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Coinbase vs. Robinhood: comparing and deciding the better crypto exchange 1

With more individuals getting into cryptocurrency on a daily basis, we’re seeing new exchanges appear. Two highly popular outlets are Coinbase and Robinhood, both specializing in providing low-cost trading solutions to the everyday person.

Coinbase is one of the most popular exchanges to date, with many seeing it as a crypto-trading portal for beginners to learn on while having high liquidity and purchasing options.

Robinhood is traditionally a stock trading app, yet has recently thrown their hat into the ring by offering crypto-trading (with BTC and ETH purchases/sales available to some US states). With both of these exchanges currently dominating this space, you may be wondering which one is best for you.

Both Robinhood and Coinbase provide a wide selection of investment instruments. But the most significant distinctions to consider are fees, investment alternatives, and cryptocurrency features.

In this post, we’ll take a closer side-by-side look at Coinbase vs. Robinhood to see how the two firms compare in terms that matter to customers. Continue reading to learn which method is best for you to convert your US dollars into cryptocurrencies.

Recommended: Coinbase vs. Uphold

Coinbase quick overview

Coinbase is a US-based secure digital currency exchange that also serves as a wallet to keep your money safe and secure. Coinbase was founded in 2012 and now has over 20% of the world’s cryptocurrency trade volume, according to its website.

The service offers a wide range of features, including crypto exchange services, digital storage, cryptocurrency rewards, staking, and more.

Coinbase’s user interface is one of the most beautiful. It’s well designed and simple to use for both novices and investors.

When it comes to trading cryptocurrencies, there are two main types of accounts: the Coinbase standard account and Coinbase Pro. The Standard account enables you to trade, earn crypto rewards, interest rewards, digital storage, and mobile access. You may take advantage of more advanced features like trading APIs, order books, and charting tools with the Coinbase Pro account.

Robinhood quick overview

Robinhood Financial LLC is a California-based brokerage firm that provides commission-free trading via mobile devices. Baiju Bhatt and Vladimir Tenev set out to provide low-cost trading access to ordinary retail investors when they founded Robinhood in 2013.

Robinhood is a popular mobile trading app that helps new investors get started in the market. Robinhood is ideal for traders looking for exposure to multiple asset types (it offers stocks, ETFs, options, cryptocurrencies, and ADRs).

They began offering Bitcoin transactions in 2018, and since then, they’ve added a few more popular digital coins to their platform.

However, Robinhood does not provide access to a broad range of crypto assets, and it does not offer services for institutional traders (as opposed to individuals) or the ability to move cryptocurrencies.

Coinbase is ideal for bitcoin traders who are looking for trading capabilities specifically geared to cryptocurrencies.

Coinbase vs Robinhood comparison chart

Robinhood

Coinbase

Year Established:

Company Type:

Security:

Deposit options:

Fees:

2013

Multi-asset exchange

High

Debit, Credit, ACH, Crypto

0% ($5/month Robinhood Gold)

2012

Crypto exchange

High

Debit, Credit, ACH, Crypto

1.49 – 3.99% (0 – 0.5% Coinbase pro)

Features: Coinbase vs Robinhood

Coinbase

Buy and Sell Crypto

Coinbase is a U.S.-based platform that allows you to buy and sell bitcoin, Ethereum, Litecoin, Bitcoin Cash, and other cryptocurrencies. Aside from that, you may keep track of all of your crypto investments in one location. Coinbase Pro is a separate service offered by Coinbase that lets you to purchase and sell digital currencies for a discounted rate.

Coinbase Pro

You can trade cryptocurrencies with Coinbase Pro. Coinbase Pro is targeted toward institutional and professional investors, and the company also reduces its users’ fees. The pro version of the service comes with extra features in addition to information packs and ability to leverage API’s.

Learn and Earn Crypto

One of the only exchanges we have seen offer free crypto just for learning: When you join Coinbase, you can visit their “Learn and Earn” section to stack your portfolio with free coins. All you do is watch a few videos, answer some questions and you are immediately rewarded with crypto.

 

Robinhood

Portfolio management and access

On Robinhood, you can trade stocks and other assets. You can also buy and sell cryptocurrencies on the app. They also provide a portfolio tracker so you can see how your investments are doing.

Stocks and Funds

You may use the Robinhood mobile app to access the stock market from the convenience of your phone. Robinhood does not charge a commission fee for stock trading.

Options Contract

Robinhood charges no commission fee when you are using options trading.   They also provide a Dashboard for tracking and analysis purposes.

