Coinbase vs. Robinhood

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 key differences and similarities between Coinbase and Robinhood.

Coinbase vs. Robinhood: Similarities

Coinbase and Robinhood allow you to 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 set up an account, link a payment method and star trading crypto. 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. The phone service at Coinbase is more customer-friendly as they actually list their phone number, whereas Robinhood requires 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 2021 breach, criminals stole cryptocurrency from roughly 6,000 Coinbase customers. Coinbase reimbursed these customers.

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

Coinbase vs. Robinhood: Differences

Coinbase and Robinhood serve very different markets, and that means there are material differences in the cryptocurrency investing options offered by each platform.

Cryptocurrency Selection

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

That’s something to consider if you’re looking to trade cryptos other than core mainstream cryptos, such as Cardano (ADA), Ethereum (ETH), Polygon (MATIC) and USD Coin (USDC), to name a few.

Crypto Wallets

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

Robinhood has announced they are developing a crypto wallet and have begun to accept people through a waiting list. They plan to release it to the general public later in 2022.

Other Cryptocurrency Features

Coinbase offers far more advanced features for cryptocurrency investors than Robinhood. For instance, it offers a staking program that lets you 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 tools and research on its scaled-up 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 through something called payment for order flow.

For crypto investors on a budget, zero-commission trades are an attractive deal.

In contrast, the fees for Coinbase are higher than crypto exchanges like KuCoin or Binance.US. The fee for their basic platform is about 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 (ETFs) and options.
Coinbase specializes in cryptocurrencies only. 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 Pick Coinbase?

Whatever 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 like staking, an advanced trading platform and a crypto wallet. It’s a good choice if you want a large variety of tokens but still want an exchange that’s easy to use.

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 up your portfolio at the same time.

The main drawback of using Coinbase are high trading fees. Their fee structure is also difficult to understand, meaning you might not know how much you’ll pay until you set up a trade.

If you plan on trading frequently, you may be better off with a lower-cost option. In addition, if you plan on sticking to buying and selling popular coins, Robinhood could be a better deal with their zero-commission trades.

Coinbase Pros:

  • Excellent selection of cryptocurrencies
  • Variety of services like staking, an advanced trading platform and a crypto wallet
  • 24/7 phone support
  • Quality educational materials

Coinbase Cons:

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

Who Should Pick Robinhood?

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

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

However, Robinhood does not specialize in cryptocurrency trading. As a result, its features are limited.
Another drawback is that Robinhood does not let you withdraw your tokens directly to an outside wallet.

You need to sell and convert to cash first before making a withdrawal. They are developing a wallet for this purpose, but it won’t be out until the end of 2022.

Robinhood Pros

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

Robinhood Cons

  • Limited cryptocurrency selection
  • Can’t withdraw crypto, you need to cash out first
  • No features like staking
  • No advanced trading platform

More From Advisor

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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