coinbase and Robinhood are two of the most popular places to trade cryptocurrencies, but which one is better for YOU? The answer depends on YOUr needs, especially on how much crypto trading you intend to do and the costs youre willing to pay.To get more news about
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Coinbase and Robinhood may appeal to different kinds of traders, though theres likely some significant overlap. Coinbase is a cryptocurrency exchange that targets traders deeply in the world of digital currencies. In contrast, Robinhood is a trading app that allows users to buy and sell stocks, ETFs, options and some types of crypto for no out-of-pocket cost.
The cost structure at Coinbase and Robinhood are significantly different, and it doesn‘t help matters that Coinbase purposely obscures much of its fee structure from potential customers (though it does disclose them before you actually place a trade). That said, Robinhood is not exactly straightforward about how it’s compensated either.
The fee structure at Robinhood is simple, relative to Coinbase‘s. In keeping with the broker’s “no commissions” model for stock and options, you won‘t pay any cost directly out of your pocket for buying and selling crypto. Instead, the cost of trading is effectively rolled into a spread markup on the trade. So you’ll effectively pay more when you‘re buying and receive less when you’re selling than if you received the best market price at the moment of your trade.
Coinbase‘s fee structure is confusing, to say the least. Not only does it charge varying fees based on how much you purchase, it has a basic tier of service and a pro tier, each of which have different fees. And recently Coinbase began to obscure the fees for its basic service, making it difficult for prospective customers to see how much they’re paying (Spoiler alert: prices are high if youre buying just a little bit of crypto on the basic tier.)
For smaller transactions, youll pay a spread mark-up of 0.5 percent of your trade value plus a flat fee based on the size of your transaction:At the lowest levels, around $10, you‘ll pay a fee that eats up nearly 10 percent of your purchase. But even at $200, you’re still paying a hefty 1.5 percent or so. And that‘s on top of the 0.5 spread mark-up that’s already factored into the purchase or sale price.
At purchase amounts above $200, youre still paying that 0.5 percent spread mark-up while a variable fee depends on your source of funds:If you opt to use Coinbase Pro, the company‘s higher service tier, you’ll be able to score lower overall fees, even if you‘re trading with lower amounts. Coinbase is clearer about these fees but the structure is scaled and depends on whether you’re adding liquidity (where the commission ranges from 0 to 0.5 percent of trade value) or taking liquidity (with commissions ranging from 0.04 to 0.5 percent).
Advantage: Robinhood, for the simplicity of its fee structure, even if its disclosure is no better than the one provided by Coinbase.
Available coins
Coinbase supports trading in more than 90 different cryptocurrencies, including the biggies such as bitcoin, Ethereum, Cardano, SOLana, DOGEcoin and more. So you‘re likely to find what you’re looking for and even plenty that you aren‘t. Sure, Coinbase doesn’t offer thousands of other much smaller digital currencies, but that wont matter for almost anyone but niche traders.
In contrast, Robinhood allows users to trade in just seven digital currencies: Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic and Litecoin. However, the app does give traders access to real-time data on these cryptos and nine others. The company has said that it‘s working on adding more coins to its platform, but it’s not clear when that could occur.
When it comes to the type of securities being offered, Coinbase is all crypto, all the time. If you want anything else — stocks, ETFs, options — youll have to find it elsewhere.
In contrast, Robinhood offers a wider range of securities, including stocks, options, ETFs and cryptocurrencies, though it doesnt offer bonds or mutual funds. Still, the app will reel in plenty of traders with what it does offer, so it can appeal to a wide audience even with a shallower pool of crypto.If you‘re looking to handle custody of your crypto assets yourself, Coinbase is your pick here. The exchange offers its own wallet, but you can also take custody of the assets yourself through your own wallet. So you can pick the solution that fits your needs best, whether you’re looking for a hardware wallet or software wallet or you just want to leave it with Coinbase for trading.
Robinhood does not offer a wallet, so traders will be forced to hold their crypto with the broker, as they would for stocks and other assets. The company has said it intends to offer a crypto wallet but hasnt laid out a timeframe for doing so.
