Coinbase vs. Robinhood

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Both Coinbase and Robinhood are popular trading apps for buying cryptocurrency. While they both offer user-friendly interfaces and access to popular crypto like Bitcoin (BTC) and Ethereum, these platforms are vastly different in terms of their features and capabilities.

Coinbase was founded by Brian Armstrong and Fred Ehrsam in 2012. It is the largest centralized exchange in the U.S. (by volume), supporting the top cryptocurrencies on the market. The intuitive app and ability to buy crypto with a credit card have made it simple for new investors to get started.

Robinhood was founded in 2013 by Baiju Bhatt and Vladimir Tenev to give everyday retail investors access to low-fee trading. The Robinhood app is known for its easy-to-use interface and ability to help new investors venture into trading. In 2018, they launched the ability to purchase Bitcoin and have since added a few more popular cryptocurrencies to their platform.

While there are quite a few differences between Coinbase and Robinhood, the main one is the number of available cryptocurrencies for purchase. Coinbase is a crypto-only platform that has access to over 40 cryptocurrency options (and adding more monthly), while Robinhood is a stock-first platform with access to only seven cryptocurrencies (as of March 2021).

We’ve reviewed both platforms based on their supported currencies, security, fees, features, and more, so you can decide which option is right for you.

Coinbase vs. Robinhood: How Do They Compare?

Coinbase


Coinbase

Coinbase

What We Like
  • FDIC insured up to $250K

  • Available in 100 countries

  • Free user education library

What We Don’t Like
  • High purchase and trade fees

  • $2 minimum order amount

Robinhood


Robinhood

 Robinhood

What We Like
  • No trading fees

  • Easy-to-use mobile app

What We Don’t Like
  • Can’t trade or withdraw crypto

  • Lack of transparency about costs (payment for order flow)

Coinbase vs. Robinhood: At a Glance

  Coinbase Robinhood
Features Simple interface

Buy, sell, and exchange crypto

Credit card purchases available
No-fee trades

Simple interface

All-in-one option for crypto and stock trading
Fees 0.50% per trade

Additional 1.49% for bank account or Coinbase

Wallet purchases

Additional 3.99% for debit or credit card purchases

$10 deposit

$25 withdrawal fee for wire transfers 
0% fee for buying and selling crypto

Cost of buying crypto may be marked up a significant amount due to payment for order flow 
Number of cryptocurrencies supported Over 50 cryptocurrencies supported  7 cryptocurrencies supported 
Security features 2FA via SMS or Google Authenticator app

Cold storage and multi-signature wallets

USD balances are FDIC insured (up to $250K)

KYC and anti-money laundering protections in place 
2FA via SMS or Google Authenticator app

Cold storage of crypto

USD balances are FDIC insured (up to $250K)

Biometric access controls on app 
Types of transactions Buy

Sell

Exchange

Send

Receive 
Buy

Sell

Limit order 

Coinbase vs. Robinhood: Ease of Use

Coinbase gives users a simple way to sign up, connect their financial accounts, and buy crypto via its app. You can register for Coinbase with an email address and password and, once signed up, you will need to verify your identity with a government-issued photo ID by uploading a picture of it to the app or website. Once verified, you can connect a bank account or credit card to immediately begin purchasing crypto.

Robinhood is equally simple to use. The user-friendly app allows users to quickly see the price of crypto, and place an order with a few clicks. To sign up for Robinhood, create a free account using your email address and a password. Once you verify your email address, secure your account with two-factor authentication. To deposit funds, simply connect to a bank account and transfer funds. Up to $1,000 is instantly available for purchasing cryptocurrency.

While deposited funds are available for purchasing crypto, they cannot be withdrawn until the transaction clears. This may take up to seven business days on either platform.

Coinbase vs. Robinhood: Security

Coinbase and Robinhood both offer robust security features, but Coinbase goes the extra mile to secure your crypto. Here are a few of the security options available on each platform:

Coinbase Security Features

Two-factor authentication: Coinbase offers two-factor authentication (2FA) via SMS or the Google Authenticator app, which both require a time-sensitive passcode to access your account. 

Built-in wallet: The Coinbase digital wallet, a password-protected wallet that also uses an encrypted 12-word recovery phase, allows users to withdraw their cryptocurrency from Coinbase. It also allows users to store and trade their crypto on decentralized exchanges.

