Coinbase Review 2022: Everything You Need to Know

Coinbase is one of the most popular cryptocurrency exchanges in the world, boasting more than 70 million users in over 100 countries, and hundreds of billions of dollars in quarterly transactions. Coinbase offers a simple way to buy and sell Bitcoin and other popular crypto through an intuitive mobile app. Coinbase also has an advanced trading platform (Coinbase Pro) for active crypto traders, offering lower fees and more trading tools.

We’ve reviewed Coinbase’s features including available cryptocurrencies, fees, customer service, and security to help you find out if it's a good fit for crypto investors.

What Is Coinbase?

Coinbase is a centralized cryptocurrency exchange that allows users to buy, sell, trade, and earn interest on crypto, as well as borrow against cryptocurrency holdings. Coinbase was founded in 2012 by Brian Armstrong, and has since grown into the largest crypto exchange in the U.S. (by volume). In fact, Coinbase is the first publicly-traded cryptocurrency exchange, launching its stock for sale via a direct listing in 2021.

Coinbase started as a Bitcoin crypto exchange, allowing users to deposit fiat currency (such as U.S. Dollars) in exchange for an equivalent amount of Bitcoin. As of December 2021, Coinbase now offers over 130 cryptocurrencies for trading, with more being added weekly.

Coinbase has two platforms:

Coinbase. The standard platform is designed for beginners and new crypto investors to buy and sell cryptocurrency. It offers real-time prices of popular crypto, the ability to quickly purchase crypto with a debit or credit card, and even educational videos and quizzes that allows users to earn crypto by watching the videos.

Coinbase Pro. Designed with advanced traders in mind, this platform offers advanced charting, a large selection of crypto trading pairs, and access to limit and stop orders. It also has much lower fees, charging a 0.50% spread fee for trades, with low fees available to high-volume traders.

Coinbase Overview

How Does Coinbase Work?

Users can sign up for a Coinbase account by providing an email address and password. Coinbase will then send a verification link via email for users to click to verify their account. Once your email address is verified, you will be required to provide some personal information, as well as verify your identity. This means submitting a picture of a valid photo ID to complete identity verification. Coinbase follows U.S. Know-your-Customer (KYC) standards to comply with FinCEN government regulations for crypto exchanges.

Once your identity is verified, you can deposit crypto or fiat currency, and begin trading. Coinbase offers a simple interface for users to buy, sell, or “convert” cryptocurrency, while charging a fee for each transaction. Buying and selling is pretty straightforward, allowing users to use fiat currency to make a purchase, or sell crypto in exchange for fiat currency. Converting crypto is the process of exchanging one cryptocurrency for another (such as trading Bitcoin for Ethereum).

Users can also watch educational videos to learn more about certain crypto projects, and earn some of that currency for completing the training. Coinbase pays interest on holding certain crypto in your Coinbase account. Users can also borrow cash against Bitcoin holdings, allowing them to take out a loan against the Bitcoin balance (though interest rates are fairly high).

Coinbase Pro is available to users that want access to more advanced trading tools and lower fees. Users can sign into Coinbase Pro with their regular Coinbase email address and password, and transfer crypto assets to the Coinbase Pro wallet for trading. The platform offers over 100 crypto trading pairs, candlestick charts with multiple indicators, and multiple order types, including market, limit, and stop orders.

Coinbase Fees

Coinbase charges fees for most transactions, including buying and selling crypto, and transferring funds. While some of the fees are listed on the Coinbase site, some of the fees are not transparent, and Coinbase only shows the final fee on the transaction page before you place a trade. Here’s a breakdown of the Coinbase fees:

For transactions under $200, Coinbase charges a flat fee instead of a percentage.

• $10 or less: $0.99 fee
• $11 to $25: $1.49 fee
• $26 to $50: $1.99 fee
• $51 to $200: $2.99 fee

These fees are all estimates, and are subject to change. An overview of Coinbase’ fees can be found here.

Coinbase Mobile App

Coinbase offers two different mobile apps; One for the regular platform, and one for Coinbase Pro users. Both mobile apps are available on iOS and Android.

The Coinbase app offers access to trading, earning interest, deposits and withdrawals, as well as user education and articles built into the app. Users can perform most of the same functions as the desktop app.

The Coinbase Pro mobile app offers access to trading, advanced charting, and real-time order books, aimed at active traders. Users can manage their accounts and place advanced trades directly from the app.

Overall, Coinbase offers an intuitive mobile app for both basic and advanced traders.

Coinbase Customer Service

Coinbase offers customer service via email or phone, but the only phone support offered is for fraudulent account activity. Coinbase does have a large library of help articles, as well as a virtual chat bot to assist customers in finding answers to their questions. Coinbase does not offer live chat, or same-day email response.

Overall, Coinbase offers basic customer service, on par with most crypto exchanges.

Coinbase Pros and Cons

Coinbase is one of the top crypto exchanges available today, but it’s not for everyone. Here are a few things we love about Coinbase, and a few things it could improve:

Pros

• Intuitive mobile apps (both Coinbase and Coinbase Pro)
• Easy to use for beginners
• Access to advanced trading tools (Coinbase Pro)
• Wide selection of cryptocurrency (130+)
• Loads of security features

Cons

• High fees (and non-transparent fee structure)
• Many user support complaints

Who Can Invest With Coinbase?

