![Coinbase Vs. Robinhood: Battle of the Trading Platforms [2022]](https://justmylittlemess.com/wp-content/uploads/2022/02/clay-banks-NPlMmVsC40I-unsplash-720x540.jpg)
![Coinbase Vs. Robinhood: Battle of the Trading Platforms [2022]](https://justmylittlemess.com/wp-content/uploads/2022/02/clay-banks-NPlMmVsC40I-unsplash-720x540.jpg.webp)
Where we will compare Robinhood vs. Coinbase and other important factors
Whether you have been trading crypto for years, or you’re just getting started, you likely managed to get your start in trading through either Coinbase or Robinhood. We will break down the differences between the two exchanges on the following matters:
- Who is Coinbase
- Who is Robinhood
- Trading Fees
- Payment Methods
- Security
- New Users
- Customer Service
- Features
Thorough Coinbase Vs. Robinhood Comparison
| Thorough Coinbase vs Robinhood Comparison | Coinbase | Robinhood |
|---|---|---|
| Headquarters | San Francisco, CA | Menlo Park, CA |
| Transaction Fees | U.S. Bank Account: 1.49% Coinbase USD Wallet: 1.49% Debit Card: 3.99% ACH: Free Wire Transfer: $10 ($25 Outgoing) | $0.000119 per share no more than $5.95 |
| Security | 2-Step Verification, Whitlisting, Verification | TouchID, FaceID, Customer Pin, Two-Factor Authentication |
| Payment Methods | Debit Card, Credit Card, ACH, Wire | ACH |
| Two Factor Authentication | Yes | Yes |
| Allows New Users | Yes | Yes |
| Crypto Traded | BTC, ETH, ADA, UNI, LTC, LINK, USDC, BCH, XLM, FIL, WBTC, AAVE, ATOM, EOS, XTZ, ALGO, DAI, GRT, DASH, MKR, SNX, SUSHI, COMP, MATIC, MANA, BAT, ZEC, ETC, UMA, ZRX, YFI, BNT, ANKR, REN, OMG, CRV, CGLD, STORJ, LRC, KNC, SKL, REP, BAL, CVC, BAND, OXT, NMR, NU, DNT | Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Dogecoin, Ethereum Classic, Bitcoin SV |
Who is Coinbase?
Coinbase is a cryptocurrency exchange that was founded back in 2012 in San Francisco, CA. Since that time, they have become the top dog of Crypto Exchanges, especially here in the U.S. They have also recently filed with the Securities and Exchange Commission(SEC) to take the company public.
The company is slated to be a direct listing, and we could see their stock available as early as April of 2021! Suppose you’re excited about crypto, and you’re not ready to dive into owning coins. In that case, owning stock in Coinbase may be the right move for you, so keep an eye out for when they go public!
Coinbase offers a few ways to interact with the company.
- Purchase Crypto Directly from the Website
- Use Coinbase Pro – Great for Active Traders
- Earnable – Earn Free Crypto while you Learn
- Staking – Earn Interest on your Crypto
Coinbase Pro
Coinbase Pro, formerly known as GDAX, is built for institutions and day traders. If you’re used to trading common stock, you will love the order entry system Coinbase Pro uses.
It gives you the ability to be a maker, which substantially lowers your transaction fees. The system is available in the United States, United Kingdom, and throughout Europe. For more information, take a look here.
Earn Rewards
The one feature that really allows Coinbase to stand out is its “Earn Rewards” functionality. It is one of the best ways to acquire free crypto. You merely need to take a few minutes and review each of the videos of information on their site. Once complete, they will add a specific value of the coin to your Coinbase wallet. This is a great way to build up your crypto assets and learn along the way.
Staking
Coinbase has some better options for making use of the crypto that you hold on their crypto platform. You aren’t just able to buy and sell Bitcoin. You can also earn interest on several coins. It comes with the same protections offered to any wallet on their exchange.
This allows you to take advantage of the coins’ market volatility. It also lets you earn additional coins from the interest payments you receive as you go. It’s not a bad deal.
Who is Robinhood?
