Coinbase vs Robinhood: which is the best crypto brokerage?
A correct comparison of Coinbase and Robinhood depends on the service you are looking for. Robinhood follows a traditional broker’s playbook. Through the app, you can buy stocks and exchange traded funds on the stock market, but it also has a limited menu of cryptocurrencies.
Coinbase, on the other hand, only offers cryptocurrencies (no stocks or ETFs here), and much more. Additionally, Coinbase has capabilities that could be considered essential when purchasing crypto – capabilities that Robinhood currently does not have.
One of the advantages of Robinhood over Coinbase is the cost of purchasing cryptocurrencies. On Robinhood, it’s free. You can buy and sell cryptocurrencies as often as you like at no cost (and the day trading rules that exist for stocks do not currently exist for crypto). You will still have to pay the spread (the difference between the bid and ask price).
It should be noted that in 2020, a Securities and Exchange Commission order found that Robinhood was providing “lower trade prices”, costing customers $ 34.1 million. The SEC investigation focused on the marketing and execution of Robinhood in general, not crypto transactions in particular. Robinhood agreed to pay $ 65 million to settle the charges.
On Coinbase, it’s not that simple. Coinbase has a very variable fee structure, depending on how much you buy in US dollars and how you pay it. For example, if you buy $ 100 in Bitcoin with a debit card, you will pay a fee of 3.99% or $ 3.99. If you are paying with a linked bank account, this fee would be $ 2.99. Coinbase also charges a spread of around 0.5% for cryptocurrency sales and purchases; this spread may change depending on market fluctuations. Overall, the fees at Coinbase can be confusing and frankly it seems a bit outdated to pay per trade as other brokers have been moving away from this for years.
Selection of cryptocurrency
This is where the cryptocurrency looks more like an afterthought for Robinhood, but it’s the bread and butter of Coinbase. On Coinbase, there are dozens of exchangeable cryptocurrencies, and even more that can be added to price watch lists. And, Coinbase adds new exchangeable cryptocurrencies quite often.
Robinhood, on the other hand, currently lists seven.
Winner of the cryptocurrency selection: Coinbase.
This is another category that Coinbase should earn by default: Robinhood is a stock broker that attempts to convert USD into cryptocurrency, while Coinbase is a brokerage and cryptocurrency exchange that also offers a hosted wallet. , as well as a personal wallet if you wish.
What does it mean? With Coinbase, you have the option of buying crypto with cash and then storing those coins on Coinbase’s hosted wallet. Or you can send these coins to your own Coinbase wallet, which is completely separate from the Coinbase app. There’s also the free Coinbase Pro exchange, where you can easily deposit coins from your hosted or personal Coinbase wallet and then exchange them for a much lower price. (Learn more about crypto wallets.)
In short, Coinbase is a very good onramp for new crypto users, providing users with many capabilities that cryptocurrencies were created for in the first place.
With Robinhood, you cannot send coins from the app, nor receive them from an outside wallet. Really, your only option is to convert your USD to crypto and then convert it back to USD if you want to benefit from a price increase. However, in a “fireside chat” hosted on YouTube, Robinhood CEO Vlad Tenev said they were working “as fast as possible” to offer a cryptocurrency wallet that would allow users to send and receive coins.
Winner of cryptographic capabilities: Coinbase.
The truth is that both companies have struggled to cope with outages during peaks in trading volume. And that’s usually when users are most keen on having full control of their funds, whether it’s a power surge or a crypto crash.
So, until either platform can prove that it can handle an unexpected influx of activity, users should be aware that this is a real possibility. However, according to Downdetector, Robinhood had 49 reported outages in 2021, while Coinbase had 28, giving Coinbase a slight edge over this metric.
Winner of technical reliability: Coinbase, based on data from Downdetector – although even Coinbase’s platform has occasional issues.
Ease of use
Both apps are incredibly intuitive, fast, clean, and easy to use, which makes sense – both companies make a large portion of their revenue from transaction volume. The more people buy and sell, the more money they make. So it is in their best interest to create a product that encourages buying and selling, even in small quantities, and which reduces all the friction that exists on how to press the “buy” button.
The end result is a product that is great for beginners in that the buying and selling process is reduced to the essentials; although some argue that it shouldn’t be so easy for newbies to trade risky and speculative assets like cryptocurrency.
Coinbase Pro may look more like an intermediate to advanced trading platform, but if you’re not ready to jump into that, the core Coinbase platform is still extremely easy to use, as long as you’re okay with it. to pay these fees. With Robinhood, you will never come across anything that looks like an advanced trading platform.
Ease of use winning: It’s a draw. They are both extremely well designed.
So which is better, Robinhood or Coinbase?
When it comes to cryptocurrencies, Coinbase is clearly the winner here. While its fees can be confusing and high, the option to trade on Coinbase Pro once you have a little experience can lower these fees. Robinhood’s free trading is good, but it doesn’t make up for the lack of crypto capabilities (the inability to send and receive coins is its biggest flaw) and the shortlist of cryptocurrencies in which to invest.
But if you only care about speculating on the price of cryptocurrencies – and you don’t intend to actually use the coins and tokens you buy – then Robinhood might be a better choice, given free exchanges.
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0.5% – 4.5%
varies by type of transaction; other fees may apply