Robinhood vs. Coinbase 2024: Which Investing App is Right for You?

If you’re a beginner who is learning how to buy cryptocurrency, you have a variety of trading platforms to choose from. Two options are Robinhood and Coinbase.

Although both of these trading apps make it relatively easy to start buying and selling crypto, there are some important differences between each product.

For instance, Coinbase offers a wider variety of crypto assets, including non-fungible tokens (NFTs) as well as the ability to earn interest. Robinhood, on the other hand, is a more basic platform in terms of crypto, which allows you to buy and sell a limited number of cryptocurrencies.

We’ll review Robinhood vs. Coinbase to help you decide which platform makes more sense for you.

Robinhood vs. Coinbase

	Robinhood	Coinbase
Features	Wallet Instant deposit	Wallet Staking Rewards Rewards debit card NFTs
Fee structure	No trading fees	Tiered fees depending on the size of the trades
Supported cryptocurrencies	Avalanche (AVAX) Bitcoin (BTC) Bitcoin Cash (BCH) Bitcoin SV (BSV) Compound (COMP) Dogecoin (DOGE) Ethereum (ETH) Ethereum Classic (ETC) Litecoin (LTC) Polygon (MATIC) Shiba Inu (SHIB) Solana (SOL) Stellar Lumens (XLM) Uniswap (UNI)	150+ including: Bitcoin (BTC) Dogecoin (DOGE) Ethereum (ETH) Cardano (ADA) Wrapped bitcoin (WBTC) Sushiswap (SUSHI) Aave (AAVE)
Proprietary token	N/A	N/A
Supported transactions	Market order Limit order	Market order Stop order Limit order Coin-to-coin
Funding methods	ACH bank transfer	ACH bank transfer Wire transfer (domestic and international) Cryptocurrency transfer PayPal
Liquidity	N/A	$4.1 billion
Accessibility (state-wise)	Not available in: Hawaii Nevada	Not available in: Hawaii
Security	Most crypto assets held in cold storage; crime insurance against theft and cybersecurity breaches.	Most crypto assets held in cold storage; FDIC insurance for U.S. dollar amounts; two-factor authentication.
Best for ...	Low-cost trading for beginners who want access to major cryptocurrencies	Ease of use for beginners who want access to crypto assets
	Visit Robinhood	Visit Coinbase

How does Robinhood work?

Robinhood was founded in 2013, with the mission to “democratize finance for all.” Robinhood is known for its easy-to-use trading interface that lets beginner investors get started quickly.

Robinhood founders Baiju Bhatt and Vlad Tenev met at Stanford and created trading software they sold to hedge funds. After spending time in New York, they went to California to start Robinhood, designing it for ease of use and pioneering the commission-free trading model.

The app offers four main investing categories: Stock trading and exchange-traded funds (ETFs), options, margin investing, and cryptocurrencies.

Using Robinhood to buy a cryptocurrency is fairly straightforward. You simply choose which coin you want to buy and then initiate the purchase.

Robinhood allows you to fund your account by linking your bank account with an instant transfer so you can access your deposit to buy cryptocurrencies. It’s important to note that Robinhood is a brokerage, however, and not an actual cryptocurrency exchange.

Wallet options

Robinhood also offers a custodial crypto wallet with no access to private keys for your crypto. If you want to use a non-custodial wallet of your own, you must transfer your coins out of Robinhood and pay any applicable network fees.

It’s also possible to send coins you bought elsewhere to your Robinhood crypto account. However, this feature is only available with the following coins:

• Bitcoin (BTC)
• Bitcoin cash (BCH)
• Bitcoin SV (BSV)
• Dogecoin (DOGE)
• Ethereum (ETH)
• Ethereum classic (ETC)
• Litecoin (LTC)

Advanced features

Robinhood doesn’t offer any other features for crypto traders at this time. For instance, you can’t earn rewards or earn interest with Robinhood, nor do you have access to an NFT marketplace.

Robinhood is best for those who are interested in buying popular cryptocurrencies and holding on to them. However, it’s unsuitable for coin-to-coin trades or for those interested in more advanced cryptocurrency investing and trading.

Learn more about Robinhood in our full Robinhood review.

How does Coinbase work?

Established in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase is one of the oldest and best crypto exchanges still in operation today. As with Robinhood (HOOD), Coinbase (COIN) is listed on the NASDAQ exchange.

In addition to simple cryptocurrency transactions, Coinbase offers a Pro version with more advanced crypto trading options that requires a separate account. You can learn about the differences between Coinbase and Coinbase Pro if you’re interested in advanced cryptocurrency trading.

Coinbase is one of the easiest cryptocurrency exchanges to use. It focuses on buying cryptocurrency with a variety of fiat payment methods, including debit cards and PayPal. Industry website CoinMarketCap consistently ranks Coinbase high for reliability and liquidity.

Wallet options

Coinbase features a variety of wallet options, including a custodial and non-custodial wallet. You can also keep your coins in Coinbase Vault, which is a way to store your assets off the exchange. Because Coinbase is a cryptocurrency exchange, you can complete coin-to-coin exchanges and use crypto transfers for supported coins.

Advanced features

Coinbase makes it possible to earn extra cryptocurrency coins by learning about new offerings through the Coinbase Rewards program. Coinbase also offers staking for some coins, which allows you to earn interest simply by holding the coins on the exchange.

Coinbase also recently introduced an NFT marketplace, which allows you to create your own NFTs and buy and sell NFTs others have made.

