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Governments typically control currencies around the world, but cryptocurrency is changing that. Cryptocurrencies are decentralized currencies not issued or sponsored by a country. Instead, they’re managed by computers that record transactions on a network called the blockchain.
You could use cryptocurrency as a payment method to buy and sell products or services as long as both parties agree to use the currency. Cryptocurrencies have also become a unique investment opportunity for people willing to take risks.
If you understand how to buy cryptocurrency and now want to trade crypto assets as an investment, you may want to set up an account with a cryptocurrency exchange. One of the best cryptocurrency exchanges to consider is Coinbase. But should you go with the standard Coinbase membership or their more advanced trading option, Coinbase Pro? Here’s the information you need to decide.
Coinbase vs. Coinbase Pro
Coinbase and Coinbase Pro are operated by the same company, Coinbase, Inc., which recently became a publicly-traded stock. But, surprisingly, the company doesn’t have a headquarters. Instead, the CEO describes Coinbase as a decentralized company.
Coinbase was founded in 2012 to enable people to send and receive Bitcoin safely. Today, both platforms — Coinbase and Coinbase Pro — allow people to buy, sell, send, receive, and exchange various cryptocurrencies.
| Coinbase | Coinbase Pro | |
| Mobile app | iOS, Android | iOS, Android |
| Fees | Trading fees:
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Trading fees:
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| Available cryptocurrencies | 170+ cryptocurrencies are currently supported in the U.S., including:
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170+ cryptocurrencies are currently supported in the U.S., including:
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| Best for... | People new to cryptocurrency who want to get their feet wet | Dedicated cryptocurrency traders serious about investing |
| Visit Coinbase | Visit Coinbase Pro |
How does Coinbase work?
Coinbase provides its users a place to buy, sell, send, or receive more than 170 different cryptocurrencies by using fiat currencies, such as the U.S. dollar (USD) or euro (EUR). They also allow you to convert cryptocurrencies from one to another for more trading options. Converting cryptocurrency is done in trading pairs, essentially pairing one cryptocurrency with another.
The service targets cryptocurrency beginners by offering a simplified platform for crypto trading. There aren’t advanced features you have to learn to use the platform, such as stop or limit orders. You don’t have to pay a fee to sign up for an account either.
To use the service, you could fund your account in several ways. You could fund your account with a bank transfer using either an ACH or wire transfer, but fees may be associated. Additionally, It might take some time for the funds to reach your account, so your cryptocurrency transactions might not be completed until your funds clear.
Coinbase does charge fees to use their cryptocurrency exchange. It updated its fee structure in March 2022 to reflect the future goals of the exchange. There is a taker fee for immediate trades placed at market price. This taker fee ranges between 0.05% and 0.60%, depending on the volume of your trades over the past 30 days. The exchange also charges a maker fee for trades that are not immediately matched by an existing order. These trades go into the order book until another customer makes a matching order. The maker fee ranges between 0.00% and 0.40%, depending on your trading volume.
... Or read our Coinbase review.
How does Coinbase Pro work?
Coinbase Pro, which the company renamed from its old GDAX brand, takes cryptocurrency transactions to the next level and targets more sophisticated investors. It isn't its own brokerage but is instead a different service that Coinbase offers. Surprisingly, there isn’t an extra one-time or subscription fee to sign up for a Coinbase Pro account.
Like Coinbase, Coinbase Pro supports buy, sell, send, receive, and conversion transactions. In addition, Coinbase Pro supports more than 170 cryptocurrencies, although some specific crypto pairs aren’t allowed in the state of New York.
Following the fee update on March 2022, Coinbase Pro now shares the same fee model used by Coinbase. Neither platform uses a flat or variable dollar-amount fee based on the payment type, which Coinbase used to do. Instead, it uses the same maker-taker fee model. This is the same percentage-based fee that changes based on the kind of buyer or seller you are. The fee percentage also decreases as the dollar-amount volume you trade over the previous 30 days increases.
The taker fee (for orders that take liquidity) is 0.60% if you traded less than $10,000 over the last 30 days, but it decreases to 0.20% if you traded $100,000 to $1,000,000 over the same period. For example, on a $5,000 transaction, the 0.60% fee would amount to $30, but the 0.20% fee would only amount to $10.
The maker fees (for orders that provide liquidity) are more favorable than the taker fees once you reach the $50,000 trading average over the last 30 days. The maker fee is 0.15% for traders with $50,000 to $100,000 in trades, while the taker fee is 0.25% for the same trade dollar amount range.
The Pro version of the crypto exchange provides features active traders likely want access to, including stop and limit orders rather than just market orders. This allows traders to use advanced strategies to execute their cryptocurrency transactions and hopefully earn more significant returns.
In addition, more detailed tools and information are available when using the Pro platform, including real-time order books, advanced charting tools, and trade history. Coinbase Pro even offers API access if you want to incorporate bot-based trading as part of your strategy.
What both cryptocurrency exchanges excel at
Both Coinbase and Coinbase Pro excel in a handful of shared areas.
No charge to open an account
Both Coinbase and Coinbase Pro let you open an account for free. So while you will incur fees when using both Coinbase platforms, you don’t have to pay a fee to start an account.
Low fees
Both Coinbase and Coinbase Pro offer the same low fees. Coinbase previously charged a flat or variable fee per transaction based on the payment method and transaction amount. Both services now use a maker-taker fee structure that offers the same fee range of 0.05% to 0.60% for takers and 0.00% to 0.40% for makers. The exact fee depends on the dollar amount of trades you make over the last 30 days.