Robinhood Crypto exchange

On Robinhood, you can trade crypto assets like Bitcoin, Ethereum, and Litecoin. They also provide an interface for viewing prices of digital assets around the world in real time.

Gold

The primary difference between Robinhood Gold and its non-Gold sibling is that it offers more data, tools, and features for investors. With Gold, you’ll be able to use four additional premium tools:

  • Bigger Instant Deposits*
  • Professional research from Morningstar
  • Level II market data from Nasdaq
  • Access to margin investing**

Coinbase vs. Robinhood: Supported Currencies

Coinbase offers significantly more cryptocurrencies than Robinhood, with 96 crypto options to choose from, and they’re always adding new ones. In comparison, Robinhood currently supports just seven cryptos.

Investors utilize Robinhood because it allows you to invest in stock, ETFs, and options. Only USD fiat currency is accepted by Robinhood, whereas Coinbase supports USD, EUR, and GBP. Both platforms allow you to purchase fractional amounts of cryptocurrency.

Coinbase vs. Robinhood: Fees

Before you decide what is the best exchange for you, let’s look at the fee structure. The spread and transaction fee generated by the business are two ways it makes money. In Coinbase’s situation, the spread is rather typical and is a markup of 0.5 percent over the stated exchange price of whatever cryptocurrency is traded. Robinhood follows a similar pricing model, although it’s unclear what the spread is.

It gets more complicated (and pricey) when it comes to transaction fees. Coinbase charges a transaction fee based on the greater of its flat-rate fee schedule or a percentage of the transaction, which is determined by the customer’s payment method.

The flat fees vary from $0.99 for a transaction worth $10 or less, to $2.99 for a transaction exceeding $50. The percentage fee for cryptocurrencies bought with a bank account in the United States or money kept in a Coinbase wallet is 1.49 percent. For purchases made with a debit card, the fee is greater.

On the other hand, Robinhood does not charge any fees. It merely makes money on the spread between the buy and sell prices, giving it a clear advantage over the two in terms of price.

Robinhood’s lack of charges for crypto and stock purchases appears to be a better alternative than Coinbase’s expensive fee structure. However, commission-free trading does not equal zero expenses. Robinhood charges a commission on each trade completed by market makers, so you may pay a higher market price for crypto. Robinhood does not publish costs for order flow, unlike Coinbase, making it difficult for investors to determine which platform is less expensive when purchasing cryptocurrency.

Coinbase charges around 4% per trade, which is one of the most expensive rates for crypto exchanges. Your payment method determines the precise cost. Coinbase Pro comes with no additional costs and offers reduced pricing than standard Coinbase.

Security

Both platforms are secure places to buy, sell, and store cryptocurrency.

Coinbase:

  • Authentication process: Coinbase has a two-step verification system. You may validate yourself using the Google Authentication App or by sending an SMS code to your phone. To access your account, you’ll need a case-sensitive passcode.
  • Cold Storage and Crypto vaults: Coinbase’s cold storage keeps 98% of your assets offline.
  • FDIC Insurance: Coinbase, like traditional banks, provides protection through a number of insurance plans. Coinbase has a good reputation in the financial sector and is FDIC insured.
  • Identity Verification: To authenticate your identity on Coinbase, you must submit KYC information. You’ll be required to upload all of your paperwork in order to use the platform.

Robinhood:

  • Authentication process: With SMS and email verification, Robinhood offers a two-factor authentication system.
  • Cold Storage: All of your assets are kept in offline cold storage vaults on Robinhood, which protects them from hackers.
  • FDIC Insurance: You may get insurance valued up to $250,000.
  • Identity Verification: Robinhood only accepts SSNs from US residents with a permanent residence address.

Coinbase, with over $100 billion in user cryptocurrency and never having been the victim of a large heist, is a safe place to store your assets. More than 98 percent of client funds are kept in cold storage, which means they aren’t kept in internet-connected wallets and are therefore not vulnerable to hacking. Coinbase accounts are insured against hacking attacks and any cash balance held in a Coinbase account is FDIC-insured up to $250,000 per customer.

However, keep in mind that Coinbase’s insurance only covers Coinbase-caused breaches. In other words, if your password is stolen and used to access your account, your cryptocurrency may be lost permanently, so be sure to protect it.

Robinhood’s platform has a significant edge over Coinbase in terms of security. Because cryptocurrency cannot be removed from Robinhood accounts, users’ digital assets can never be stolen.