Coinbase is available to adults (18+ years old) around the globe in over 100 countries, as well as in 49 U.S. states (excluding Hawaii). Institutional investors can also invest with Coinbase using its over-the-counter (OTC) trading desk or new Coinbase Prime investing platform.

Users that are residents of Hawaii, and that are not located in one of the supported countries are not legally allowed to open an account or invest with Coinbase.

Is Coinbase Legit and Safe?

Yes, Coinbase takes security very seriously, and offers a host of security features to help keep user assets and data safe. All users are encouraged to set up two-factor authentication with Google Authenticator to prevent unwanted access or withdrawals from your account. Coinbase also uses biometric access for its mobile apps.

To protect user crypto holdings, Coinbase keeps 98% of all crypto assets in offline cold storage. As a digital asset custodian, Coinbase also offers “Crypto Vaults,” which allows users to require multiple digital signatures to access.

Coinbase also covers user deposits of U.S. Dollars with FDIC insurance, insuring up to $250,000 for each user. To be clear, this only covers the cash in the account, not the crypto.

Coinbase is one of the most secure ways to trade and store crypto.

Can You Actually Make Money on Coinbase?

First, know that trading cryptocurrency is highly speculative, and as a brand new asset class, investing in crypto carries the risk of loss, including total loss of your principal investment.

That being said, investing in Bitcoin or other cryptocurrency can be profitable for long-term investors.

In addition to buy-and-hold investing, Coinbase also pays interest for holding certain cryptocurrency in your Coinbase account. Stablecoins (such as USDC or DAI) pay the highest rates currently.

And finally, users can earn free cryptocurrency by watching training videos on Coinbase.

Don't Miss: The 7 Best Crypto Exchanges of 2022 With Low Fees

Do You Actually Own Bitcoin on Coinbase?

“Not your keys, not your crypto.”

While Coinbase offers a secure way to purchase and store Bitcoin and other cryptocurrency, you do not truly own your Bitcoin until you take custody. This means transferring your digital assets off the Coinbase platform into your own digital wallet.

This could be a “hot wallet,” which is an online wallet that is password protected, as well as secured with a 12-word recovery phrase. This could also be a “cold wallet,” also known as a “hardware wallet.” These wallets are similar to hot wallets, but are cryptographically secure USB wallets that are stored offline.

Both types of wallets are secured using private keys, and some may even require multiple sets of digital keys for obtaining access. Using a cold wallet is considered the safest way to store Bitcoin, or any other digital asset.

Can You Buy Dogecoin on Coinbase?

Yes, you can Dogecoin on Coinbase.

If you are interested in investing in your favorite dog-themed meme coin, you can find it on both Coinbase and Coinbase Pro.

In fact, both Dogecoin and Shiba-Inu (another popular doggy meme coin) are available for trading on Coinbase.

Summary

Coinbase is one of the best all-around cryptocurrency exchanges available, offering a wide selection of coins, tools for both beginners and advanced traders, and security at the heart of its operations. While the fees are high for regular Coinbase users, Coinbase Pro traders can enjoy reasonable fees, with discounts given to higher-volume traders.

Coinbase also offers high-quality user education materials, including training videos that pay users to watch. Users can also borrow against their Bitcoin holdings, pulling out cash without the need to sell their assets. Overall, Coinbase is a great place for beginners and advanced crypto traders alike to buy, sell, and trade cryptocurrency.

Check out Coinbase to learn more and get started.

Ask an Expert: What Is the Role of Cryptocurrency in my Portfolio?

First, you need to decide why you want to purchase a cryptocurrency. Is it to use as a currency or for certain transactions, or instead to accumulate as an investment? As your crypto allocation increases, it’s important to have a strategy for incorporating it into your portfolio.

How much you should buy depends largely on your tolerance for and ability to take risk. The standard deviation of cryptocurrency more closely resembles stocks than bonds, and the frequent swings can be extreme. As with any investment, unless you are trying to profit in the short-term, consider whether you are able to withstand this type of volatility and not sell (or buy) in a panic.

Many consider a small cryptocurrency allocation as a sort of alternative investment, which is less correlated to stocks and may be a good way to further diversify a portfolio. As with any alternative, it is important to not overweight this type of investment as many are considered high risk and high reward. Some speculate the value of cryptocurrencies could go to zero effectively, though the threat of this appears less and less likely. Still, avoiding overexposure to crypto is a smart strategy for the long-term.

Last, there are more practical matters such as developing a rebalancing strategy, reporting gains (and losses) to the IRS, and even whether it makes sense to purchase cryptocurrency indexes inside of an IRA or Roth IRA. Before you buy into the crypto frenzy, it’s critical to ask these types of questions and have a clear long-term strategy as part of your financial plan.

References:
https://www.coinbase.com/about
https://blog.coinbase.com/coin...
https://www.coinbase.com/yield
https://www.coinbase.com/place...
https://www.coinbase.com/secur...