Cold storage and crypto vaults: Coinbase stores 98% of all crypto balances in “cold storage,” keeping these currencies disconnected from the internet. This helps protect your assets from online theft.

Coinbase also offers a cryptocurrency vault, further securing your stored digital assets. These vaults can be set up to require multiple user approvals before funds are withdrawn.

FDIC insurance (up to $250K): Similar to a traditional bank, Coinbase offers FDIC insurance on USD (U.S. dollar) deposits up to $250K. Note, however, that this does not insure your cryptocurrency funds.

Identity verification: Coinbase complies with the Know Your Customer (KYC) standards in the U.S., verifying a photo ID and address of customers to secure their account further.

Robinhood Security Features

Two-factor authentication: Robinhood requires 2FA via Google Authenticator. SMS account recovery is disabled to avoid hacking via phone. 

Device management: Robinhood allows you to review all the devices that have accessed your account, and remove any that you don’t recognize.

Cold storage: Robinhood states that most of their cryptocurrency is stored offline (though it doesn’t say what percentage). 

FDIC insurance (up to $250K): Robinhood offers FDIC insurance on USD deposits, but note that it does not insure your cryptocurrency funds. 

Coinbase vs. Robinhood: Features

Coinbase and Robinhood both allow users to buy crypto, but they are fundamentally different types of platforms. Robinhood acts more as a broker for crypto purchases while Coinbase is a full exchange with far more capabilities. Here are a few of the unique features on each platform:

Coinbase Unique Features

Trade or withdrawal crypto: Coinbase allows users to trade their crypto for another crypto directly on their platform. It also allows users to withdraw their crypto to a digital wallet to use on decentralized applications and investing.

News articles: Coinbase has a news feed built into their platform, keeping users updated on the world of crypto. These articles are specific to the crypto you are looking at within the app.

Price alerts: Coinbase allows you to create a watchlist of cryptocurrencies that will give you price alerts. When the price of a crypto goes up or down by a large percentage, the alert will be pushed to your mobile device, or show up in your Coinbase notifications.

Built-in education: Coinbase has user education built into their platform and mobile app. These educational videos teach users about a certain cryptocurrency project and will even reward them with a small bonus amount of the currency.

Robinhood Unique Features

Limit orders: Robinhood allows users to place a limit order on their crypto—an order placed to buy or sell a specified amount of crypto at a specified price or better. This gives investors more control over their orders.

No-fee trades: Robinhood does not charge fees when buying or selling crypto. While the purchase price may not be exact due to payment for order flow, no trade fees is a nice perk for investors.

Coinbase vs. Robinhood: Currencies

Robinhood offers a very limited selection of crypto, including Bitcoin, Ethereum, and Dogecoin (seven total crypto supported). Coinbase, on the other hand, offers over 50 of the top cryptocurrencies and is constantly adding to their listings.

Both platforms allow you to purchase cryptocurrency in dollar amounts, so you can buy fractions of coins. Coinbase has a $2 minimum order amount. Robinhood, on the other hand, measures its minimum purchase amount in the native token. For example, the minimum Bitcoin purchase amount is 0.00001 Bitcoin (BTC). So if Bitcoin's price is $60,000, you can purchase as little as $0.60 of Bitcoin.

To explore more currencies on Robinhood, review their cryptocurrencies investing page. To view all the tradable assets on Coinbase, check their listing prices.

Coinbase vs. Robinhood: Fees

Robinhood claims “no-fee trading” for both stocks and crypto. And while this may technically be true, Robinhood was under scrutiny in 2019 for their practice of payment for order flow. Essentially, all trades are brought to market makers to execute the trade, who pay Robinhood a fee, typically a percentage of the trade. The exact amount for crypto trades is not disclosed.

Coinbase, on the other hand, charges a flat fee of 0.50% for transactions, and additional fees based on which method of payment was used. These fees are fairly high.

Here is a breakdown of how Coinbase and Robinhood charge fees based on account type:

Account Coinbase Fees Robinhood Fees
U.S. Bank Account 1.49% 0% fee
Wallet 1.49%  N/A 
Credit/Debit Card Buy 3.99% N/A 
Instant Card Withdrawal Up to 1.5% of any transaction and a minimum fee of $0.55  N/A
ACH Transfer Free Free
Wire Transfer $10 ($25 outgoing)  N/A 

Robinhood is the leader in no-fee trading but it does charge a payment for order flow, which may end up costing you more to buy your crypto through them, depending on the trade. The lack of transparency around these fees makes it difficult to compare fee structures between the two services.