Availability

You can use Coinbase to exchange cash for crypto and store it on the platform’s hosted wallet, or you may move them to your own Coinbase Wallet, which is independent of the app. Coinbase also offers a Pro version with improved functionality for users who want to do more complex things. You can easily deposit coins from your Coinbase hosted or personal wallet using the free Coinbase Pro exchange, then trade them for a significantly reduced fee.

This makes Coinbase a fantastic onramp for new cryptocurrency users, offering them many of the functions cryptocurrencies were designed to provide.

Buying crypto on Robinhood

You can’t send coins out of the app, and you can’t receive them from an external wallet with Robinhood. In fact, your only alternative is to convert your USD into crypto and then back to USD if you wish to profit from any price increase.

However, during a “YouTube fireside chat” with Robinhood’s Vlad Tenev, the company stated that it is working “as quickly as possible” to provide a cryptocurrency wallet that would enable customers to send and receive cryptocurrencies.

Coinbase vs. Robinhood: Ease of Use

Both Coinbase and Robinhood are quite user-friendly, especially for first-time investors. Because Coinbase takes debit or credit card payments, it is somewhat quicker to set up and trade on than Robinhood, which only accepts ACH transfers. The Coinbase mobile app has a better rating than the Robinhood app.

Both sites contain a knowledge base and articles about trading. Coinbase, on the other hand, adds videos and incentives to promote watching short video clips for microtransaction payments.

Customer support through email is available from both firms, but responses aren’t always timely, so whichever platform you use, be patient while awaiting a reply.

Coinbase Pro vs. Robinhood – Deposits and Withdrawals

Robinhood

To deposit money into your Robinhood account, you must first link your bank account and then perform a transfer from the banking section of your account. You’ll be able to enter the deposit amount, look it over, and formally submit the request once you’ve completed that step. Customers are permitted to make up to five deposits each day without exceeding $50,000 per day.

Withdrawing money from Robinhood is straight forward with a low cost as well. 

Customers should keep in mind that because ACH transfers are made, they may take up to 5 business days to become accessible. 

Coinbase

Coinbase Pro customers have the option to deal in FIAT or crypto. For FIAT deposits and withdrawals, Coinbase Pro charges the following fees:

coinbase fees

For the most part, ACH deposits and withdrawals will be the preferred choice for casual traders since there are no fees involved. However, ACH payments and settlements might take up to 5 business days to complete, so clients must decide whether this delay is tolerable.

Coinbase vs. Robinhood: Wallets

The fundamental distinction between the two platforms is that Coinbase is a genuine cryptocurrency exchange with a wide range of wallet choices. You may store cryptocurrencies on the platform’s own hosted wallet, send them to your personal wallet, or send them to any other cryptocurrency wallet of your choosing.

There are several methods to spend your bitcoins through the Coinbase app. If you want to acquire Bitcoin and use it as a currency, for example, this is an excellent choice.

In Robinhood’s case, it’s a purely trading platform for cryptocurrencies. You may trade cryptocurrency via your Robinhood account. Robinhood does not support the sending or receiving of cryptocurrencies to or from external crypto wallets, nor can you spend cryptocurrencies purchased or sold through Robinhood. These features are on their way.

Coinbase is a digital currency exchange that allows you to own and utilize cryptocurrencies. Robinhood is essentially a betting site, allowing you to gamble on the price of Bitcoin but not possess the asset.

So which is better, Robinhood or Coinbase?

Coinbase is widely regarded as the most popular cryptocurrency exchange. When it comes to cryptocurrencies, Coinbase is generally preferred. While its pricing may be bewildering and exorbitant at first, trading on Coinbase Pro following a little expertise can significantly reduce them. Robinhood’s free trading is nice, but it doesn’t compensate for the absence of crypto capabilities (the inability to send and receive coins is its most significant flaw) or the tiny list of cryptocurrencies on which you may invest.

However, if all you care about is speculating on the value of cryptocurrencies — and you have no plan to utilize the coins and tokens you buy — Robinhood could be a better option, since it offers free trades.

If you are open to other suggestions and looking for an exchange that combines the best of both Coinbase and Robinhood, we recommend Uphold. You can buy metals, stocks, crypto and you can move your assets off the device on one of the most trusted exchanges. You can also use a debit card and spend your funds anywhere debit cards are accepted.

Create your Uphold account here

CryptoWhat
CryptoWhat was created in 2015 and has become one of the most trusted and well-respected sources of information on all things crypto. The blog's authors are dedicated to providing clear, concise, and jargon-free explanations of this complex technology, so that everyone can understand it.
By: Patrick Moore
By: Patrick Moore