Coinbase vs. Robinhood for Crypto- Best place to buy Crypto [Lowest fees, Highest Bonus]

Coinbase and Robinhood are two US-based cryptocurrency exchanges famous for their large trading volume. The Crypto marketplaces have easy-to-use mobile apps for beginners and fiat to crypto deposits. However, Coinbase and Robinhood are two distinct platforms with unique features.

Can’t decide whether to choose between Robinhood and Coinbase? Check out this analysis to help you decide which of the crypto exchanges will meet your need.

What is a Crypto Exchange?

A crypto exchange is a marketplace where buyers and sellers of cryptocurrency meet to carry out transactions. A crypto exchange is similar to a brokerage firm that serves as an intermediary for crypto trading. A crypto exchange facilitates the trading of crypto for fiat or crypto for another crypto. Cryptocurrency exchanges offer platforms to trade and online wallets for investors to keep their assets. Although a significant number of digital currency exchanges are centralized, there are decentralized, and hybrid crypto exchanges that ensure anonymity and trustless transactions. Centralized crypto exchanges are custodians in that they keep users’ funds and private keys with them. On the flip side, decentralized crypto exchanges ensure direct peer-to-peer exchange.

What to look for when buying crypto from an exchange?

With scores of crypto exchanges offering similar services for crypto enthusiasts today, it might be a little confusing to find the right fit. Now that you know what a crypto exchange is, there are certain factors to consider to make choosing the right exchange easy for you. Although you can buy, sell and trade on most exchanges, certain unique features differentiate one platform from the other. Knowing what you want in an exchange is crucial to achieving your goal.

• Fee

Different crypto exchanges have varied fee structures. A digital currency exchange typically charges a deposit fee, withdrawal fee, and maker-taker fee. However, some crypto exchanges deduct hidden fees that can compound and reduce your gain. You can track fees charge in the exchange you are considering before you make your decision.

• Crypto Supported

One of the most crucial factors to consider before deciding to sign-up on an exchange is if it has the coins or tokens you want. Most crypto exchange supports Bitcoin and Ethereum but if you want a more diverse wallet containing altcoins, you might need to research whether the exchange offers your interested coin. Crypto newbies might want to stick with Bitcoin or Ethereum until they get a hang of how a cryptocurrency exchange works, but advanced traders will want a diverse investment portfolio. Therefore, a crypto exchange offering limited number of coins will not work for an advanced crypto investor.

• Accessibility

Due to the decentralized nature of digital currencies, there are geographic limitations regarding crypto exchanges. Therefore, countries have varied legislations regulating the operations of cryptocurrency exchanges within their jurisdiction. Furthermore, there are cryptocurrency exchanges based in certain regions and are not available for residents of other countries or regions. Check if residents of your state can trade on an exchange before signing up on it.

• Security

Although reputable crypto exchanges offer an advanced level of security like offline cold storage, it is not the industry standard. A crypto exchange should provide at least 2FA, allowlist, password back up, and bug bounty. Even though assets on a crypto exchange are not FDIC insured, they have their peculiar insurance. More so, crypto exchanges offer additional security to protect investors’ identities and funds. If the crypto brokerage you are considering does not provide basic protection, you might lose your money to scams and hacks.

• Deposit Option

The ease of funding your account will encourage crypto trading and reduce the hassle of buying cryptocurrency. For instance, while some crypto exchange allows direct debit from users’ accounts, it does not enable transfer from another account. Choose a crypto exchange with multiple deposit options over those with limited means of purchasing cryptocurrency. Mostly, you can buy crypto through wire transfer, direct deposit, debit/credit card, PayPal, and other cryptocurrencies.

• Trading Volume

If you want to trade your cryptocurrency quickly without incurring slippage, choosing a crypto exchange with a large trading volume is better. You should check the liquidity of a crypto exchange before you sign-up on it. Needless to say that centralized crypto exchanges like Coinbase, Binance, and Kraken with custodial wallets have more liquidity than non-custodial decentralized exchanges. The rate of demand and supply on an exchange determines the price of a cryptocurrency. Therefore, look for a crypto exchange that is popular with high trade volume so that you can sell your asset at reasonable prices.

• Bonus and Rewards

Popular cryptocurrency platforms often offer promotions and discount for investors. You can benefit from a sign-up and referral bonus, as well as interest on crypto staking and saving. Some crypto exchanges also offer a discount on purchasing their native token and for investors with high trade volume. Check the rewards and existing promotions for your interested crypto exchange to enjoy.

What is the sign-up bonus on Robinhood?

Robinhood does not currently offer a sign-up bonus for new crypto investors. You can earn free stock when you open an account with Robinhood Brokerage, but Robinhood Crypto, which offers crypto trading services, does not offer a new user bonus.

Pros of Robinhood

Robinhood is not your typical cryptocurrency exchange because the brokerage firm is more of a stockbroker than a crypto trading platform. You can buy stocks and ETFs on Robinhood as well as a few selected digital currencies. Therefore, users who have dabbled into stock trading and want to test the waters in crypto investing will find Robinhood suitable for them. Robinhood Crypto offers very limited cryptocurrency including the two largest crypto by market- Bitcoin and Ethereum. Although the platform’s large trading volume is attractive, its commission-free trading makes it stand out.

• Zero commission on trading.
• Simple User Interface on both web and mobile app.
• Easy for beginners.
• Accessible to low-capital crypto investors with zero account minimum.
• Strong security with insurance and cold storage for a higher portion of crypto.
• Investors can oscillate between crypto and stocks trading.

Cons of Robinhood

• Limited crypto listed on the platform.
• Does not have the tools for advanced crypto trading. For instance, users have to pay for margin trading.
• It does not have educational resources, unlike Coinbase.
• Available for US residents alone.
• Users cannot send crypto from a different account to Robinhood.

What is the sign-up bonus on Coinbase?

Coinbase currently offers a $5 sign-up bonus for new users who verify their accounts. To be eligible, new Coinbase users must verify their account with either their licenses or authorized ID. You can also benefit from the new user sign-up bonus by adding a payment method and buying crypto on Coinbase.

New users who joined Coinbase using a referral link are offered a $10 BTC referral bonus but cannot benefit from the $5 sign-up bonus. New users must fund their accounts within the first 180 days of sign-up.

Pros of Coinbase

Coinbase is one of the largest cryptocurrency exchanges by trading volume. Coinbase is suitable to all manners of investors irrespective of their trading skill or capital. Newbies crypto investors wanting to trade with a little money can take advantage of Coinbase, Coinbase Pro, and Prime is for institutional investors and High Net Worth individuals. Through Coinbase Earn, investors can learn about specific cryptocurrencies and get rewarded with the same crypto they learn about.

• Investors can pay with cryptocurrency using Coinbase Visa cards and earn rewards.
• Over 100 cryptocurrencies are listed on the platform.
• Free on-ramp fiat to crypto conversion for Coinbase users.
• Coinbase offers rewards to beginners crypto investors who want to learn through Coinbase Earn.
• Simple user interface.
• Provides excellent security for investors’ funds, including cold storage, and insurance on assets.

Cons of Coinbase

• Coinbase charges high fees.
• Compared to Robinhood, Coinbase has limited customer service.

Robinhood vs. Coinbase- What is the Best Crypto Exchange?

If you are new to cryptocurrency or you just want to dabble into crypto trading, Robinhood, with its low fees and the simple user interface, is your best fit. However, if you want to trade altcoins, have diverse crypto portfolios, and do more with your crypto assets, Coinbase will better serve your needs. Consequently, the best crypto exchange depends on investors’ needs and priority.