Overall, Coinbase is on the higher-end of fee structures for buying and selling crypto while Robinhood can be less expensive, depending on the trade.

Coinbase vs. Robinhood: Access

Coinbase is available globally in just over 100 countries around the world. Robinhood is only available in the United Stated (as of March 2021).

Coinbase is offered legally in all 50 states in the U.S., while Robinhood is only available in 47 states. They are actively working to add the final three states of Nevada, New Hampshire, and West Virginia.

Each country has its own regulations around cryptocurrency. Be sure to review your local guidelines before buying or selling crypto.

Final Verdict

There are several similarities between Coinbase and Robinhood. For example, both are U.S.-based companies; both offer access to Bitcoin; and both are secure places to buy and sell crypto.

Although Robinhood offers no-fee trading, it does charge a payment for order flow, which might inflate the price of your crypto purchase. It also allows limit orders for more control over your trading. But Robinhood is simply a custodian of your crypto; you can never own the actual coins or withdraw them to store in your own digital wallet.

Coinbase is a true cryptocurrency exchange that is great for beginners due to its minimalist design and comprehensive mobile app. Buying and selling crypto on Coinbase only takes a few clicks, and your digital funds are safely stored at all times. You can also trade and transfer your crypto to your own digital wallet, giving you full control of your cryptocurrency.

No matter which platform you choose, understand that investing in cryptocurrencies is highly speculative. Never invest more than you are willing to lose.

Coinbase vs. Robinhood FAQ

What Are Coinbase and Robinhood?

Coinbase and Robinhood are platforms designed for buying and selling cryptocurrencies. Robinhood acts as a custodian where you can buy and sell crypto, but you cannot access the coins or remove them from Robinhood. 

Coinbase, however, is a true exchange, allowing you to trade crypto for other crypto and withdraw your coins into a digital wallet.

How Do Coinbase and Robinhood Work?

Robinhood is an online broker and allows you to buy and sell crypto. Coinbase is an online exchange and allows you to buy, sell, trade, and withdraw your crypto.

For both platforms, signing up is a fairly similar process. Users create an account and add funds via a standard financial account (or card) to purchase cryptocurrency. But Coinbase allows users to exchange one crypto for another or move their funds to a digital wallet for interacting with other crypto-based applications

When buying Bitcoin with Robinhood, the platform would act as a broker for the transaction. You would create an account, connect your bank account, and submit an order to purchase BTC. You are exchanging USD for BTC, and Robinhood stores that BTC for you until you decide to sell it.

It’s a similar process on Coinbase, except when buying Bitcoin on Coinbase, you have access to trade that Bitcoin for another crypto or move it off Coinbase to your digital wallet.

Should I Use the Coinbase Wallet?

While Robinhood does not offer a digital wallet (as of March 2021), the Coinbase Wallet is a popular choice for exchanging crypto and can be used on many decentralized applications. If you are looking to trade cryptocurrency, or simply hold the keys to ones you already own, Coinbase Wallet is a secure way to store them. It is also ERC-20 compatible, allowing you to trade your crypto on your favorite decentralized exchange.

Who Should Use Coinbase vs. Robinhood?

Robinhood is best for investors who want exposure to Bitcoin but don’t have a need to own the actual currency. It is also ideal for customers who want their stock trading and crypto trading all in one application.

Coinbase is ideal for beginner investors who are just getting started with cryptocurrency but want full access to their currency. With its easy onboard and intuitive interface, as well as the ability to trade between currencies (and even move them off the platform), it’s simple to buy cryptocurrency and have control over your investments. Add in their user education section and crypto bonuses, Coinbase is a great choice for new cryptocurrency investors.

How We Evaluated Coinbase vs. Robinhood

When reviewing Coinbase vs. Robinhood we compared each platform based on ease of use, fee structure, security, unique features, and support currencies. We also took into account the types of trades available on each platform and their relative cost to the wider cryptocurrency exchange market. 

While Coinbase and Robinhood are both user-friendly apps for buying crypto, they are two different types of platforms. Coinbase is a true crypto exchange and is best suited for crypto investors who want more access to crypto investing options as well as full control of the currency they purchase. Robinhood is a simple investment broker that is better suited for casual investors who want to buy one of their seven crypto offerings for investment purposes only. 

Both platforms are fairly limited in their trading capabilities, so advanced crypto traders would be better suited with another exchange option.