Fees

Coinbase used to be one of the most expensive options for buying cryptocurrency. However, the company recently shifted its fee structure to a tiered maker/taker model. As a result, it is now more competitive with other cryptocurrency exchanges.

Learn more about Coinbase in our full Coinbase review.

What both excel at

Robinhood and Coinbase are very intuitive for beginners. The interface for both is simple and allows you to clearly see what you’re buying. Each also offers a mobile app for iOS and Android devices.

Both companies also make it easy to buy cryptocurrencies using fiat money. Robinhood focuses more on bank transfers, and Coinbase allows for debit and PayPal purchases as well. Both platforms allow instant access to your transferred bank funds for purchases.

Both Robinhood and Coinbase also offer crime insurance to help protect against theft and cybersecurity breaches. This offers peace of mind to beginners who want to know that their digital assets are protected in the event of a hacking attack or data breach.

Additionally, both companies have met the listing requirements for NASDAQ, which offers some degree of confidence to investors hoping to get started with cryptocurrencies.

6 important differences between Robinhood and Coinbase

1. Cryptocurrencies

Coinbase offers hundreds of cryptocurrencies that can be bought, sold, and exchanged. Coinbase offers more than 150 coins for purchase, whereas Robinhood offers just 15.

If you’re only interested in how to buy bitcoin, ethereum, and popular altcoins such as dogecoin or litecoin, Robinhood should work fine. However, if you want a wider variety of coins to choose from, Coinbase could be a better choice.

2. Fees

This is an area in which Robinhood excels over Coinbase. Robinhood doesn’t charge trading fees when you buy or sell a coin. Coinbase, on the other hand, does charge fees. But Coinbase has improved in this area in recent months — it now has a tiered maker/taker model.

In the Coinbase model, what fees you pay depend on how much you trade in a 30-day period, as well as whether you’re considered a maker or a taker.

• Maker: Someone who places a limit order to be fulfilled later when certain conditions are met. Depending on how much you trade, maker fees can be lower than taker fees.
• Taker: Someone who places a market order to be filled immediately. These fees are usually higher than maker fees as you progress through the available tiers based on how much you trade.

For those who don’t want to worry about transaction fees, Robinhood is a better choice.

3. Rewards

Coinbase offers a rewards program through its Earn feature. When you watch videos and answer questions about newer altcoins, you receive free cryptocurrency. These coins can be exchanged or sold later, or you can hold them and see whether they increase in value later on.

Robinhood doesn’t offer a way for you to earn free cryptocurrency.

4. Staking

One way to earn money from holding on to cryptocurrencies is through staking crypto. With staking, you’re paid interest for keeping certain coins in the form of additional cryptocurrency.

As of Aug. 29, 2022, Coinbase pays up to 5.75% APY, depending on the coin in question. The coins are added to your holdings of the particular asset.

Robinhood, however, does not offer staking.

5. Wallet options

Robinhood offers a crypto wallet option, but it’s strictly custodial. That means you don’t have access to private keys to secure your wallet and make it your own. Robinhood’s wallet basically just lets you send coins from outside Robinhood to your Robinhood account.

Coinbase, on the other hand, offers different wallet options. You can keep your coins on the exchange, which acts as a custodial hot wallet for your coins. If you want to send and receive coins on the exchange, you’re provided with a wallet address you can use.

Coinbase also offers a non-custodial wallet called Coinbase Wallet which gives you control of your keys and doesn’t monitor or have access to your wallet. You can also store coins off the exchange by using Coinbase Vault.

If you want true control over some of your crypto assets, Coinbase could be a better choice.

6. NFTs

If you’re interested in NTFs, Coinbase can be a better choice because it offers a marketplace where you can create, buy, and sell NFTs.

Robinhood doesn’t offer access to any other crypto assets beyond its limited number of cryptocurrencies.

Which one should you choose?

In deciding between Robinhood vs. Coinbase, it’s important to consider which platform is best for your needs and goals. Here are some items to consider:

• Fees: For some investors, fees are an important part of choosing a platform. Robinhood can be a good choice because it doesn’t charge trading fees. However, if you’re more interested in other features, paying some trading fees might not matter to you.
• Available coins: If you’re interested in a specific coin, look for a platform that offers that coin. Coinbase supports a wider variety of coins, whereas Robinhood is more limited. Unless you’re only looking for a handful of popular coins, Coinbase offers a better selection.
• Advanced crypto features: Robinhood only offers you the ability to buy and sell cryptocurrencies. If all you want to do is buy and hold or buy and sell, Robinhood makes it easy. However, if you’re interested in learning about other types of digital assets, such as NFTs, or accessing perks such as staking, Coinbase is a better option.

FAQs

Bottom line

Both Robinhood and Coinbase make it easy to purchase cryptocurrencies using fiat money. However, Robinhood is a brokerage that happens to offer access to a limited number of coins, whereas Coinbase is an actual cryptocurrency exchange. As a result, you have more options for crypto assets when using Coinbase.

Realize, though, that cryptocurrency represents an alternative asset class. When investing money, some experts recommend you limit alternative assets to no more than 20% of your portfolio.

Before you invest in crypto assets, carefully consider your own needs and goals, and be sure to do your best to limit your risk exposure.

Disclosure: The author owns positions in both HOOD and COIN. She also owns coins mentioned in this article, including BTC, ETH, DOGE, MATIC, COMP, LTC, ADA, and SUSHI.

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.