Coinbase vs. Robinhood – Forbes Advisor

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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 main differences and similarities between Coinbase and Robinhood.

Coinbase vs. Robinhood: Similarities

Coinbase and Robinhood let you quickly start trading the most popular cryptocurrencies, like Bitcoin (BTC), Ethereum (ETH) and Dogecoin (DOGE).

Both exchanges are relatively user-friendly, making it easy to create an account, pair a payment method, and star crypto trading. They also both offer extensive libraries of educational articles to teach people the basics of investing.

When it comes to customer service, Robinhood and Coinbase offer phone support. Coinbase’s phone service is more user-friendly as they list their phone number, while Robinhood asks users to request a callback from the app.

Security is key to protecting your crypto investment. Coinbase and Robinhood have targets on their backs and have been subject to hacks.

In a breach in 2021, criminals stole cryptocurrency from around 6,000 Coinbase customers. Coinbase refunded these customers.

Robinhood was also hacked last year, but only lost customer data such as email addresses and contact information, not investments. In response, both companies have taken steps to improve security measures.

Coinbase vs. Robinhood: Differences

Coinbase and Robin Hood serve very different markets, which means that there are significant differences in the cryptocurrency investment options offered by each platform.

Selection of cryptocurrency

Coinbase offers many more cryptocurrencies than Robinhood. With the latter, your investment selection is limited to just 17 coins, while Coinbase offers over 150 coins.

This is something to consider if you are looking to trade cryptos other than the traditional core cryptos, such as gimbal (ADA), Ethereum (ETH), Polygon (MATIC) and USD Coin (USDC), to name a few.

Crypto wallets

Coinbase provides its own crypto wallet and also allows you to use your own third-party wallet. Storing your crypto in a wallet gives you an extra layer of protection against a hack.

Robinhood announced that it was developing a crypto wallet and started accepting people through a waitlist. They plan to release it to the general public later in 2022.

Other Cryptocurrency Features

Coinbase offers much more advanced features for cryptocurrency investors than Robinhood. For example, it offers a staking program which allows you to earn rewards. You can expect a staking yield of around 3.28% APY for Ethereum and 4% for Solana on Coinbase.

Coinbase also offers an advanced trading platform with more investment and research tools on its large-scale product, Coinbase Pro.

Trading fees

In terms of trading fees, Robinhood can be very attractive. The platform does not charge commissions for buying and selling cryptocurrencies. Instead, Robinhood makes money from something called order flow payment.

For crypto investors on a budget, commission-free trades are an attractive offer.

In contrast, the fees for Coinbase are higher than crypto exchanges like KuCoin Where Binance.FR. The fee for their basic platform is around 0.5% of your transaction. On Coinbase’s advanced platform, investors trading less than $10,000 in a 30-day period would pay taker and maker fees of 0.6% and 0.4%, respectively.

Investments beyond cryptocurrency

Robinhood was founded as a stock trading app and only later got into cryptocurrency. The platform allows you to invest in conventional assets like stocks, exchange-traded funds (AND F) and options.
Coinbase specializes only in cryptocurrencies. They offer derivatives trading for crypto and other assets like oil, but there is no access to investments like 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 provide a range of services such as staking, an advanced trading platform, and a crypto wallet. This is a good choice if you want a wide variety of tokens but still want an easy to use exchange.

Coinbase is a good option for beginners looking to get serious about crypto trading. It offers solid customer service and training courses, which pay out crypto rewards as you complete them. You can learn while building your portfolio at the same time.

The main downside of using Coinbase is the high trading fees. Their fee structure is also difficult to understand, which means you may not know how much you will pay until you create a transaction.

If you plan to trade frequently, you may prefer a lower cost option. Also, if you plan to stick with buying and selling popular coins, Robinhood might be a better deal with their commission-free trading.

Advantages of Coinbase:

  • Excellent selection of cryptocurrencies
  • Variety of services like staking, advanced trading platform and crypto wallet
  • 24/7 telephone support
  • Quality teaching materials

Disadvantages of Coinbase:

  • High trading fees
  • Complicated pricing structure
  • Recent security breach

Who should choose Robinhood?

If you only want to buy and sell cryptocurrency as an investment and plan to stick with the most common tokens, Robinhood is a good choice. Its trading app is extremely easy to use and does not charge commissions.

You can buy cryptocurrencies without paying any additional fees. Since Robinhood is also an investment broker, you can buy other investments, like stocks, ETFs, and options.

However, Robinhood does not specialize in cryptocurrency trading. Therefore, its functionality is limited.
Another downside is that Robinhood does not allow you to withdraw your tokens directly to an outside wallet.

You must first sell and convert to cash before making a withdrawal. They are developing a wallet for this, but it won’t be released until late 2022.

Benefits of Robinhood

  • No commissions or fees on crypto trading
  • Provides other investments like stocks, ETFs and options
  • Easy to use investment app

Disadvantages of Robinhood

  • Limited selection of cryptocurrency
  • Unable to withdraw crypto, you must withdraw cash first
  • No features like staking
  • No advanced trading platform

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