Coinbase vs. Robinhood: Which one is better for cryptocurrency investing?
Coinbase and Robinhood are two of the most popular places to trade cryptocurrencies, but which one is better for you? The answer depends on your needs, especially on how much crypto trading you intend to do and the costs you’re willing to pay.
Coinbase and Robinhood may appeal to different kinds of traders, though there’s likely some significant overlap. Coinbase is a cryptocurrency exchange that targets traders deeply in the world of digital currencies. In contrast, Robinhood is a trading app that allows users to buy and sell stocks, ETFs, options and some types of crypto for no out-of-pocket cost.
Both companies have faced scrutiny from regulators in recent years. The Securities and Exchange Commission sued Coinbase in June 2023, alleging it had illegally operated as an exchange, broker-dealer and clearing agency, and offered and sold unregistered securities. The lawsuit said Coinbase knowingly violated securities laws that are designed to protect investors. Coinbase said it would continue to operate its business as usual.
In 2020, Robinhood agreed to pay $65 million to settle SEC charges that it misled customers over the payments it received from trading firms for sending customers orders to them. The SEC found that customers received inferior trade prices in aggregate of $34.1 million even after accounting for the lack of a commission. Robinhood did not admit or deny the SEC’s findings.
Here’s how Coinbase and Robinhood differ along a few other key dimensions.
Coinbase vs. Robinhood: Cost
The cost structure at Coinbase and Robinhood are significantly different, and it doesn’t help matters that Coinbase purposely obscures much of its fee structure from potential customers (though it does disclose them before you actually place a trade). That said, Robinhood is not exactly straightforward about how it’s compensated either.
The fee structure at Robinhood is simple, relative to Coinbase’s. In keeping with the broker’s “no commissions” model for stock and options, you won’t pay any cost directly out of your pocket for buying and selling crypto. Instead, the cost of trading is effectively rolled into a spread markup on the trade. So you’ll effectively pay more when you’re buying and receive less when you’re selling than if you received the best market price at the moment of your trade.
Coinbase’s fee structure is confusing, to say the least. Not only does it charge varying fees based on how much you purchase, it has a basic tier of service and an advanced tier, each of which have different fees. And recently Coinbase began to obscure the fees for its basic service, making it difficult for prospective customers to see how much they’re paying (Spoiler alert: prices are high if you’re buying just a little bit of crypto on the basic tier.)
For smaller transactions, you’ll pay a spread mark-up of 0.5 percent of your trade value plus a flat fee based on the size of your transaction.
Coinbase’s fee structure
| Transaction amount | Fee |
|---|---|
| $10 or less | $0.99 |
| More than $10 and up to $25 | $1.49 |
| More than $25 and up to $50 | $1.99 |
| More than $50 and up to $200 | $2.99 |
At the lowest levels, around $10, you’ll pay a fee that eats up nearly 10 percent of your purchase. But even at $200, you’re still paying a hefty 1.5 percent or so. And that’s on top of the 0.5 spread mark-up that’s already factored into the purchase or sale price.
At purchase amounts above $200, you’re still paying that 0.5 percent spread mark-up while a variable fee depends on your source of funds.
Coinbase funding fees
| Payment method | Fee |
|---|---|
| ACH | Free |
| Wire (USD) | $10 deposit fee; $25 withdrawal fee |
| Debit card | 3.99 percent |
If you opt to use Coinbase Advanced, the company’s higher service tier, you’ll be able to score lower overall fees, even if you’re trading with lower amounts. Coinbase Advanced is clearer about these fees, but the structure is scaled and depends on whether you’re adding liquidity (where the commission ranges from 0 to 0.4 percent of trade value) or taking liquidity (with commissions ranging from 0.05 to 0.6 percent).
Advantage: Robinhood, for the simplicity of its fee structure, even if its disclosure is no better than the one provided by Coinbase.
Coinbase vs. Robinhood: Available coins for trading
Coinbase supports trading in more than 200 different cryptocurrencies, including the biggies such as Bitcoin, Ethereum, Cardano, Solana, Dogecoin and more. So, you’re likely to find what you’re looking for and even plenty that you aren’t. Sure, Coinbase doesn’t offer thousands of other much smaller digital currencies, but that won’t matter for almost anyone but niche traders.
In contrast, Robinhood allows users to trade in just 15 digital currencies: Aave, Avalanche, Bitcoin, Bitcoin Cash, Chainlink, Compound, Dogecoin, Ethereum, Ethereum Classic, Litecoin, Shiba Inu, Stellar Lumens, Tezos, Uniswap and USD Coin. However, the app does give traders access to real-time data on these cryptos and others.
Advantage: Coinbase, for its much broader range of available coins.
Coinbase vs. Robinhood: Types of securities offered
When it comes to the type of securities being offered, Coinbase is all crypto, all the time. If you want anything else — stocks, ETFs, options — you’ll have to find it elsewhere.
In contrast, Robinhood offers a wider range of securities, including stocks, options, ETFs and cryptocurrencies, though it doesn’t offer bonds or mutual funds. Still, the app will reel in plenty of traders with what it does offer, so it can appeal to a wide audience even with a shallower pool of crypto.
Advantage: Robinhood, for its broader range of offerings.
Coinbase vs. Robinhood: Cryptocurrency custody
If you’re looking to handle custody of your crypto assets yourself, Coinbase is probably your best bet. The exchange offers its own wallet, but you can also take custody of the assets yourself through your own wallet. So you can pick the solution that fits your needs best, whether you’re looking for a hardware wallet or software wallet or you just want to leave it with Coinbase for trading.
Robinhood does offer Robinhood Wallet as an app that’s seperate from the core Robinhood platform. The app is a self-custody wallet that serves as the portal for storing and managing your crypto on networks such as Ethereum or Bitcoin.
Advantage: Coinbase has the edge here for offering more options. Though if you intend to trade frequently, this matters less.
Coinbase vs. Robinhood: Staking rewards
Coinbase and Robinhood also differ significantly when it comes to cryptocurrency staking, a process through which owners of cryptocurrency receive income on their holding. Staking is like earning interest on a bank account, though with significant differences and risks.
With Coinbase, users can stake their crypto assets, which are then used to validate transactions on the given currency’s blockchain. Currently, clients can earn staking rewards on dozens of crypto coins, including Ethereum, Tron and Cardano. Coinbase takes care of the technical details behind the scenes, and you earn additional coins for keeping your assets there.
Robinhood only offers staking on Solana as of May 2024. .
Advantage: Coinbase, for offering staking rewards on more coins.
Bottom line
Which company is better for you ultimately depends on your needs, but it’s fair to say that those focused heavily on cryptocurrency or many types of crypto will find Coinbase a better fit. On the other hand, those interested in a few popular crypto coins as part of a broader portfolio may prefer Robinhood, and they may even want to check out rival Webull, which also offers cryptocurrency trading.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
