Liquidity

When choosing a cryptocurrency exchange, it's important that the exchange has plenty of liquidity for trading. Otherwise, currency spreads can be wide, which makes trading expensive.

Coinbase is a very large exchange that has plenty of liquidity, so wide spreads should not be a concern. Liquidity also means that you'll be able to conduct large transactions without any issues.

Just how big is Coinbase? As of writing, it has exchanged $150B+ in cryptocurrencies and has 35M+ users worldwide. Try Coinbase and get $5 of free Bitcoin after buying or selling at least $100 of crypto.

Wallet

Like other crypto exchanges, Coinbase offers a digital wallet for storing your digital assets yourself. With the Coinbase Wallet, you can keep all of your crypto on your own device.

The Coinbase Wallet apps are decentralized and are available on both the Apple App Store and the Google Play store. They adhere to the highest security measures including Secure Enclave and biometric authentication technology.

USD Coin

Coinbase users can also use the exchange to buy USD coin. USD Coin is a "stablecoin," which means that if you have a US bank account, you can always redeem 1 USDC for US $1.00.

Each of the USD Coin that is available for purchase on Coinbase is backed by actual US dollars and can be stored in Coinbase Wallet or any digital wallet that it compatible with Ethereum.

Also, verified Level 2 Coinbase accountholders can earn rewards on the UDSC that they hold. At launch, USD Coin Rewards offered a 1.25% APY, but has since dropped to 0.15%. Compare Coinbase Rewards with other top crypto savings accounts.

Coinbase Pro

Coinbase Pro is a trading platform for those who trade often. Pro has a larger base of assets than the regular platform. Currently, there are over 50 assets. You'll also get better rates for trading higher volumes. Coinbase Pro is restricted to certain geographies, which you can see here.

Are There Any Fees?

Yes, you'll pay a spread fee of 0.5% plus a transaction fee for each cryptocurrency buy/sell. The fee schedule is as follows:

  • Total transaction amount is less than or equal to $10 - $0.99 | €0,99 | £0,99
  • Total transaction amount is more than $10 but less than or equal to $25 - $1.49 | €1,49 | £1,49
  • Total transaction amount is more than $25 but less than or equal to $50 - $1.99 | €1,99 | £1,99
  • Total transaction amount is more than $50 but less than or equal to $200 - $2.99 | €2,99 | £2,99

Additionally, wire transfers are $10 incoming and $25 outgoing.

How Do I Open An Account?

After filling out the initial signup form on Coinbase.com, you'll be sent a verification email. Next, you'll be asked to identify yourself as an "Individual" or "Business." You'll also need to provide your phone number if you'd like to set up 2-factor authentification.

Coinbase will ask you to verify your identity, using a driver's license, photo ID, or passport. Finally, you'll need to link a form of payment, such as a bank account, debit card or credit card.

Is My Money Safe?

Cryptocurrency exchanges are often a top target for hackers. However, Coinbase prides itself on being one of the few exchanges that has never been hacked. And they say that hold less than 2% of their customer's funds online.

In Coinbase did suffer a breach of its own physical security or cyber security, it does have an insurance policy in place to cover any losses. Additionally, your USD wallet is covered up to $250,000 by FDIC Insurance. However, neither of these insurance types would cover losses related to a compromise of your own individual Coinbase account which is why it's imperative to use a strong password and restrict access to your login credentials.

Coinbase allows you to use 2-step verification when logging into your account and depositing/withdrawing money. Its Universal 2nd Factor (U2F) works with a security key or Time-based One Time Password (TOTP) through a mobile authenticator app, such as Duo or Google Authenticator.

Note that Coinbase is a custodial service. This means you don't have direct access to your funds stored there or the associated private keys. Keep in mind that Coinbase can and has frozen user accounts without prior notice, although this has only happened in extreme cases.

Is It Worth It?

Due to the high volatility of cryptocurrency, crypto investing won't be for everyone. If big up and down swings really raise your blood pressure, you might want to stay away from Coinbase or any other cryptocurrency exchange.

Even for those who have a strong tolerance for volatility, crypto holdings should still only represent a small percentage of a well-diversified investing portfolio (preferably less than 5%).

But if you are someone who wants to use a portion of your investing money to dabble in crypto trading, Coinbase is one of the best places to do so. It offers high liquidity, a wide variety of products, a strong security track record, and ranks #2 on our list of the top 10 Bitcoin and crypto investing sites.