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Coinbase and Robinhood are two of the biggest names in crypto. But which one offers the best cryptocurrency 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, such as Bitcoin (BTC), Ethereal (ET) and doecoin (DOGE).
Both exchanges are relatively easy to use, making it easy to create an account, link a payment method, and trade cryptocurrencies. Both also 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 on Coinbase is more customer friendly as they actually list your phone number, while Robinhood requires users to request a callback from within the app.
Security is key to protecting your investment in crypto. Coinbase and Robinhood have targets on their backs and have come under attack.
In a 2021 leak, criminals stole crypto from roughly 6,000 Coinbase customers. Coinbase reimbursed these customers.
Robinhood was also hacked last year, but it 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
base of coins Y Robin Hood They serve very different markets, and that means there are substantial differences in the cryptocurrency investment options offered by each platform.
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Selection of cryptocurrencies
Coinbase offers many more cryptocurrencies than Robinhood. With the latter, your investment selection is limited to just 17 cryptos, while Coinbase offers more than 150 cryptos.
That’s something to consider if you’re looking to trade cryptos other than major top cryptos, such as Cardano (ADA), Ethereal (ET), Polygon (MATIC) and USD Currency (USDC), to name a few.
Coinbase provides its own crypto wallet and also allows you to use your own third-party wallet. Storing your crypto in a wallet gives you an extra layer of protection against a hack.
Robinhood has announced that they are developing a crypto wallet and have started accepting people through a waiting list. They plan to release it to the general public later in 2022.
Other cryptocurrency features
Coinbase offers much more advanced features for crypto investors than Robinhood. For example, it offers a betting program that allows you to earn rewards. You can expect a staking return of around 3.28% APY for Ethereum and 4% for Solana on Coinbase.
Coinbase also offers an advanced trading platform with more investment and research tools on top of its expanded product, Coinbase Pro.
In terms of trading fees, Robinhood can be very attractive. The platform does not charge commissions for the purchase and sale of cryptocurrencies. Instead, Robinhood makes money through something called pay per order flow.
For crypto investors on a budget, commission-free trading is an attractive deal.
On the contrary, Coinbase fees are higher than those of crypto exchanges like KuCoin either Binance.US. Their basic platform fee is about 0.5% of your transaction. On Coinbase’s advanced platform, investors who trade less than $10,000 in a 30-day period would pay 0.6% and 0.4% taker and maker fees, respectively.
Investments beyond cryptocurrencies
Robinhood was founded as a stock trading app and only later got into cryptocurrencies. The platform allows you to invest in conventional assets such as stocks, exchange traded funds (ETFs) and options.
Coinbase specializes only in cryptocurrencies. They offer derivatives trading for cryptocurrencies and other assets like oil, but do not have access to investments like stocks, bonds, or ETFs.
Who Should Choose Coinbase?
Everything you need as a crypto investor is available on Coinbase.
This cryptocurrency exchange combines a wide range of cryptocurrency investment features with a user-friendly platform. They provide a range of services such as staking, an advanced trading platform, and a crypto wallet. It’s a good option if you want a wide 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 cryptocurrency trading. It offers strong customer service and training courses, which pay crypto rewards as you complete them. You can learn while building your portfolio at the same time.
The main drawback of using Coinbase is the high trading fees. Their fee structure is also difficult to understand, meaning you may not know how much you’ll be paying until you set up a trade.
If you plan to trade frequently, you may be better off with a lower cost option. Also, if you plan to stick to buying and selling popular coins, Robinhood might be a better deal with their no-commission exchanges.
Advantages of Coinbase:
- Excellent selection of cryptocurrencies
- Variety of services like staking, an advanced trading platform, and a crypto wallet
- 24/7 phone support
- Quality educational materials.
- High trading fees
- Complicated fee structure
- Recent security breach
Who should choose Robinhood?
If you only want to buy and sell cryptocurrencies as an investment and plan to stick to the more common tokens, Robinhood is a good option. Their trading app is extremely easy to use and doesn’t charge any fees.
You can buy cryptocurrencies without paying additional fees. Since Robinhood is also an investment broker, you can buy other investments such as 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 allow you to withdraw your tokens directly to an external wallet.
You must first sell and convert to cash before making a withdrawal. They are developing a wallet for this purpose, but it will not be available until the end of 2022.
Advantages of Robinhood
- No commissions or fees on cryptocurrency trading
- Provides other investments such as stocks, ETFs, and options
- Easy to use investment app
Cons of Robin Hood
- Limited selection of cryptocurrencies
- You cannot withdraw crypto, you have to withdraw money first
- No features like gambling
- No advanced trading platform