Coinbase Exchange Review: Is It the Right Choice for You?

• Coinbase is listed on the Nasdaq
• It is a broker exchange and a trading platform
• Coinbase is licensed in 46 out of 50 US states & 32 countries
• 350+ crypto-to-crypto pairs are supported & 240+ cryptocurrencies
• Service fees are comparatively high
• Coinbase imposes spending limits

Coinbase is a digital currency exchange that allows you to buy Bitcoin and other digital currencies directly, using crypto or hard currency (fiat).

Coinbase has over $20 billion worth of assets in custody, and more than $50 billion worth of cryptocurrencies have been exchanged since it was established in San Francisco, California, in 2012. In 2021, the cryptocurrency exchange platform recorded a new milestone as the first crypto company to go public through an ICO resulting in a listing on the Nasdaq stock exchange.

Surprisingly, Coinbase has not just one but two primary offerings: a broker exchange and a professional trading platform. You can utilize the two services together or independently. Coinbase has grown to become an industry leader in providing access to the digital asset world.

Coinbase is an exchange with an in-built wallet. It is not recommended to keep your funds on the exchange, as it is the least secure type of wallet. Instead, you’d do better to keep your funds in a hardware wallet, which is the safest kind of crypto custody.

Numerous exchanges are out to defraud you, and their offers will be tempting, so you need to look into a platform’s reputation, before parting with your hard-earned cash.  

Our Coinbase review found the exchange to be as legitimate as it gets. To be able to function in 46 of the 50 US states, it has licenses that correspond to every one of them. This enables Coinbase to operate legally and have professional standards in the way they handle your crypto.

But before you read this Coinbase review, you should know whether you have access to this exchange. This is because the platform’s buy and sell services are limited (only supported in 32 developed countries).

Trusted Cryptocurrencies

Many people use Coinbase as an on-ramp to the crypto market. That’s because Coinbase only offers guaranteed coins such as Bitcoin and doesn’t open access to tokens that could be securities or equities. It currently supports over 240 cryptocurrencies and over 350 crypto-to-crypto trading pairs.

Easy To Use

Coinbase’s extremely user-friendly interface makes it the go-to tool for newbies in the crypto industry. Its clean design provides easy navigation, and all tools are at your fingertips.

Regulatory Compliance

Coinbase adheres to the measures of regulatory bodies including the US Securities Exchange Commission (SEC) and the Financial Crimes Enforcement Network to create a trustworthy reputation and increase credibility. This compliance improves security and offers users protection against fraud and misbehavior.

Educational Resources

Coinbase has a unique feature, ‘Learn to Earn,’ whereby users can take an educational test on cryptocurrencies and get different token amounts as a reward. Overall, this initiative encourages a better understanding of the entire world of cryptocurrencies for newbies.

Fees

Coinbase no longer lists the specific pricing on its pricing and fees page. While the real charges may be as close to the previous Coinbase fees, you only realize the amount deducted upon creating the order. These charges depend on your payment option, the size of your order, and in some instances, general market forces.

For a general estimate, Coinbase has previously charged 1.49% for virtually all their operations, and 3.99% for goods bought using bank cards. As for Coinbase Advanced (for actively trading cryptocurrencies), trading fees begin at 0.60% and decrease according to your trading volume, whether you make a “maker” order or a “taker” order. The trading fees on the advanced interface are competitive and reasonable. The higher your trading volume the lower the fees.

Withdrawal and Deposit Processes

Automated Clearing House (ACH) deposits are available on Fiat at no charge, and USD wire deposits have a fee of $10, while USD wire withdrawals have a fee of $25. SEPA deposits and withdrawals are relatively cheap costing €0.15 for each transfer. Depending on the type, first deposits to GBP can be made free of charge, while withdrawals cost £1. The withdrawal process is straightforward and generally takes 30 minutes but can take up to 24 hours.

Security

Coinbase uses various methods to keep your account safe. This includes compulsory security features like the 2-factor authentication (2FA) system. Notwithstanding, it is best to do your due diligence and take steps to guard against any unauthorized access that could compromise your account.

