Cryptocurrency, a digital currency that isn’t run by a government, is becoming more popular and mainstream every day. In some cases, cryptocurrency is even being used to make transactions, such as buying and selling goods. However, many people simply invest in cryptocurrency with the hope of big gains.
The easiest way to buy, sell, or trade cryptocurrency is to use a cryptocurrency exchange. BlockFi and Coinbase are both popular exchanges, but they have some important differences.
Here’s what you should know about BlockFi vs. Coinbase to help you decide if one is right for you.
BlockFi vs. Coinbase: A quick comparison
BlockFi and Coinbase offer the ability to buy, sell, and trade cryptocurrency but offer very different features. Here are the highlights to help you understand their overall offerings.
|Mobile app||iOS, Android||iOS, Android|
|Available cryptocurrencies||BlockFi offers these cryptocurrencies:
||Coinbase offers over 50 cryptocurrencies including:
|FDIC insured||No||FDIC-insured for U.S. dollar amounts|
|Best for...||Investors who want to maximize their cryptocurrency’s utility||Investors who want access to a wide variety of cryptocurrencies|
|Visit BlockFi||Visit Coinbase|
How does BlockFi work?
BlockFi was founded in 2017 by Zac Prince and Flori Marquez and is headquartered in Jersey City, New Jersey. It’s financially backed by several institutions, including Valar Ventures, SoFi, Coinbase Ventures, Fidelity, and more.
BlockFi is a cryptocurrency exchange that allows you to buy, sell, and trade cryptocurrencies. It offers a relatively limited selection of cryptocurrencies, but this selection does include some popular options including Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC).
Where BlockFi shines is the features it offers cryptocurrency investors. It allows cryptocurrency owners to take full advantage of their holdings with its helpful financial services and products.
BlockFi Interest Account
It offers a BlockFi Interest Account, which allows you to earn monthly compounding interest on the cryptocurrency you keep in the account. The platform claims you earn up to 7.50% annual percentage yield on your cryptocurrency.
You can also get loans backed by your cryptocurrency. These loans are offered with APYs as low as 4.50%. However, there’s a minimum loan amount of $10,000, and you need to pay a 2% origination fee. The platform allows you to borrow up to 50% of the value of your cryptocurrency. However, if your assets decrease in value, you’ll have to provide more collateral or the company may sell some or all of your cryptocurrency.
BlockFi Rewards Visa Signature Credit Card
BlockFi also offers a Bitcoin rewards credit card. The BlockFi Rewards Visa Signature Credit Card allows you to earn 1.5% back in Bitcoin on every purchase with no annual fee and no foreign transaction fees. This can be useful if you’re looking to earn Bitcoin rather than buy it.
Fees and security
BlockFi isn’t very transparent about the costs of buying and selling cryptocurrency on its platform. You don’t buy or sell directly with other individuals. Instead, BlockFi purchases or sells cryptocurrency itself and sets prices that are different from market prices.
The platform indicates the average spread is plus or minus 1% of the asset's spot price on average, but the difference could be materially higher in some instances. You get one free withdrawal per month, but additional withdrawals charge a fee based on the cryptocurrency being withdrawn.
BlockFi offers its users some helpful security features. You can enable two-factor authentication for your account, adding more security. They also support listing of withdrawal addresses to add an additional layer of protection.
...Or read our BlockFi review.
How does Coinbase work?
Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam and is currently a publicly traded company owned by its shareholders. It’s also a decentralized company with no official headquarters.
Coinbase is geared more toward active traders and investors by offering a wide range of cryptocurrency options and services. The basic Coinbase account may be suitable for people looking to get started in cryptocurrency. It allows you to buy and sell cryptocurrency directly from Coinbase rather than on an open exchange.
More advanced traders may prefer Coinbase Pro, which allows several order types on a cryptocurrency exchange with set fees based on your trading volume. The Pro version also has more advanced trading tools available.
Both Coinbase and Coinbase Pro allow you to keep your cryptocurrency with the platform. However, Coinbase also offers a cryptocurrency wallet app you can download separately from its main accounts. The wallet supports more than 500 tokens and digital collectibles. You don’t even have to have a Coinbase account to use the Coinbase Wallet app.
Similar to BlockFi, you can get loans backed by your crypto on Coinbase. It allows you to borrow up to 40% of your Bitcoin’s value at rates as low as 8.00% APR with no credit check or other fees. You can borrow up to as much as $100,000 and only pay the interest due each month. Unfortunately, this line of credit opportunity is available only to certain states.
Coinbase staking & earning
Coinbase also allows you to earn staking rewards on your crypto assets in its staking program. When you stake your crypto on Coinbase, you set aside a portion of your crypto holdings to help validate the transactions on a particular blockchain. You can then earn rewards in return. Rates of up to 5.00% APY are available, depending on the cryptocurrency you stake in the program.
In addition to the option of earning rewards with staking, you could earn cryptocurrency on Coinbase by learning about the various cryptocurrencies that exist. Simply watch a video, complete a quiz, and earn cryptocurrency for each quiz you complete. These quizzes aren’t available to everyone and are available only for a limited time so check your account to see what you can earn.
Although the Coinbase Card isn’t available yet, it’s coming soon. This debit card allows you to spend your cryptocurrency anywhere you could use a Visa debit card. There is no annual fee or sign-up fee. However, you do have to pay a 2.49% transaction fee when using your crypto balance to make purchases.
To help offset fees, the card offers up to 4% back in rewards when you make purchases. The more you use your card, the more rewards you earn.
