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Coinbase vs.
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Robinhood: Which Is Best for Cryptocurrency Trading? By Jacob Wade Date
April 08, 2022
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Coinbase and Robinhood are two of the most popular apps for users to buy and sell cryptocurrency.
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With simple-to-use mobile apps, access to Bitcoin and other popular crypto, and a focus on security, both Coinbase and Robinhood are good options for beginners to start trading crypto. Coinbase is a pure cryptocurrency exchange, offering access to a wide selection of crypto for trading, as well as the ability to earn interest on certain crypto.
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Robinhood is more of a stock trading app that happens to also offer cryptocurrency. We compared both Coinbase and Robinhood based on their features, including crypto selection, security, fees, and overall platform features.
Key Features of Coinbase and Robinhood
Coinbase and Robinhood both offer a way for new investors to start investing in crypto using U.S. dollars, as well as the ability to trade crypto for other cryptocurrencies.
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Both are very secure platforms and both offer access to some of the most popular crypto on the market, including Bitcoin.
You own shares of Apple, Amazon, Tesla. Why not Banksy or Andy Warhol? Their works’ value doesn’t rise and fall with the stock market.
You own shares of Apple, Amazon, Tesla. Why not Banksy or Andy Warhol? Their works’ value doesn’t rise and fall with the stock market.
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And they’re a lot cooler than Jeff Bezos.
Get Priority Access But both platforms approach crypto trading in a different way. Whereas Coinbase is a full-service crypto exchange, Robinhood is a stock trading app that also offers access to a few cryptocurrencies.
Get Priority Access But both platforms approach crypto trading in a different way. Whereas Coinbase is a full-service crypto exchange, Robinhood is a stock trading app that also offers access to a few cryptocurrencies.
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Here’s a quick comparison of the features of each platform:
Cryptocurrency Selection
While Coinbase and Robinhood both offer access to Bitcoin, Ethereum, and other popular crypto, Coinbase offers far more options for investors. Here’s how they compare:Coinbase Cryptocurrency Selection
Coinbase offers access to over 160 cryptocurrencies, with most of the top coins available, as well as some smaller projects, giving users a good mix of altcoins to choose from.
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Users can buy or sell any of these crypto, as well as trade one crypto directly for another using the “Convert” feature. Coinbase also allows users to “stake” certain crypto, allowing users to earn rewards in the form of more of the same token that is staked. Coinbase users can also borrow against Bitcoin holdings, although the interest rate is fairly high.
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Robinhood Cryptocurrency Selection
Robinhood only offers access to seven cryptocurrencies on its platform: Bitcoin SV (BSV)Bitcoin Cash (BCH)Bitcoin (BTC)Dogecoin (DOGE)Litecoin (LTC)Ethereum Classic (ETC)Ethereum (ETH) While Bitcoin and Ethereum are the two most popular crypto on the market, other crypto on this list are much less popular, and aren’t even in the top 10 cryptocurrencies by market cap. This lack of selection may be fine for those only interested in these seven coins, but for users who want to invest or trade a larger selection of cryptocurrencies, Robinhood is not the best fit.
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Trading Platform
Both Coinbase and Robinhood offer simple trading platforms that are designed for beginners to quickly buy and sell crypto. But the trading options differ between them, with Coinbase offering a few more features than Robinhood, and Robinhood offering robust stock trading capabilities. Here’s how they compare:Coinbase Trading Platform
Coinbase offers two trading platforms: a simple one for beginners and an advanced trading mode for active crypto traders. The standard platform allows users to browse crypto by market cap or view by category.
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Users can view a simple line chart for the performance of the crypto and place orders within a simple order form. The order form allows users to purchase crypto with a connected bank account, debit card, or credit card. Cryptocurrency can be sold as well, either exchanged for fiat currency like U.S.
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dollars or converted to another cryptocurrency. The advanced trading platform allows users to view a detailed candlestick chart with built-in indicators, live order books, and an active trade history.
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Users can place standard market orders, but can also place limit and stop-loss orders as well. Fees are much lower on the advanced trading platform, ranging from 0.00% to 0.60% per transaction. This platform is still rolling out to users, but is a great option for those looking to save money on fees and access more trading options.