Security
Cryptocurrency exchanges need to take security seriously, and both Coinbase and Coinbase Pro do this. All accounts use several security features. This includes two-factor authentication, which requires you to enter your username, password, and a code from your mobile phone to access your account. Without access to your phone for authentication, a hacker might be unable to access your account even if they know your password.
Coinbase works to store your cryptocurrency offline safely, also known as cold storage, which prevents potential theft from hacking. 98% of cryptocurrency funds are transferred to offline storage and secured in safe deposit boxes and vaults worldwide to avoid possible theft. Data is stored both on drives and paper backups, providing redundancy.
Some cryptocurrencies are stored online so the exchange could provide liquidity for trades. All online-stored currency is insured. Additionally, U.S. dollar cash balances held in a Coinbase account may be FDIC-insured if your money is stored in a U.S. bank. However, Coinbase may also opt to keep your cash in U.S. Treasuries and money market funds, which don’t provide FDIC insurance.
Cryptocurrency options
Both exchanges offer slightly different cryptocurrency options. That said, they both provide over 170+ cryptocurrencies.
5 important differences between Coinbase vs. Coinbase Pro
Coinbase and Coinbase Pro have differences that may make you choose one service over the other.
1. Functionality
Coinbase was designed for people wondering how to buy bitcoin and other currencies. It’s meant to be an option to help people get started with purchasing and selling cryptocurrency. As such, it is much simpler than Coinbase Pro. This ease of use might benefit new traders who don’t need to get overwhelmed with options when starting with cryptocurrency.
2. Whitelisting addresses
Coinbase Pro offers the option to add whitelisted cryptocurrency wallet addresses and private keys to an address book. Once you add addresses, you can only send cryptocurrency to those whitelisted addresses. This prevents accidentally sending money to an account you didn’t intend. Coinbase does not offer this feature.
3. Order types
Coinbase Pro offers access to order types that Coinbase doesn’t allow. Specifically, you could use stop orders and limit orders in addition to the standard market orders. Stop and limit orders give you more control over your cryptocurrency purchases and sales. This might be vital if you use cryptocurrency for active vs. passive investing.
4. API access
API access might not mean much to the average person. However, traders who use bots to make automated purchases and sales transactions need access to this technology. Coinbase Pro offers API access but Coinbase does not.
5. More trading tools
People looking to buy or sell cryptocurrency casually may not need access to the real-time order books, charting tools, and trade history Coinbase Pro offers. Users who want these tools would only get them with Coinbase Pro.
Which cryptocurrency exchange should you choose?
Choosing between Coinbase and Coinbase Pro might not be difficult for most people. People new to investing money who want to own some cryptocurrencies may want an easy way to buy and sell positions. Coinbase provides this without the added complexity of a professional trading platform, but it does charge higher fees for the service.
Coinbase Pro better fits active traders and serious investors who want to invest in cryptocurrency more in-depth. Their advanced tools, lower fee structure, and more advanced order types give more experienced investors additional options to attempt to earn a profit from trading cryptocurrency.
FAQs
Is Coinbase Pro as safe as Coinbase?
Coinbase and Coinbase Pro have similar safety features, but Coinbase Pro has one additional feature that adds extra security. Coinbase Pro users can store and whitelist cryptocurrency addresses. By using whitelisting, you can only send cryptocurrency to those addresses. This reduces the chance of unintentionally sending cryptocurrency to an incorrect address.
Can I transfer from Coinbase to Coinbase Pro?
Yes, transferring funds between Coinbase and Coinbase Pro is free and instantaneous. Both services do use separate digital wallets, though, so you have to actively transfer your funds.
Is Coinbase instant withdrawal?
Coinbase does support instant withdrawal of U.S. dollars if you have an eligible Visa Fast Funds or Mastercard Send enabled debit card. These withdrawals might take about 30 minutes in most cases but can take up to 24 hours. To use this service, there is a 1.5% transaction fee with a minimum fee of $0.55.
Is Binance.US cheaper than Coinbase?
Overall, the crypto exchange Binance.US does offer a lower fee structure than Coinbase. To start, there are no deposit fees with Binance.US. Binance.US charges two trading fees. The first is a spot trading fee of as much as 0.10%. They also have an instant buy/sell fee of as much as 0.50%.
These fees are compared to Coinbase’s 0.50% trading fee. Withdrawals made by wire cost $15 with Binance.US and $25 with Coinbase. Debit card deposit fees are higher with Binance.US, though, at 4.5% compared to Coinbase’s 3.99% debit card fee.
Bottom line
Buying and selling digital currency as an investment or using it to make purchases is a personal decision. First, you must decide if investing in digital assets is a good fit for your financial goals. If it is, then you have to determine how to make transactions with the cryptocurrency of your choice.
Both Coinbase and Coinbase Pro allow you to do this at a low fee. However, newer cryptocurrency investors looking to get their feet wet might be overwhelmed with all of Coinbase Pro’s options.
If you’re trying to decide between these two platforms, Coinbase may be better for people just getting started. At the same time, Coinbase Pro provides more in-depth features for more serious cryptocurrency investors or traders.
Disclaimer: All rates and fees are accurate as of Apr. 25, 2022.
FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.