Cryptocurrency can feel like a daunting asset class, especially if you’re relatively new to it. An easy-to-use exchange where you can use your traditional currency to make a crypto purchase might help you ease into it, allowing you to buy coins and then learn more about digital assets while you decide what to purchase next.
Coinmama provides a simple way to purchase cryptocurrencies with a credit card, debit card, or bank wire transfer. This Coinmama review will take a look at what you can expect from the exchange and help you decide whether using Coinmama is right for you.
What is Coinmama?
Coinmama was founded in 2013 by Ilan Schuster, Laurence Newman, and Nimrod Gruber. The company is based in Ireland and is a subsidiary of a company called New Bit Ventures Ltd. Coinmama is registered with the Financial Crimes Enforcement Network.
The Coinmama.com website is simple and focuses on making it easy to purchase a limited number of digital currencies with fiat money such as the U.S. dollar (USD), and it also serves as a place where you can sell bitcoin. There aren’t any advanced services and there’s no way to hold your coins on the exchange.
|Withdraw to bank account
|Direct buying and selling with Coinmama
|White glove customer support for businesses and high net worth individuals
|Best for …
|Cryptocurrency beginners and others who want an easy way to buy crypto, especially bitcoin and ether, with fiat currency
What does Coinmama offer?
Coinmama operates in a straightforward manner to allow you to buy cryptocurrencies using fiat currency. That’s the only service that Coinmama offers to most individuals. For those looking to learn how to buy cryptocurrency, this crypto exchange makes it easy. All Coinmama users need to do is have a payment method such as a Visa or Mastercard credit or debit card, and you can buy coins, store them, and wait to see if they increase in value.
Coinmama doesn’t offer a dedicated wallet. Instead, when you buy crypto using the site (or the Android app), the coins are sent to your external wallet. As a result, you need to have your own crypto wallet that’s compatible with the coins you want to buy before you attempt to use Coinmama.
Rather than being an exchange that allows you to trade and sell cryptocurrencies as well as buy, Coinmama only allows you to purchase cryptos using fiat currency. You can’t trade one coin for another. Additionally, the only crypto you can sell to Coinmama is bitcoin.
As part of the process of buying crypto, you need to verify your identity. Once you do that, you can purchase up to $15,000 worth of bitcoin with a credit or debit card. Coinmama does offer a white glove service aimed at high-net-worth individuals and businesses for users who might exceed the $15,000 spending limit. With this service, Coinmama will provide assistance with managing a crypto portfolio of up to $100 million.
When you use Coinmama, you pay a fee for each transaction. The basic transaction fee for bitcoin is based on the TradeBlock Bitcoin Price Index (XBX), which offers an average market rate based on known market providers. Coinmama’s market rate for bitcoin is XBX + 2%, so that’s the price you pay for the crypto. Coinmama offers ether and bitcoin calculators so you can plan your potential purchases, but keep in mind the calculator doesn’t include Coinmama fees.
You’ll pay additional fees on each transaction of up to 3.9% on buy transactions and up to 0.9% on sell transactions. There’s another 5% fee if you use a credit or debit card. Finally, if you use a SWIFT bank transfer, you will pay a fee of 20 GBP if your order isn’t worth at least $1,000.
It’s also important to note that Coinmama operates under restrictions in some states. You might end up having a third party complete the transaction when you reside in one of those states. Additionally, Coinmama isn’t available in Hawaii or New York.
Pros and cons of Coinmama
- Simple and easy to use
- Long-standing experience with cryptocurrencies
- Requires verification for increased security
- No native wallet
- Not available in all U.S. states
- Limited cryptocurrency options
- Relatively high fees
- You can only sell bitcoin
Who can open an account with Coinmama?
As long as you’re age 18 or older, you can open an account with Coinmama and make purchases with proper verification. In order to verify your identity, there are steps you must follow:
- Take images of both sides of your driver’s license or state-issued I.D.
- Get a piece of paper and write “Coinmama” on it, along with the day’s date
- Take a selfie of you holding the paper
- Submit the selfie along with your driver’s license or state-issued I.D.
You also need your own wallet. Coinmama will send your crypto coins directly to your wallet, so you should have that set up. Make sure you copy the wallet address accurately because a mistake could mean your coins end up elsewhere.
How much can you earn with Coinmama?
Rather than earning money with Coinmama, you are buying cryptocurrencies from the exchange and hoping that they increase in value. Keep in mind that cryptocurrencies are a new asset class and price swings are common. When investing money, it’s important to understand the purpose of an asset in your portfolio. Different assets have various levels of risk and potential returns.
Depending on what you buy, how long you hold it, and whether it becomes popular, you could potentially make a lot of money. On the other hand, it’s also possible to lose money. In November 2021 bitcoin’s price moved above $67,000. As of March 31, 2022, the price is just above $44,000. If you had used Coinmama to buy bitcoin in November 2021, chances are that you would have lost money by now.
Cryptocurrency is a speculative investment. When purchasing coins, it’s important to only buy what you can afford to lose. There’s a chance that the price will increase in the future, but there’s no way to tell.
Is Coinmama legit?
Yes, Coinmama is a legitimate place to buy cryptocurrencies and sell bitcoin. Coinmama is regulated in the U.S. under the label of money services businesess with FinCEN, which is the Treasury Department’s Financial Crimes Enforcement Network.
How do I withdraw money from Coinmama?
Coinmama doesn’t hold your funds on the exchange, so you don’t need to withdraw money from Coinmama. It’s strictly a way for you to purchase the cryptocurrencies offered by Coinmama. Once you buy the coins, they are sent to your crypto wallet. The only way to withdraw money from Coinmama is to sell bitcoin to the exchange. If you sell bitcoin to the exchange, Coinmama will put what you receive in your bank account as fiat currency.
What are the benefits of Coinmama?
The primary benefit of Coinmama is that it’s simple to use. It’s straightforward, which allows you to purchase cryptocurrencies using fiat currency. For those who want an easy way to buy coins, Coinmama could be a quick solution because of the simple transaction process.
How to open a Coinmama account
You can open an account with Coinmama by providing basic information when you sign up:
- Country of residence
- Phone number
You will also select a password as part of the process. Then you will go through the verification process, uploading an identifying document and a selfie. According to Coinmama, the verification process takes about 30 minutes. Once you finish the process, you can use your credit or debit card, or your bank account, to begin purchasing coins.
Other platforms to consider
Coinmama is one of the best cryptocurrency exchanges for quickly and easily buying popular crypto coins. However, it might not be the best choice for you. Before you decide on using Coinmama, research other platforms to determine whether another might better meet your needs.
For crypto enthusiasts looking for a more advanced trading platform and a wider variety of cryptocurrencies, Kraken could be a good choice. As with Coinmama, Kraken doesn’t provide a wallet for storage. However, Kraken does offer futures trading and other advanced services. Additionally, Kraken’s fees are generally lower than what you see at Coinmama.
Read our Kraken review to learn more.
Coinbase is a good option for beginning cryptocurrency investors. The platform is easy to use, and it’s possible to trade more than 100 cryptocurrencies in addition to buying and selling them.
Additionally, Coinbase offers a custodial wallet, where you can hold your coins on the exchange. There’s also a non-custodial wallet option through Coinbase, where you control your private keys. In fact, you could potentially send coins you buy on Coinmama to your Coinbase wallet. Coinbase also charges relatively high fees, but you could still save money on fees using Coinbase instead of Coinmama.
Read our Coinbase review to learn more.
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.