Robinhood Trading Platform
Robinhood offers a robust trading platform that is both intuitive and feature-rich for new and advanced users alike.
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Users can place standard market orders, purchasing Bitcoin or other crypto with a connected bank account, or trading from one crypto to another. Limit orders are also available, allowing traders to set the price at which they want to make a purchase.
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For more advanced trading, users can expand the standard line chart, revealing an advanced chart that allows users to add indicators, as well as switch to a candlestick chart view. Although this allows a deeper look into crypto performance, Robinhood is still more limited with its trading tools than the Coinbase advanced trade mode and than other exchanges, such as Kraken. Robinhood also offers stock trading, including trading options and futures contracts, as well as leveraged trading with a margin account.
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As a stock trading app first and foremost, Robinhood offers far more advanced trading tools and options for stock traders than for its crypto platform.
Security Features for You Valuable Accounts
Both Coinbase and Robinhood take security seriously.
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As two of the most popular trading apps in the U.S., there is a lot of trading volume, as well as attempted cyberattacks on these platforms. Here’s a breakdown of how each of these exchanges approach security:
Coinbase Security
Coinbase offers a wide range of security features for users, plus bank-grade security for its servers and crypto storage. User deposits of U.S.
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dollars are protected by FDIC insurance up to $250,000 per account. This protection is similar to what most U.S.
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banks provide, and will reimburse users in case Coinbase loses access to your money or goes out of business. Coinbase also requires two-factor authentication (2FA) on user accounts, requiring a six-digit passcode to log in and protecting users from hackers.
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This is financial industry standard practice at this point, but many crypto exchanges still don’t require it. Coinbase protects user assets by storing 98% of all user crypto in secured cold storage vaults, meaning they are disconnected from the Internet and inaccessible to hackers.
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Coinbase also uses AES encryption across its platform, protecting user data with the same encryption level used by banks and governments. Overall, Coinbase is one of the most secure cryptocurrency exchanges on the market today.
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Robinhood Security
Robinhood offers similar security measures to Coinbase, with data encryption and two-factor authentication standard on all accounts. Robinhood uses TLS encryption to ensure user data from the website and mobile app is always protected. Robinhood offers FDIC insurance on cash deposits up to $250,000 for each account.
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Because Robinhood sells securities like stocks and exchange-traded funds (ETFs), those investment accounts also offer SIPC insurance protection of up to $500,000 per account. Even with all the protection, Robinhood has been a target of hackers, with a recent exploit of over 7 million users’ personal information being stolen. No user funds have been stolen, but this is still concerning for those looking to join Robinhood to trade crypto.
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Fees for Trading Crypto
Both Coinbase and Robinhood charge spread fees on transactions, making it difficult to track exactly how much users are being charged per trade. Although Coinbase offers some insight into their fee structure, Robinhood claims to charge no fees on transactions, which is only partially true.
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Here’s how both Coinbase and Robinhood compare on fees:
Coinbase Fees
Coinbase fees have become less transparent over time, with fees varying by the size of the transactions and volatility of the market when the order is placed. Most transactions are charged about a 1.49% fee, plus any spread between the bid and ask price of the sale, which averages about 0.50%.
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Smaller transactions have a minimum fee charged, which can amount to a huge percentage. For example, making a $5 purchase comes with a $0.99 minimum transaction fee, which is almost 20% of the total. Coinbase also charges a 3.99% surcharge for transactions using a debit or credit card, making it a very expensive way to purchase crypto. On the other hand, the new advanced trader platform charges low fees ranging from 0.00% to 0.60% per transaction.
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This is in line with most other major crypto exchanges, and makes it a competitive way to lower fees while trading on the platform. Overall, Coinbase is more expensive than other crypto exchanges, but offers some options to lower fees on trades.
Robinhood Fees
Robinhood is famous for not charging fees on transactions, and it claims this is the case on its crypto platform as well.
