Coinbase vs. Robinhood for Crypto: which is better?

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Coinbase, a leading cryptocurrency exchange, and Robinhood, a popular and innovative trading platform, are often compared to try to determine which is the best service for trading and investing in cryptocurrency. Both have simple and beginner friendly apps. When we compare Coinbase and Robinhood for crypto, we take into account their fees, cryptocurrency selection, platform capabilities, and uses to determine which service is best for crypto investing and trading. -cash. Consider working with a financial advisor as you explore ways cryptocurrencies could improve your investment portfolio.

What Coinbase and Robinhood Offer

Coinbase is the leading cryptocurrency exchange based in the United States. It offers a wide range of cryptocurrency investments, numerous payment options, and advanced trading applications. If you are looking for analytical tools and technical trading applications, Coinbase is for you. Robinhood is an online brokerage firm that offers investments in stocks, ETFs and options as well as cryptocurrencies. It does not offer fixed income investments. Perhaps this is best for those new to cryptocurrency investing. Even though Robinhood is strong in many areas, it did not offer a hosted wallet unlike Coinbase. That changes in October 2021 when Robinhood begins testing wallets in its app.

Platform features

Robinhood and Coinbase both have user-friendly platforms that even newbies can use. On Robinhood, you can trade stocks, ETFs, options, and buy cryptocurrencies. Coinbase only deals in cryptocurrencies. Robinhood can only be used in the United States. Coinbase can be used in over 100 countries and 49 states. The most important difference between the two platforms is that if you are using Robinhood you cannot move your coins from your account except to cash them out unless you want to buy ETFs. It allows trading against ETFs. Finally, Robinhood allows limited orders and Coinbase doesn’t, unless you’re using Coinbase Pro.

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Fees and payment methods

A person resembling Robinhood walking in the woods

When you compare the Robinhood fee structures to Coinbase, Robinhood at first glance appears to have the simplest and cheapest fee structure. Robinhood offers a commission-free fee structure for cryptocurrency purchases. However, you pay the difference between the buying and selling prices; Robinhood is not disclosing what it costs.

Coinbase has a fairly complex pricing structure. By using Coinbase, you are paying for more services and more cryptocurrency options, so Robinhood is not as clearly a winner in this category as it might at first appear. For example, Coinbase charges a flat fee of 0.50% for 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 3.99% fee is one of the highest among crypto exchanges. The fee structure is lower and different if you are using Coinbase Pro.

Robinhood uses Free ACH as a payment method. Coinbase offers a variety of payment methods, including the free ACH and the payment methods listed above.

Currencies and types of transactions

Coinbase supports over 64 cryptocurrency coins. Robinhood only supports seven coins. It supports Dogecoin, unlike Coinbase. Both platforms allow an investor to purchase split coins. Robinhood only accepts US dollars for transactions. Coinbase accepts US dollars, euros and pound sterling.

Robinhood accepts limit orders for cryptocurrencies and allows trading with ETFs. Coinbase accepts to buy, sell, send, receive and exchange orders. Coinbase does not allow limited orders unless you are using Coinbase Pro.

Security measures

Coinbase and Robinhood both use two-factor authentication. Both companies are covered by the Federal Deposit Insurance Corporation: Robinhood has it on all accounts, while Coinbase only has it on US accounts.

Robinhood doesn’t use a digital wallet for coin storage, but Coinbase does. According to reports in mid-September, Robinhood announced that it would launch a home wallet testing program in October 2021.

The bottom line

Bitcoin concept graphic

For first-time investors, Robinhood is probably the way to go. You can’t climb that high on Robinhood because you can only place orders and you have to sell your coin outside of the app in order to liquidate them. If you are a newbie investor using Robinhood, you can also invest in traditional securities. Coinbase is a cryptocurrency exchange that offers full service to its investors. Not only does it have a digital portfolio and a full range of trading options, but it also offers technical analysis tools aimed at middle and advanced investors.

Tips for investing

Do you need advice on investing in cryptocurrency? If you want to know how an investment in cryptocurrency would impact your portfolio, you might want to talk to a financial advisor. Finding a qualified financial advisor doesn’t have to be difficult. SmartAsset’s free tool connects you with up to three financial advisors in your area, and you can interview your correspondents free of charge to decide which one is best for you. If you’re ready to find an advisor, start now.

If you want to see how different types of investments would improve your portfolio, check out SmartAsset’s asset allocation calculator.

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

The Coinbase vs. Robinhood for Crypto: which is better? first appeared on the SmartAsset blog.

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