Best Cryptocurrency Exchange App

Coinbase vs. Robinhood for Crypto: Which Is Best?

Coinbase vs. Robinhood for Crypto: Which Is Best?
Written by publisher team

A man checks his mobile phone for information about cryptocurrency

Coinbase, a leading cryptocurrency exchange, is often compared to Robinhood, a popular and innovative trading platform, in an effort to determine the best service for trading and investing in cryptocurrency. Both have simple apps that are easy to use for beginners. When comparing Coinbase and Robinhood to crypto, we take into account their fees, cryptocurrency selection, platform capabilities and uses to determine the best service for cryptocurrency investing and trading. Consider working with a financial advisor as you explore the ways cryptocurrencies can boost your investment portfolio.

What Coinbase and Robinhood Offered

Coinbase is the leading cryptocurrency exchange in the United States. It offers a wide range of cryptocurrency investments, many payment options, and advanced trader applications. If you are looking for analytical tools and technical trading apps, Coinbase is for you. Robinhood is an online brokerage that offers investments in stocks, ETFs, and options along with cryptocurrencies. It does not offer fixed income investments. It may be better for beginners to invest in cryptocurrency. Despite Robinhood’s strength in many areas, they did not offer a hosted wallet while Coinbase does. That changes in October 2021 when Robinhood begins testing wallets on its implementation.

Platform Features

Robinhood and Coinbase both have easy-to-use platforms that even beginners can use. At Robinhood, you can trade stocks, ETFs, options and you can buy cryptocurrencies. Coinbase deals in cryptocurrencies only. Robinhood can only be used on Coinbase US and can be used in over 100 countries and 49 countries. The most important difference between the two platforms is that if you are using Robinhood, you cannot transfer your coins from your account except to cash them unless you want to buy ETFs. Exchange Traded Funds is allowed. Finally, Robinhood allows limited orders and Coinbase does not unless you use Coinbase Pro.

Fees and Payment Methods

Someone like Robinhood walking in the woods

Someone like Robinhood walking in the woods

When you compare Robinhood to Coinbase’s fee structures, it seems at first glance that Robinhood has the simplest and cheapest fee structure. Robinhood offers a zero-commission fee structure for cryptocurrency purchases. However, you pay the difference between the buy and sell prices; Robinhood does not disclose what this cost.

Coinbase has a rather complex fee structure. With Coinbase, you pay for more services and more cryptocurrency options, so Robinhood is not as clear a winner in this category as it seems at first glance. For example, Coinbase charges a flat fee of 0.50% on the spread. Transactions typically cost 1.49% if you use a linked bank account or digital wallet and 3.99% if you use a debit or credit card. The fee of 3.99% is among the highest among cryptocurrency exchanges. The fee structure is lower and different if you are using Coinbase Pro.

Robinhood uses free ACH as a payment method. Coinbase has a variety of payment methods, including free ACH and the aforementioned payment methods.

Currencies and transaction types

Coinbase supports more than 64 cryptocurrencies. Robinhood supports only seven currencies. It supports Dogecoin, while Coinbase does not. Both systems allow the investor to buy fractional currencies. Robinhood only accepts US dollars for transactions. Coinbase accepts USD, EUR, and GBP.

Robinhood accepts specific orders for cryptocurrency and allows exchanges with ETFs. Coinbase accepts buy, sell, send, receive and exchange orders. Coinbase does not allow order limits unless you use Coinbase Pro.

security measures

Coinbase and Robinhood both use two-factor authentication. Both companies have Federal Deposit Insurance Corporation coverage: Robinhood has this coverage on all accounts, while Coinbase provides it on US accounts only.

Robinhood does not use a digital wallet to store coins, but Coinbase does. According to reports in mid-September, Robinhood announced that it will launch a local wallet testing program in October 2021.

bottom line

bitcoin concept drawing

bitcoin concept drawing

For novice investors, Robinhood may be the way to go. You can’t level up in Robinhood because you can only place orders and you have to sell your coins out of the app in order to liquidate them. If you are a novice investor using Robinhood, you can also invest in traditional stocks. Coinbase is a cryptocurrency exchange that provides a full service to its investors. It not only has a digital portfolio and a full set of trading options, but it also provides technical analysis tools geared towards intermediate and advanced investors.

Investment Tips

  • Do you need guidance on investing in cryptocurrencies? If you want to know how investing in cryptocurrency will affect your portfolio, you may want to talk to a financial advisor. Finding a qualified financial advisor doesn’t have to be difficult. The free SmartAsset tool matches up to three financial advisors in your area, and you can interview your advisors at no cost to determine which one is right for you. If you are ready to find a counselor, start now.

  • If you want to see how different types of investments will improve your portfolio, check this out SmartAsset Allocation Calculator.

Image credit: © iStock.com / Nicholas77, © iStock.com / ratpack223, © iStock.com / da-kuk

Beyond Coinbase vs. Robinhood for Crypto: Which is Better? It first appeared on the SmartAsset blog.

About the author

publisher team