The exchange employs two critical security measures to secure customer assets:

1. Cold storage
2. Multi-party computation (MPC).

While most customer assets are stored in secure, offline locations, MPC protects the remaining assets online from attackers. With MPC, cryptographic keys are generated for any on-chain transaction. Keys are generated in different parts, making it almost impossible for any attacker to steal your crypto by combining all required keys.

Despite Coinbase’s “bank-grade” security, users have lost their assets using the exchange. In March 2023, a Coinbase user sued the exchange after losing 90% of his life savings, about $96,000, to a hacker after his phone was hacked and his account accessed. Another user lost $2 million worth of cryptocurrency after his account was compromised and he could not get any meaningful help from customer support when the incident occurred.

Customer Support

Most complaints from Coinbase customers relate to the site’s customer service: the lack of human interaction and the time it takes for customer inquiries to be returned.

The customer service options include a live chat function, a social help platform, and a ticketing system, all of which are more self-service than interactive.

Coinbase has scored good points on user experience, ease of use, and restitution of wrongly sent funds.

On Trustpilot, Coinbase has good customer reviews, scoring 3.8 out of 5 stars, which is solidly above average.

The potential APY on staked coins tops out at around 12% on Coinbase, and nine coins can earn rewards.

Staking and Rewards

Staking programs run by centralized companies, such as exchanges, have faced regulatory scrutiny, and in this fast-moving space, the outlook can change quickly, with exchanges ending programs and unstaking your tokens without your approval or knowledge.

Coinbase’s staking program was part of the SEC’s complaint against the company, so the legal questions over staking on the platform will likely linger as the case moves forward. Coinbase says it disputes the SEC’s interpretation of the legality of its offerings. Chief executive Brian Armstrong said in a written statement in June 2024 that the company is “proud to represent the industry in court to finally get some clarity around crypto rules.”

Yes, Coinbase is safe for any user to use. This is because Coinbase is among the only four exchanges that got a license in New York under the pilot BitLicense scheme, and operates in compliance with its regulations. Coinbase also conforms to regulatory measures adopted by the U.S. Securities Exchange Commission (SEC) and the Financial Crimes Enforcement Network, further building its credibility. This compliance improves security and offers users protection against fraud.

Another factor that makes Coinbase so secure is that the platform does not allow anybody to open an account and trade on it without revealing their identity. KYC rules mean that users must provide a piece of their ID issued by the government to use BUY and SELL services. This makes Coinbase a safe exchange.

In this Coinbase review, I’ve highlighted a lot of the positives about Coinbase. However, it is also critical to cover some of the negatives.

High Fees

Coinbase is a platform that allows transactions in many different currencies, using a range of payment methods, and the service fees are relatively high compared to other exchanges.

For instance, buying Bitcoin with a debit card is more expensive than transferring via a bank account or wire transfer. Usually, it attracts fees between 1.49% for bank transfers and about 3.99% for crediting/debiting a card. Additionally, there are fixed charges for minor currencies—in other words, $0.99 for Micro Payments for any price less than 10 USD and 1.49 USD for any price between 10 and 25 USD. This rate varies with the country or region you are in.

Account Limit

Coinbase limits how much you can spend and how often you can do it, for security purposes and fraud prevention. The limits are based on various factors, such as your account age, purchase history, and payment method.

It is worth noting that withdrawal limits vary for each account that you connect to your Coinbase wallet. For instance, you can spend a different and maybe lower amount on your credit card and another amount on your linked bank account.

New Users or Beginners

Coinbase should be used by newcomers who want a platform that will guide them through the complexity of the cryptocurrency markets while offering robust solutions.

Any User Looking to Buy with Fiat

Coinbase is a brokerage exchange that allows you to buy crypto with your fiat currency. This makes it a great entry into the crypto sector for any user.

Overall, Coinbase is one of the best broker exchanges currently available. It is highly regarded, well protected, and actually quite simple for beginners to study and operate. My Coinbase review found that while the fees are comparatively high and spending limits are imposed, despite these few drawbacks, it is one of the simplest and most secure ways to start your journey into the cryptocurrency world.