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But although Robinhood may not charge an upfront fee, they do collect a spread, which is the difference between the bid price and ask price of a transaction. Robinhood also gets paid a commission for routing transactions through third-party companies for trade execution.
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This lack of transparency has gotten Robinhood into trouble with the U.S. Securities and Exchange Commission (SEC), and may cost investors money by overpaying for cryptocurrency. Because the spread is not detailed when a user orders, Robinhood fees will vary based on the cryptocurrency being purchased and the spread created when the transaction is executed.
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Overall, Robinhood may still save users money on upfront fees, but may cost them more when trades are executed at a higher price than other exchanges.
The Verdict Should You Choose Coinbase or Robinhood
When choosing a crypto exchange, it is important to understand what features are available, how the fees work, and what security measures are in place to protect your money and your data. Both Coinbase and Robinhood offer good platforms for trading crypto, but they are designed for very different users.
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Here are a few things to consider when choosing between Coinbase and Robinhood:
You Should Use Coinbase If…
Coinbase is a better fit if: You want a bigger crypto selection. Coinbase offers access to over 160 cryptocurrencies, with most of the top crypto available, as well as some smaller projects. This is much larger than Robinhood’s selection of seven crypto.You want to do more with your crypto.
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In addition to trading, Coinbase users can stake crypto to earn rewards, borrow against crypto assets, and even earn crypto by taking quizzes in the Coinbase Learn program.You want access to advanced trading. Coinbase recently launched its advanced trading platform, giving users more options for trades, as well as access to much lower fees.
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You Should Use Robinhood If…
Robinhood is a better fit if: You want to pay lower fees. Even though Robinhood does charge a spread, it offers zero upfront fees for trades, making it cheaper than Coinbase for crypto trading.You already use Robinhood for stock trading. If you’re already a Robinhood user, trading crypto on the platform will feel very familiar.
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You can use the same account you already have, and simply start trading.You only need access to a few cryptocurrencies. Robinhood offers a limited selection of cryptocurrency. But if you only want to trade Bitcoin, Ethereum, or one of the other crypto on the platform, Robinhood will work for you.You don’t need to own your crypto.
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Currently, Robinhood doesn’t give user’s custody of their crypto, so you must sell it to retrieve your money off the platform. The platform is working on releasing a new crypto wallet to allow transfers off the platform in the future.
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Both Are Great If…
Both Coinbase and Robinhood are excellent options if… You want a simple trading platform. Both exchanges offer super-simple trading platforms and mobile apps. This is great for beginners who are new to crypto trading and simply want to buy or sell crypto.You just want to buy Bitcoin or Ethereum.
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Both platforms offer access to Bitcoin and Ethereum, the two most popular cryptocurrencies on the market.You value security. Both platforms keep crypto assets offline and protect user accounts with FDIC insurance. If you value security when trading crypto, these platforms are for you.
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Final Word
Coinbase and Robinhood continue to be two of the most popular trading apps for cryptocurrency, and for good reason. Both offer a simple way to start trading for beginners, and both secure crypto assets with cold storage and data encryption to protect users’ funds.
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Coinbase is a full-service crypto exchange, offering more than just trading services. Users can earn rewards by staking their crypto, borrow against holdings with crypto-backed loans, and earn rewards through the Coinbase Learn program. And with access to over 160 cryptocurrencies (and counting), Coinbase has something for every trader.
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Robinhood is a newcomer to the crypto space, but stands out by charging no upfront fees on trades. Users can place simple market and limit orders to purchase crypto, but only have access to seven total cryptocurrencies.
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If you are looking to purchase Bitcoin, Ethereum, or one of the other handful of crypto options on Robinhood, it’s a decent choice. Coinbase is best for users who want to trade different types of crypto, as well as have the ability to borrow against crypto holdings, or take custody of their crypto assets.
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Robinhood is best for users who want to trade only the most popular cryptocurrencies, but don’t care to actually take custody of the coins they are invested in. Overall, you can’t go wrong with either platform, but we always recommend researching the top crypto exchanges to find the best fit for you. Crypto Invest Money TwitterFacebookPinterestLinkedInEmail
Jacob Wade
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