When cryptocurrencies rose to mainstream attention in 2017, a number of cryptocurrency exchanges suddenly propped up to meet the demands of traders who want to dabble in cryptocurrency trading. Cryptocurrency exchanges are one of the best ways if users want to look for a platform to trade for cryptocurrencies such as Bitcoin, Ethereum or Litecoin.
With so many platforms to choose from, it would be a daunting task for novice traders who are looking to buy Bitcoin and the such to select the exchange that is most suitable for them. Coinbase and Robinhood have become two of the more well-known cryptocurrency exchanges on the market, which are both trusted and focused on satisfying a trader’s needs.
This guide aims to provide more detailed comparisons of both of these crypto platforms so that you are able to make the best choice for your trading needs in this Coinbase vs Robinhood guide.
We will be comparing Robinhood vs Coinbase from several angles and will take into account their features such as trading fees, security, payment methods, supported currencies, their background information and reputation, level of customer service as well as simpleness of their web user interfaces.
Important Factors – Comparing Robinhood vs Coinbase
Reputation and background information
Getting to know the history of an exchange would be important to deduce whether the platform is actually a stable and safe choice for you to invest your coins in.
Users should go through cryptocurrency platform reviews or web reviews conducted by independent third parties to look for information that the platform may not offer on their own website such as any hacks or theft experienced by the exchange.
Fees usually vary from trading platform to platform and they also matter to a degree to the type of buyers, whether users are planning to buy in larger volumes or more intervals.
As such, there would be different fees from each trading platform incurred on buy and sell transactions, deposits or withdrawals, payment methods used, and even fees incurred on the trading pairs between fiat currencies and cryptos.
Most exchanges also use a similar fee structure which decreases the more you trade over a 30-day trading volume. So it is up to you to go through their fees offered to see if you are comfortable with their charges.
In this Coinbase vs Robinhood guide, another important aspect that surrounds the volatile world of crypto will be the level of security offered by the cryptocurrency exchange. Any decent platform would most likely provide a certain level of security protocols in order to protect its users’ accounts from theft or hacking.
There are a few security features you should be looking out for which includes two-factor authentication, storing of assets on hardware wallets, insurance and also an SSL encrypted website.
User Interface Navigation
Most crypto exchanges like Robinhood and Coinbase put a lot of effort into ensuring that the user interface on their website is easy to use and not a headache for its users.
However, there are platforms out there that actually tend to focus on providing more complicated and advanced features to its users such as Futures trading, margin trading, charting tools to minimise risk and such. It would be important to decide what features you require before selecting an exchange to trade on.
When comparing Robinhood vs Coinbase, you want to make sure that the coins that you actually want to trade in are supported and available on the platform.
Although you can be sure that the major and well known cryptocurrency exchange like Robinhood and Coinbase would support the main coins such as Bitcoin and Ethereum, you should look out from Bitcoin trading pairs that they offer. For example being able to make a bank transfer of USD from your Bank account into Robinhood or Coinbase in exchange for crypto such as Bitcoin.
On the surface, this factor is a no brainer as a higher user count for any exchange would usually mean that the balance of supply and demand of its users are being met. What this means is that when you sell Bitcoin, there is a lesser wait time and you will not experience buyer lag when you buy Bitcoin.
Another rather important aspect of this comparison of Coinbase vs Robinhood would be their customer support. Sometimes users may face problems or have questions, and it will be reassuring to know that they have a dedicated support page that will be there to answer any queries you might have.
Coinbase vs Robinhood
Background Information and reputation
Coinbase is one of the leading crypto exchanges in the US and was founded back in 2012 as a fully regulated and licensed exchange. Coinbase started off by only being allowed to trade with Bitcoin but has begun adding additional coins such as Ethereum and Litecoin.
Back in 2020, when high profile Twitter accounts were hacked such as Apple and Bill Gates asking people to donate Bitcoins to them, Coinbase made an active move to stop around 1,100 customers from sending Bitcoin to these people worth roughly $280,000. As such it is an impressive form of customer service even though it was the fault of its users.
Robinhood was founded back in 2013 and marketed themselves as a US-based zero fee discount broker and is regulated by the top financial authorities such as the US Securities and Exchange Commission as well as the Financial Industry Regulatory Authority (FINRA).
The Robinhood brokerage service also offers Cash Management to its clients on top of the traditional crypto trading and has announced its commitment to bringing high transparency and clarity to its users which includes both brokers and partners.
In 2021, it was selected as the “Best free stock trading platform” and “Best app for stock trading” by Broker Chooser. The decision was backed up by deep analysis performed by over 70 online brokers that tested their accounts with Robinhood.
As such, both Coinbase and Robinhood have solid backgrounds and reputation that cements them as one of the best cryptocurrency exchanges around.
Coinbase has a fee structure that could be a little confusing but it could be easily broken down as below. Whenever you purchase any cryptocurrencies from Coinbase there are two main portions that consist of what you pay, the first one being a market price based on Coinbase Pro +0.5% and a higher amount of either a flat transaction fee for transactions below $200 or a percentage of the transaction.
With that being said, Coinbase charges most of its transaction fees at about 1.49% for a standard buy and for credit card buys, the fees are 3.99%.