Robinhood is a financial services provider that is based in Menlo Park, CA. Their mission statement shows how they relate to the story of Robinhood. Instead of stealing from the rich to give to the poor, they are putting the right tools into average consumers’ hands so they can be as successful as Wall Street.
While Robinhood was founded in 2013, less than a decade ago, they have already amassed over $20 Billion in Assets. They have focused on being a zero fee broker for the average investor, so we’ll talk about some of that here in the future.
Robinhood’s advantages are their zero-fee crypto trading offered through their crypto division, and their financial services offer $0 commission trades. You will have access to crypto and the stock market. Not a bad combo!
The only actual fees you see are the Regulatory Transaction Fee that all broker-dealers pay and a trading activity fee that FINRA charges them. If you’re into trading stocks and bonds, you have the functionality to place limit orders. This allows you to buy or sell your crypto at specific price targets and align with most day trader’s philosophies.
Trading Fees
The next big piece of the puzzle to look at are the trading fees between Coinbase and Robinhood. Here, we are really comparing apples to oranges as the companies have two different focuses.
Coinbase is a revenue-generating machine. They brought in over $1.14 Billion in 2020 in revenue. This nearly quadrupled the revenue that they brought in just in 2019.
| USA | |
|---|---|
| Base rate of 4% for all transactions** | |
| Payment Method for Purchase/Payout Method for Sale | Effective Rate of Conversion Fee (after waiver) |
| US Bank Account | 0.0149 |
| Coinbase USD Wallet | 0.0149 |
| Debit Card Buy | 3.99%*** |
| Instant Card Withdrawal | up to 1.5% of any transaction and a minimum fee of $0.55 |
| USD Deposit Method | Fee |
| ACH Transfer | Fee |
| Wire Transfer | $10 ($25 outgoing) |
| All debit card payments are processed through Coinbase, Inc. |
Robinhood takes a stance similar to most discount brokerages. Their $0 commission fees are geared toward retail investors who are after low fees. Their Robinhood accounts are not charged a fee from ACH’s into their accounts. They also aren’t charged transaction fees from Robinhood to use their financial services division to purchase stocks. You can take a look at the fee schedule here if you’re interested.
Payments
While we have broken down the payments above, I will touch on a few differences here. If you’re looking for more flexibility, Coinbase is the way to go. Coinbase allows you to purchase through various avenues, such as ACH, Debit Card Purchases, Credit Cards, or wires. They give you a crypto wallet that enables you to store your funds either in USD or in cryptocurrency assets.
With Robinhood, they will take ACH or checks sent over to them, but you cannot use a credit card for your purchases. They do allow for immediate use of funds up to $1,000 on their Robinhood App or on their desktop website so that you can make quick purchases.
Security
For both Coinbase and Robinhood, the security features that they have will allow you to feel safe and secure so long as you take advantage of everything they offer. Remember not to use the same passwords for any two sites.
Also, make sure to use two-factor authentication is enabled. That way if someone does get ahold of your password, it makes it impossible to hack your account. This added safety measure is said to block 99.9% of automated attacks, and it is offered by both companies.
New Users – Getting Started
Coinbase offers a very intuitive New User setup. You simply go to their website and click on Get Started. This will run you through answering a few quick questions. You’re also able to trade on their exchange so long as you’re in any U.S. State besides Hawaii.
You will need to answer all of the questions, some of which will be KYC (Know Your Client) questions for tax purposes. They will then allow you to connect your bank account and credit or debit cards to make your starter purchases.
A new Robinhood Account entices you with a free stock for signing up. The entire process shouldn’t take more than 5 minutes or so and involves filling out more KYC information. Once you are signed up, and your bank account is connected, you’re good to go.
If you’re an experienced investor, you can now use their options trading platform as well. One thing to keep in mind. Suppose you wish to use their crypto division to purchase from their Bitcoin exchange. In that case, you are not allowed to make purchases in the following states:
- New Hampshire
- West Virginia
- Hawaii
This is not all-inclusive, and there may be others that aren’t listed. This is also subject to change as they are constantly adding new states all of the time.
If you are purchasing crypto on the Robinhood App, remember that you can only buy and sell at this time. You can’t take your crypto off their platform. If you don’t own the keys, you don’t own the cryptocurrency.
