It’s no secret to any investor that cryptocurrency has been gaining a lot of traction in recent years and is increasing in popularity. Crypto represents a decentralized currency with no governing body. Whether you’re only looking to buy Bitcoin exclusively, or you’re looking to purchase multiple types of coins, you need a space where you can purchase them. This is done on a crypto exchange platform; crypto exchanges are a place for investors to purchase, sell, and trade crypto with ease. One exchange that is gaining some popularity lately is Coinbase.
What Is Coinbase?
Coinbase is a cryptocurrency exchange that was founded in 2012. It is a publicly-traded company and had its IPO earlier this year in April; it is currently traded at $349.29 a share. It, like the cryptocurrencies it facilitates the exchange of, is decentralized.
The exchange is used in over 100 countries and approximately $327B worth of crypto is traded in one quarter of the year. Additionally, Coinbase is a crypto exchange as well as a crypto wallet, this means that investors can store their crypto assets within the software. Users can access Coinbase via iOS and Android or by a browser.
Coinbase’s Unique Features
Coinbase has a number of beneficial features that investors can take advantage of and gain a better experience.
You Can Earn Crypto And Interest
Through Coinbase Learn, users can unlock cryptocurrencies by learning about them. This is another reason why Coinbase is perfect for first-time users; they are encouraged to learn about what they’re buying. To earn crypto through this feature you have to go through their tutorial and take their quizzes. For each quiz you complete, you’ll be awarded a certain amount of crypto. On certain tokens, users can earn up to 5% interest on their investments.
Ease Of Use
Coinbase is perfect for crypto-traders who are just starting off; it is as simple as downloading an app on your phone and uploading funds. It facilitates quick and easy buy, sell, and trade transactions for its user.
Large Number Of Tokens Available For Purchase
Coinbase supports a little over 100 unique coins that users can buy as crypto-assets; this includes all the popular cryptos like Bitcoin, Ethereum, Dogecoin, and more.
Cryptocurrency Is Insured
Coinbase has crime insurance that protects a portion of all digital assets (including those of its users). This, however, does not include losses that are a result of unauthorized access due to an individual’s own oversight. Essentially, you’re covered if the breach has to do with all of Coinbase and not just because you gave your login credentials to the wrong person.
Coinbase has an elite membership for those who want to take their trading to the next level. It gives users:
- Advanced insurance protection – All USD balances are covered by the Federal Deposit Insurance Corporation for up to $250,000.
- Lower Fees – High-volume trading is subject to lower fees than non-members.
- More Types Of Cryptocurrencies – More cryptocurrencies are available, non-members have access to 107 but members have access to over 250.
- Extra Transaction Features – Coinbase Pro offers more transaction types like a stop order, a time in force order, and a limit order.
Drawbacks Of Coinbase
- High Transaction Fees – With the regular Coinbase platform, transaction costs are a bit higher than their competitors.
- Missing Smaller Coins – While Coinbase carries all the major cryptocurrencies, on its main platform, it is lacking in smaller, less popular tokens.
- Funding Options – Coinbase only has two ways for Canadians to buy and sell their crypto: debit card and PayPal.
Options For Funding Your Account
In order to start investing in crypto, you’ll need to create an account with Coinbase and attach a payment method to your Coinbase account.
For Canadian users getting your funds into your account can be difficult as you are not able to connect your bank account through online banking like you can with other exchanges (e.g. WealthSimple Crypto). Below we’ve broken it down for you:
- Limit – Buying tokens with your debit card involves lower limits meaning you cannot buy as much in one transaction as you can with PayPal.
- Sell/Buy – Debit Cards are recommended for buying and not selling. PayPal is the only option for Canadians to “cash out” their crypto.
- Buy Time – Instant
- Limit – PayPal has a higher limit than debit withdrawals meaning you can purchase more crypto in one transaction than with a debit card.
- Sell/Buy – PayPal is recommended for selling crypto and having money sent back to your PayPal.
- Buy Time – Nearly Instant
How Much Does Coinbase Really Cost?
Compared to other crypto exchanges, Coinbase has medium to high transaction fees for regular members (not Coinbase pro). Along with paying the price of your crypto tokens, you are subject to various fees in order to complete the transaction. Below is a breakdown of fees for Canadian Coinbase users:
|Deposit Fee (Debit Card)||3.99%|
|Trading Fees||No Cost|
|Bitcoin Purchase Fee||4.55%|
|Bitcoin Withdrawal Fee||Network fees|
These costs may be a deterrent from using Coinbase but they also act as an incentive to upgrade to Coinbase Pro and access lower fees and higher limits.
How To Make An Account With Coinbase?
In order to join Coinbase, you have to be at least 18, have an internet connection, and a government-issued photo ID.
- Download the Coinbase app or go to the Coinbase website and click “Get Started”
- Fill in your information accurately; you will be asked for your name, email, and province, and you’ll be asked to create a password (make it as secure as possible)
- Click “Create Account” and go to your email for the confirmation email
Check out if Coinberry is a better match for you.
How To Fund Your Coinbase Account?
Your next step on the path to buying crypto is adding funds to your account. In Canada, this can only be done through your debit card.
- Go under “Payment Methods” in the settings tab
- Click “Link a New Account” and select Debit Card
- Enter your card information and then you will see two temporary debits on your account for a small amount; you then need to enter these amounts on Coinbase for verification purposes
- Go to the buy page and make your purchases
How To Buy Crypto On Coinbase?
Now that you have created and funded your account, its time to add some crypto assets to your portfolio:
- Sign in to your Coinbase account on the website or app
- Click on buy/sell in the top right-hand corner of your screen
- Click “Buy” and you will be prompted to select a cryptocurrency; choose the one you wish to purchase.
- Enter the dollar amount you wish to purchase or the amount of crypto you own already and want to use to purchase the new crypto, and then select your payment option
- Select “Preview Buy,” if you aren’t satisfied you can select the back arrow; if you are satisfied click “Buy” and confirm your order
Can I trust Coinbase?
Has Coinbase ever been hacked?
Can I use my credit card to buy crypto?
The Bottom Line
Coinbase is a reputable crypto trading platform that is easy to sign up for and use; it is perfect for those who want to dip their toes in crypto investing. The trading costs are relatively high and payment options are limited, but Coinbase keeps your assets as secure as possible and even insures them. There are plenty of options with respect to choosing a crypto exchange, however, you cannot go wrong with Coinbase.