(That total is currently worth more than $37 billion.)Ĭoinbase has never had such a calamity, though there have of course been customer complaints about the fledgeling exchange. Gox debacle, when roughly 850,000 Bitcoin were stolen in 2014. That was an especially salient claim after the Mt. SecurityĬoinbase built its reputation as a secure place to buy and sell crypto. A search bar helps you sift through the myriad of crypto offerings available-from Bitcoin to Tellor-and you can set up purchases to recur on an ongoing basis.įor those a bit deeper in the weeds, Coinbase allows you to trade select cryptos to other cryptos, meaning you can convert your Litecoins to Augur, for example. The interface is bright and simple to navigate. You can then link your bank account to your account through data transfer network Plaid, the recommended method to minimize trading costs. You’ll need to upload a state or federally issued piece of identification should you want to sign up for Coinbase Pro. With its higher fees, why has Coinbase become one of the most popular destinations to purchase cryptocurrencies in the U.S.? A few reasons: Ease of Useįor one, it is incredibly easy to use. “We expect Coinbase competitors to cut their trading fees to zero in an effort to increase market share.” Coinbase Features “The race to the bottom phenomenon that took place in late 2019 with stock trading fees will likely make its way to the crypto trading space,” says David Trainer, CEO of New Constructs, an investment research firm. Not coincidentally, Robinhood now allows its customers to trade crypto. After Robinhood offered no-fee commissions on stock trades, for instance, Charles Schwab and E-Trade, among others, followed suit. Hopefully, as consumers have more options to make crypto trades, Coinbase’s fees will decline. Without fees, though, you would have had about $68,700.īy simply executing your trades, Coinbase would have skimmed more than $2,000 off your returns in fees, or about 4.6% of your total return. Assuming Bitcoin returns an annual average of, say, 10%, you’d end up with almost $66,700 after fees. Let’s say you put $100 into your Coinbase account each month to buy Bitcoin for 20 years. (In the traditional stock investing world, this dynamic led to uber-low-cost passively invested index funds that charge substantially less than actively managed funds with comparable, if not better, performance.) While that fee may not seem like much right now, over time it can seriously impact your returns. In practice this means your $100 only gets you $97 worth of Bitcoin. bank accounts and Coinbase USD Walletsįees for purchases above $200 may run up to 1.5% of any transaction for a minimum fee of $0.55.
Transactions more than $50 but less than or equal to $200, the fee is $2.99Īfter exceeding $200, the fee structure changes to be percentage based, determined by how you pay for the crypto:.Transactions more than $25 but less than or equal to $50, the fee is $1.99.Transactions more than $10 but less than or equal to $25, the fee is $1.49.
Here’s how the flat fee shakes out for American buyers: This fee is the greater of either a flat fee or a variable percentage, which can be slightly confusing to figure out. Then there’s the aptly named “Coinbase Fee,” which is contingent on the size of your purchase, the fiat currency you use to make it and how you pay. There may be padding on either end to help Coinbase make a profit. Coinbase then adds on the spread fee which it terms the “consumer exchange rate.” This is essentially the difference between the price Coinbase pays to get a crypto and the price it resells it to you for. To determine what that’s worth in Bitcoin, Coinbase uses the exchange rate on Coinbase Pro. When you want to buy a cryptocurrency, such as Bitcoin, you log into your Coinbase account and pick an amount you want to buy, say $100 worth. The problem is that Coinbase’s most consumer-friendly offering, its namesake Coinbase platform, charges higher fees for its convenience and simplicity than you may get elsewhere-even on its more complicated crypto trading platform, Coinbase Pro.įirst there’s the so-called “spread fee,” which Coinbase says is typically 0.50% of your transaction. This isn’t necessarily bad-almost all crypto exchanges charge fees, whether they’re overtly labeled as such or not. One reason why Coinbase has earned nearly $3 billion in revenue over the past 12 months, per Morningstar, is that it charges a bunch of fees.
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