Robinhood is a typical stockbroker that also provides a small, but growing, selection of cryptocurrency alternatives. In contrast to Coinbase, which is a full-service cryptocurrency exchange, Robinhood primarily focuses on traditional stock trading.
In conclusion, Coinbase offers a greater range of advanced digital asset possibilities, including crypto-to-crypto trading and staking. However, Robinhood provides a good, affordable alternative to specialised cryptocurrency exchanges if you want access to other asset classes like equities in the same location that you trade crypto.
In order to choose between Coinbase and Robinhood, cryptocurrency consumers need take into account the following crucial factors.
The price to buy bitcoins is one benefit Robinhood has over Coinbase. It’s free on Robinhood. Cryptocurrencies are completely free to buy and sell, and unlike equities, they don’t yet follow the same pattern day trading regulations that apply to stocks. There will still be a spread to pay (the difference between the bid and ask price).
It’s important to remember that a Securities and Exchange Commission ruling issued in 2020 stated that Robinhood charged clients $34.1 million in “lower trading pricing” as a result. Not particularly crypto transactions, but rather Robinhood’s marketing and implementation as a whole, was the subject of the SEC probe. In order to resolve the claims, Robinhood consented to pay $65 million.
In contrast, Coinbase has a charge structure that varies greatly based on how much you’re purchasing in US dollars and how you’re paying for it.
Comparing costs is challenging since Coinbase doesn’t reveal them until right before your buy, but NerdWallet set up a few test transactions to get an idea of the range. The cost would typically be a flat $2.99 if you were purchasing $100 in bitcoin using a connected bank account. For bitcoin sales and purchases, Coinbase additionally levies a spread of around 0.5%; this spread is subject to alter based on market changes.
You can trade for cheaper, volume-based fees if you switch to the “Advanced Trade” area of your Coinbase account.
Overall, Coinbase costs can be perplexing, and to be honest, paying per trade seems a little out of date when other brokerages have been moving away from it for years.
However, Coinbase did introduce a direct deposit function in the first quarter of 2022 that enables users to choose a portion of their salary (either in USD or the cryptocurrency of their choosing) to be deposited into their Coinbase account each pay period. Users may choose how much of their paycheck they wish delivered to Coinbase, either as a monetary number or as a percentage, and this service is entirely free of charges. Users of Coinbase can also avoid trading fees by subscribing to the $29.99/monthly Coinbase One service.
In 2022, Robinhood increased its cryptocurrency offers, although its selection is still restricted when compared to Coinbase’s. More than 170 trading cryptocurrencies may be found on Coinbase, and even more can be added to price watch lists. Additionally, Coinbase often introduces additional trading coins.
Another category that Coinbase ought to automatically win is this one: Coinbase is a cryptocurrency brokerage and exchange that also offers a hosted wallet—and a personal wallet if you want it—while Robinhood is a stockbroker that dabbles in converting USD into cryptocurrencies.
Why does that matter? You may use Coinbase to purchase cryptocurrency with cash and then store it in a wallet that the company hosts. Or You may transfer those coins to your own Coinbase Wallet, which exists independently of the Coinbase app. You may also transfer them to a wallet that is not owned by Coinbase.
Additionally, Coinbase offers some cutting-edge features like staking, which enables you to earn rewards of up to 5.75% simply by holding particular cryptocurrencies. Additionally, you may exchange one cryptocurrency for another, something Robinhood does not allow.
In summary, Coinbase offers customers many of the features that cryptocurrencies were designed for in the first place, making it a great onramp for novice crypto users.
Robinhood added a feature in 2022 that lets customers withdraw cryptocurrency to their own wallets, but the service still lacks a lot of the features provided by Coinbase and its rivals.
Ease of use:
Both applications are simple, quick, clean, and easy to use, which makes sense given that both businesses rely heavily on transaction volume for income. They make more money when there are more buyers and sellers. Therefore, it is in their best interest to develop a product that encourages purchasing and selling, even in little quantities, and to remove any obstacles in the way of clicking the “purchase” button.
Although others contend that it shouldn’t be this simple for novices to trade in dangerous, speculative assets like bitcoin, the end result is a product that is good for beginners in that the purchase and sell procedure is reduced to the bare minimum.
So which is better, Robinhood or Coinbase?
Coinbase is the undisputed champion in this case when it comes to cryptocurrency. Although its costs can be complex and costly, if you have some experience trading on Coinbase Advance, those prices can be reduced. The free trading offered by Robinhood is excellent, but it can’t make up for the limited number of cryptocurrencies to invest in and the absence of crypto skills.
Given the free trades, Robinhood could be a better option if you value trading stocks and cryptocurrencies on the same platform or if you want to start with a limited number of carefully chosen digital assets.