Any deposits you wish to make on Coinbase are free only if you deposit using ACH transfer from your bank account but otherwise would cost $10.
On the other hand, Robinhood offers a free service and charges no commission and fees. However, it earns its revenue by selling your order flow which is the right to fill your order to wholesale market makers so it is not truly free.
Robinhood does offer a premium service which is Robinhood gold which costs only 5$ which gives its users access to Morningstar reports, margin trading which has a 5% annual interest, and also streaming quotes.
Robinhood offers free of charge on all features including deposits, stock training, ETF trading, Options Base, Options per contract, mutual fund trading and broker assisted trades.
Since when you are comparing Coinbase vs Robinhood in terms of fees, it would be quite difficult to make a concrete assessment since both of them use a different trade fee structure for their coins. If you take into account Coinbase Pro however, then Coinbase Pro would actually have an edge over Robinhood.
On Coinbase Pro, you would be able to find prices and fees that are more than 10% lower compared to Robinhood but Coinbase does not account for how much you need to pay in order to make a successful trade.
This is because Coinbase Pro has a structure that is account tiered and rewards larger traders with more incentive discounts when trading their Bitcoin. Because of this, Coinbase actually offers a more flexible fee structure compared to Robinhood.
As such, if you are looking purely from a fees perspective Robinhood offers a much attractive platform.
If you are storing your money and assets on any cryptocurrency trading platform, it is important to note that it is never 100% safe to store them on either Coinbase or Robinhood since there is always some degree of risk involved
With that being said however, Coinbase is still one of the best crypto trading platforms that you can use as according to their website, almost 99% of invested assets are stored in offline physical storages. This means that hackers are not able to obtain your investments since they are stored in a physical location – at most the result of successful hacking would only result in lost information.
Coinbase only stores 1% of its assets on their crypto platform online in a hot wallet system to ensure liquidity. This 1% is also covered by insurance in the event of any losses, so as such it is highly unlikely that you would lose any of your investments if you store, buy and sell with Coinbase.
Robinhood on the other hand has decent security protocols in place, however compared to Coinbase it is missing a key piece which is having insurance covered on their assets. Their mobile app users are given the choice to log in with a biometric facial or fingerprint detection as well as using a custom pin.
Robinhood also offers two-factor authentication and new logins from any unrecognized devices also need to be verified with a 6 digit code that is sent via a text message or email in case its users do not enable two-factor authentication.
Overall, Coinbase does offer better security and protection of its account user assets and personal information.
In terms of simplicity, Coinbase has one of the easiest starting options to allow new accounts to be registered on their website. It is an easy ramp to investing in cryptocurrencies as Coinbase gives its investors an easy way to sign up and buy cryptocurrencies easily and within a matter of minutes.
Coinbase also has a dedicated section that offers a learning program that pays its account users cryptocurrency to learn and get more information about how crypto generally works.
Robinhood offers a very intuitive UI and has recently announced that it is focused on making their webpage a safe environment to trade and invest. Robinhood is more focused on the mobile app market but its website is still streamlined and easy to understand.
Overall, both Coinbase and Robinhood have easy to use and navigable user interfaces and both do not have a clear edge over the other
Coinbase is a platform that supports over 30+ cryptocurrencies while Robinhood currently only offers support on 17 types of crypto which is announced on their website. As such, in this case the disparity should not really influence the decision you are making although Robinhood offers slightly fewer support on coins.
Both exchanges however still support the main well known cryptos such as Bitcoin, Ethereum and Litecoin. You would probably not even invest in all of the cryptocurrencies that are available on either Robinhood or Coinbase anyway unless you are a institutionalised investor
As mentioned previously, user count is a very public figure in which you can use to deduce whether a platform is actually trustworthy enough. With that said, both Coinbase and Robinhood actually have similar numbers of users both at a little over 13 million bitcoin traders as of 2020. This should be a clear sign that there is positive sentiment and good will of traders trusting both Coinbase and Robinhood as fair and transparent exchanges.
Robinhood’s customer service is done via the app or the Robinhood official website. One downside is that they do not actually possess a telephone number so you are not able to contact Robinhood directly. Instead Robinhood makes you go through an extensive process to narrow down your support issue and then enter your phone number for a callback.
The only other way is to place a trade through a live broker for $10 but they would not offer help outside of trading.
Coinbase has a low rating of 1.67 stars out of 281 reviews which means that most of their users are generally dissatisfied with their purchase experience. Most of the issues which investors face when dealing with this platform is actually related to payments using bank transfers or credit card problems.
Overall conclusion: Coinbase vs Robinhood. Which one is better?
Overall, when comparing Coinbase vs Robinhood would actually remain the best for newer investors into the crypto scene who only wish to invest in a small amount of money which include fractional shares. Their mobile app is actually easily navigable and makes it simple for beginners to find out.
Otherwise if you are a more serious and experienced trader who is looking to make larger volumes of trade, you would want to take advantage of the features Coinbase has to offer as they provide discounts the more you trade as well as offering better security overall compared to Robinhood.
With over 10 years of experience working as a financial analyst, Eric is highly aware of the potential of cryptocurrency, particularly Bitcoin, and the impact it will bring towards the global economy. He is committed to share everything he knows about crypto here at Crypto Digest News.