When Bitcoin and other cryptocurrencies took the mainstream by storm in 2017, the number of available options for getting started in cryptocurrency trading exploded. Since then, Coinbase and Robinhood have become two of the most well-known, trusted brands in the cryptocurrency trading space. It can be difficult to figure out which of these two options will by right for you, so let’s take a closer look at what each platform has to offer its users.
By: Kyle Torpey | May 30, 2020 | Modified Jun 22, 2020
The Coinbase brand is synonymous with the greater cryptocurrency space at large. It was the first major cryptocurrency exchange that made it simple and easy for its users to purchase their first Bitcoin, and the company has been riding their focus on ease-of-use all the way through today.
Robinhood got into the cryptocurrency game much later than Coinbase. Although Robinhood launched in 2013, they originally focused on traditional stocks rather than the cryptocurrency market. Having said that, Robinhood’s focus on simplicity with their original trading app has served them well in the cryptocurrency market.
|Headquarters:||San Francisco, USA||Menlo Park, USA|
|Company type:||Broker Exchange/easy buy-sell options||Broker Exchanges that also deals in traditional stocks|
|Fees:||Coinbase: Medium-High (1.49-3.99%) Coinbase Pro: Low (0% to 0.5%)||Low: 0.1% via spread|
|Available cryptocurrencies:||Bitcoin, Ethereum, Ripple (28 Total)||Bitcoin, Ethereum (7 Total)|
|Buy/Deposit Methods:||Debit Card, Bank Transfer, Cryptocurrency||ACH Bank Transfer|
|Sell/Withdraw Methods:||Bank Transfer, PayPal, Cryptocurrency||ACH Bank Transfer|
Both Coinbase and Robinhood are targeted to cryptocurrency beginners; however, a key difference is that Robinhood also lets their users invest in traditional stocks and ETFs. While Robinhood can be seen as the perfect platform for someone who investing in anything for the first time, Coinbase would be a better option for someone who wants to dig a bit deeper into the world of cryptocurrency.
The average person who just wants to gain exposure to the price of Bitcoin or another popular cryptocurrency will probably be better off with Robinhood, as they’ll be able to manage all of their investments in one location. Any beginner who wants to keep their focus on the cryptocurrency market will be better off with Coinbase, as there are more cryptocurrencies available for trade and users also have the ability to withdraw their coins off of the platform.
Security is a complicated area of comparison between Coinbase and Robinhood. On the one hand, Coinbase claims they have never been hacked, although it was recently revealed they may have faced a serious security issue in its early days. On the other hand, Coinbase also allows users to withdraw cryptocurrencies to their personal wallets, which means a hacker is able to more easily steal money from an account and actually get away with it.
Robinhood has faced a number of different security issues over the years, but these issues are mitigated by the fact that the platform operates in the traditional financial system, where transactions can be more easily reversed.
If you are getting into the world of cryptocurrencies for the first time, you’ll be better off with Robinhood from a security perspective, as the app will operate like your traditional investment accounts. More advanced users should opt for Coinbase, as it will give you more control over your funds and allow you to store your assets without any third-party risk (off of the exchange).
Robinhood claims that it offers zero-fee crypto trading, but the reality is there is still a cost to trading on this platform. While there are no direct fees charged, you will not be able to buy and sell Bitcoin and other cryptocurrencies at the same price. The buy price for Bitcoin and other cryptocurrencies on Robinhood is going to be roughly 0.1% higher than the generally-accepted rate found on most other exchanges, so there is still an added cost here to consider.
Having said that, this is still much lower than the 1.5% rate charged by Coinbase on their base platform. Even Coinbase Pro will charge more than Robinhood. For most traders, Robinhood will be able to provide lower fees than Coinbase.
Robinhood’s sign-up process is a bit easier than Coinbase’s, as long as you’re going through the full verification process on both platforms. While Coinbase let’s you buy cryptocurrency with a phone number being the only serious form of additional verification, this tier of the platform is limited to $9,000 worth of activity. If you want to expand your limits, you’ll need to provide a variety of documentation, including a photo of yourself holding your own government-issued ID.
On the other hand, with Robinhood, you only need to share your social security number to verify your identity.
Coinbase has four times the cryptocurrencies available to trade than Robinhood. That said, Bitcoin SV is available on Robinhood but not on Coinbase. If you know you’re only interested in Bitcoin, Robinhood might be the better option for now, but if you’re interested in dabbling in a wide variety of crypto assets, then Coinbase will be your best bet.
The fact that Robinhood allows users to do all of their trading (both crypto and stocks) in one app is a pretty big differentiator that is not commonly found in the cryptocurrency exchange market. Although the crypto asset selection is kind of limited, this ability to keep everything in a single app should be attractive to those who already have investments in the traditional market and do not have millions of dollars to throw around.
For Coinbase, the key stand out feature is its ability to onboard new users to the cryptocurrency ecosystem. Yes, Robinhood is easy for beginners too, but with Coinbase, you have the ability to take true control of your cryptocurrency assets. In terms of actually learning how this technology works while speculating on the prices of various cryptocurrencies, Coinbase is a better option than Robinhood.
There’s a lot of information to take in when comparing Coinbase vs Robinhood, and the reality is that there is no perfect exchange that can magically meet all of the desires of every possible user out there in the world today. If you’re someone who already has a Robinhood account and is thinking about trading cryptocurrencies for the first time, you’re probably better off staying with Robinhood for now. Although if you want to withdraw your cryptocurrency assets into your personal cryptocurrency wallet, Robinhood is not the best option for you. If you’re someone who wants to trade cryptocurrencies, learn more about cryptocurrency and various other coins in the market, have the ability to withdraw your crypto assets to your personal wallet at any time, then Coinbase is a better fit for you.