Both platforms allow you to see current market prices and the most up-to-date buy price for any crypto on their platform. This is nice for both experienced traders and newbies to know precisely how much each coin costs.
Customer Service
For Coinbase, you will find that they offer support through an extensive F.A.Q. that you can access at any time. Unfortunately, if you go looking for a phone number, you will find that it doesn’t exist. If you can’t find the information you are looking for through their help files, you can send out an email.
To get a response from Coinbase can take as little as a few hours, up to 72 hours. I haven’t really had any issues that have caused me to need their services, but I am a guy that likes to use the phone over email. This is something that all crypto exchanges are lacking currently.
Robinhood follows a similar format. You can use their comprehensive platform to search for anything you have questions about. They also have a cash management system that you can sign up for on their website. Unfortunately, there is no phone number listed, which means no phone support is available. You will need to email them with any questions you have.
This became a significant issue in the most recent debacle where individuals were stuck and unable to purchase Gamestop shares. You can learn more about that here.
Features
Coinbase
Coinbase has seen tremendous growth since its inception. When they started as a cryptocurrency trading back before it was popular, they offered minimal coins. Over the past few years, this has grown tremendously. Coinbase looks to be creating a one-stop solution for all of your needs, and we can look at it in the following.
They have created a robust trading platform that is geared towards both day traders and institutional traders. The beauty is, anyone who has a Coinbase account can log into Coinbase Pro and benefit from using the platform. They offer a wealth of information so that you can learn as you go. If you’re familiar with candlesticks charts and technical analysis, this is a great tool to use.
That isn’t the only functionality that Coinbase has been improving upon. They have also created Earn Rewards. This is great for a few reasons.
You are incentivized as a consumer to watch a few videos and learn about a specific coin’s function. The company then rewards you with a certain dollar amount of that coin for each video you watch. It gives you a chance to learn about crypto as well as acquire some in the process.
The last thing that is still relatively new is the ability to stake your crypto for a profit. Other companies are doing the same. The focus here is to not only give you a reason to keep your coins on the exchange but to incentivize you to do so. Those interest rates could range from 2% up to 8%, and you still get to capture the volatility in the process.
Their diverse platform offerers access Bitcoin, Bitcoin Cash, or Ethereum, but over 45+ coins. They also offer low fees and User-Friendly software. This is a great company to help you get started crypto trading.
Robinhood
If you’re only looking to dip your toes into trading crypto, but your first love is trading stocks and playing in the market, Robinhood was geared toward you. They give you the ability to buy, sell, and trade crypto in one account. This might be a better option if you want to hold it in a Robinhood Crypto Wallet since there isn’t currently a way for you to send your crypto off their platform.
You also don’t need to worry about paying an exchange commission for any trades, which can potentially save you a good amount in fees. To entice new users, they are currently offering a raffle ticket for stocks that range in price.
You will get access to the Robinhood App that lets you control your account from anywhere. You can apply for the ability to trade on margin and access all of the information they provide.
Final Thoughts
You really can’t go wrong with either firm if you’re just getting started in this wild world of crypto trading. The Coinbase app lets you quickly make purchases or move money from your bank account. So let me leave you with a few final thoughts. If you are ready to embrace crypto and take the time to learn all of the things that blockchain is changing in our world today, then you should start learning how to trade on Coinbase. You should also look into getting your own cold wallet from a place like Ledger.
While Coinbase is a fantastic company with a lot of security, the safest way to store your assets is in cold storage.
If you’re just dipping your toes in the water with crypto, but your goal is to trade stocks and bonds alongside crypto, take a look at Robinhood. Their mobile app will make it quick and easy to make trades. Just remember, you can’t take the crypto you buy off of their platform as of today. It stays in the Robinhood Crypto Wallet.
Either way, these two companies can help you trade to wealth if you take the time to learn.
Feel free to leave any questions or comments below!
Stay Happy!
Disclaimer: Just My Little Mess does not provide tax, investment, or financial services and advice. The information is presented without considering the investment objectives, risk tolerance, or financial circumstances of any specific investor. It might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal.