list of cryptos you can trade.
One thing to note is that Coinbase offers Coinbase Pro for more advanced traders, this gives you more access to even more cryptocurrencies and trading pairs.
When trading cryptocurrency with Coinbase Pro users can take advantage of these options to make a trade in real-time for the absolute best price. Trade pairs are optimal for crypto trades between 2 specific cryptocurrencies.
On top of that, it also has a watch list of upcoming potential crypto that could be added to its current mix. It also regularly adds tradeable coins to its system.
Robinhood, on the other hand, has a fixed list of seven cryptocurrencies.
Now, this doesn't necessarily mean that it's going to stay with these seven. It can add some in the future, but when it comes to variety, flexibility, and responsiveness to the number of new cryptos entering the market, the overall winner is Coinbase.
However, it should be noted that there are other crypto exchanges with far more currencies than Coinbase that charge significantly less trading fees.
Coinbase vs Robinhood: Which Crypto Exchange Platform Offers More Earning Potential?
Evaluating the earning potential for new crypto investors is key. But it also depends on how you plan to trade cryptocurrency with the platform you use.
The great thing about Coinbase is that you're able to buy crypto with cash.
You can store it in your hosted wallet on Coinbase. You can trade freely to external wallets, unlike Robinhood.
Robinhood vs Coinbase: Which is better for buying bitcoin?
If you want to go the route of just buying Bitcoin, you might find it easier to stick with Robinhood, especially if you are already use the user friendly platform.
Transferring Crypto with Coinbase Vs. Robinhood
Alternatively, you can send your personal coins to your personal Coinbase wallet. You can do a wallet-to-wallet transfer.
All of this is done securely because it's independent of the Coinbase app. Also, you can do this using the free Coinbase exchange app. You can also trade deposited coins from the Coinbase app for a much-reduced rate.
Contrast this with Robinhood which doesn't allow you to send coins out of your app or to receive coins from any external wallet.
If you want to benefit from any price increases in the crypto you're holding, the only choice you have is to convert your USD into crypto then back to USD.
With Coinbase, you have your very own Coinbase wallet. Coinbase Pro also allows your own wallet to send and receive cryptocurrencies as you please to anyone. This is essential if you really want to get into cryptocurrency trading.
Given this inflexibility of Robinhood, the runaway winner when it comes to income potential, as well as flexibility, is Coinbase.
Which Crypto Platform Is Easier To Purchase From?
Ease of funding forms part of the convenience one might look for when engaging in crypto trade using crypto platforms. Ideally, the more options you have, the better. After all, you don’t want to make it too difficult or limited for clients to send you the money.
Coinbase has more core deposit options with bank transfer, debit card, credit card, and PayPal. These, however, may vary depending on where you are making the deposit.
It is highly recommended to use ACH transfers in the US and SEPA if you are in Europe. Both transfers are free of charge. Coinbase and Robinhood both offer ACH transfers.
On the other hand, Robinhood is only able to accept ACH deposits for now. However, posting such transfers can take up to five working days.
You can connect your bank account to your Coinbase account using credit/debit cards to purchase crypto.
If you plan to mail check deposits, this is only possible if you have an upgraded cash management account. It is where you will set up a direct deposit with Robinhood. Coinbase doesn't require an upgraded account to connect a bank account, you just need to verify your identity with them.
It’s Coinbase that takes the cake here, having more methods available to accept your funds to your Robinhood account.
Which Crypto Platform Is More Transparent?
Transparency is crucial because in the world of cryptocurrency trading, as you probably already know, this industry has a history of exchanges being hacked. The more transparent and secure the system, the more trust investors would have in it. This facilitates a better overall trading environment.
Security features: Coinbase Vs Robinhood
Security features should definitely be one of the most important factors for crypto traders when deciding between Coinbase and Robinhood. You should feel secure knowing that your cryptocurrencies are safe from attackers and hackers.
Some of these features include how your assets are stored, FDIC insurance, and two factor authentications.
Coinbase, Robinhood and many other cryptocurrency platforms both offer many of these security features. The user friendly Robinhood app suggests that people set up 2FA (two factor authentication) for all users.
On the other hand, people buying and selling with Coinbase are forced to have it. This security feature is something that makes Coinbase stand out above Robinhood for safety.
How is your money protected?
Since crypto assets are not legal tender, they are not subject to be FDIC insured however both Robinhood and Coinbase have FDIC Insurance on assets. When a broker is FDIC insured, you know that your funds are safe in case of a data breach or attack.
Coinbase wallets are also FDIC insured while Robinhood Crypto wallets are insured with Aon.
Robinhood sells order flow information to trading firms. This poses a significant mark-up for trading on that platform even though they don't charge any fees. This is known as payment for order flow.
Coinbase, on the other hand does not use payment for order flow. Coinbase matches buy and sell orders immediately and allows users to post orders in their order book. This is all done in real-time.
The order book usually has a spread of a penny, unlike Robinhood. On their website, Coinbase is also very transparent regarding their fee structure.
Both Robinhood and Coinbase use a practice known as "cold storage" meaning the cryptocurrency tokens are stored in a physical, offline location to ensure security of the assets from hackers. Cold storage is the gold standard for any cryptocurrency exchange. Cold storage is very important to investors, they like the security knowing that their assets are stored offline.
However, Robinhood uses a mixture of hot storage (online) as well which means that these funds are possibly vulnerable to attackers. Because of this, people who trade in higher volumes of crypto often feel more comfortable on Coinbase vs Robinhood.
When it comes to transparency, the hands-down winner is of course Coinbase.
The downside to this, unfortunately, is that the fees can get quite expensive.
Which Crypto Platform Has Better Customer Support?
Clients can reach Coinbase and Robinhood through email, but unfortunately, both could use a lot of improvement with their response time.
Coinbase says you can request a call back by sending them an email as well. While Robinhood claims that they are expanding their live agent support, they are limiting it to security issues at the moment.
No winner in this round, unfortunately. Cryptocurrency exchanges and platforms around the board are slacking in this field.
Coinbase and Robinhood: The Conclusion
With every factor being considered, the clear winner between the two is Coinbase (and Coinbase Pro). If you're looking for a tried-and-proven, transparent, and flexible cryptocurrency platform, Coinbase is perfect for that. They are both very trusted companies, but vs Robinhood, Coinbase takes the cake.
Should you use Coinbase or Robinhood?
There is no simple answer though, as everyone has different needs. You need to consider trading volume, supported cryptocurrencies and security features when you are investing in crypto.
If free trading on a mobile app is more your speed, there is no shame in choosing Robinhood. Both are user-friendly platforms and offer customers a wide range of options.
Coinbase is the leading cryptocurrency exchange in the world for a reason. Vs Robinhood, Coinbase will offers more options to you in the long run. In other words, even if you are inexperienced, you might start to learn more about crypto with time.
While many people who are dabbling with Cryptocurrency will probably pick Robinhood when they consider Coinbase vs. Robinhood, once they get the hang of crypto trading, they probably would switch over to Coinbase.