Fees and security
Coinbase doesn’t openly disclose its fee structure anymore. Although it has in the past, it’s recently updated its website to state that fees will be determined by a combination of factors at the time of your order. These factors could include your payment method, size of the order, and market conditions.
Coinbase takes security seriously and highlights the steps it takes clearly on its website. Coinbase starts by keeping 98% of its customer funds offline in cold storage. Funds cannot be accessed over the internet, lowering the risk of fraud. All users must use two-factor authentication on their accounts, as well.
...Or read our Coinbase review.
What both cryptocurrency exchanges excel at
- Support common cryptocurrencies: BlockFi and Coinbase support some of the most popular cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH).
- Allow recurring trade scheduling: Both services allow you to set up recurring trades if you want to make regular investments in cryptocurrency over time.
- Allow you to earn interest on your cryptocurrency: BlockFi offers a BlockFi Interest Account that lets you earn up to 7.50% APY on your crypto. Coinbase offers staking and earning features, which allow users to earn interest or rewards on their cryptocurrency.
5 important differences between BlockFi vs. Coinbase
- Number of cryptocurrencies supported: Coinbase supports more than 50 cryptocurrencies, but BlockFi only supports a handful. Although both support some major cryptocurrencies, Coinbase’s more extensive selection could be important to cryptocurrency investors looking for the next coin before it explodes in popularity.
- Fees charged: Both BlockFi and Coinbase’s base service aren’t super clear about their trading fees. That said, Coinbase Pro offers a clear fee schedule you can review before trading. This gives some certainty to the costs you’ll pay when making trades.
- FDIC insurance: BlockFi does not offer Federal Deposit Insurance Corp. insurance. Coinbase may provide up to $250,000 of FDIC insurance on U.S. dollar amounts in qualifying bank accounts.
- Loan APRs: Both companies allow you to use cryptocurrency to back loans, but the APRs offered are different. BlockFi’s APRs can be as low as 4.50%, whereas Coinbase’s lowest APR is 8.00%. The lower APR could make BlockFi a better option if you’re interested in borrowing against your crypto balance.
- Multiple service levels: Coinbase offers Coinbase and Coinbase Pro to its users, whereas BlockFi only provides one level of service. Coinbase’s two options allow you to grow with the platform.
Which cryptocurrency exchange should you choose?
The right choice between BlockFi and Coinbase will depend on your unique situation. It’s a good idea to examine your goals with cryptocurrency as well as each platform’s features before coming to a conclusion about which is better for you.
If you’re focused on earning interest or staking rewards, look at the APYs paid by both companies for the coins you own. Then, choose the platform that offers the best rates. If you’re interested in borrowing against your cryptocurrency, BlockFi tends to provide better APRs. That said, Coinbase might be a better solution in some instances.
Coinbase offers more cryptocurrency options and two different services based on your needs if you’re solely interested in buying, selling, and trading cryptocurrency. Coinbase Pro also publishes its fee structure and provides advanced trading tools, which might make it a better choice for advanced traders.
Is Coinbase or BlockFi better?
Coinbase and BlockFi both allow you to buy, sell, and trade cryptocurrency. Overall, Coinbase offers more cryptocurrencies for investors as well as some helpful features. BlockFi offers fewer cryptocurrencies, but it provides some interesting features as well.
Ultimately, it’s a good idea to evaluate how you plan to use either company to help you decide which can better meet your particular needs.
Is BlockFi cheaper than Coinbase?
At this time, neither company directly shares their fee structures, and fees may vary based on many circumstances. However, Coinbase Pro does offer a fee schedule, which is worth noting if you’re deciding between Coinbase vs. Coinbase Pro.
Which fiat currencies does Coinbase support?
Coinbase supports a handful of fiat currencies. It accepts the following fiat currencies, depending on your location:
- U.S. dollar (USD)
- Euro (EUR)
- Pounds sterling (GBP)
Which fiat currencies does BlockFi support?
BlockFi does not support fiat currency within its accounts. Instead, you purchase stablecoin with USD deposits. Stablecoin has a one-to-one value with the U.S. dollar. Currently, BlockFi primarily uses GUSD, a stablecoin maintained by Gemini, as its default stablecoin.
What are some alternatives to Coinbase and BlockFi?
If Coinbase and BlockFi don’t seem like a good fit, there are other cryptocurrency exchanges you may want to consider, including Binance and Gemini.
Binance is the world’s largest cryptocurrency exchange. It allows you to quickly buy cryptocurrency with a credit or debit card, and also supports peer-to-peer crypto trading. The platform also offers cryptocurrency loans, ways to earn money on your cryptocurrency holdings, and a card that lets you convert and use your digital assets to make purchases.
Read our Binance vs. Coinbase comparison.
Gemini is another crypto exchange worth considering. It offers several cryptocurrencies as well as features that allow you to earn interest on your digital assets. The platform has also developed its own stablecoin, the Gemini dollar (GUSD), which BlockFi also uses. Gemini also offers a credit card that allows you to earn rewards in any cryptocurrency on its platform.
Read our Gemini review.
If you want to learn how to buy cryptocurrency, or more specifically, learn how to buy Bitcoin, both BlockFi and Coinbase might be good places to start. BlockFi has some fairly unique offerings, including its BlockFi Interest Account, low APR crypto-backed loans, and a credit card that pays rewards in Bitcoin. Investors looking to get the most out of their popular cryptocurrencies may benefit most from these services.
That said, investors who want an exchange that can grow with them may want to consider Coinbase, one of our top picks for the best cryptocurrency exchanges. Coinbase supports dozens of cryptocurrencies and offers two trading platforms. This provides investors with more options to meet their trading needs.