Many people chose, and others switched to Coinbase because of its different tools’ easy buying and selling cryptocurrency policies. However, no matter how globally acclaimed it is, the Coinbase charge per trade differs from what other cryptocurrency exchanges use. The fees it charges are considered extremely high across the whole cryptocurrency market.
With the rising demand for cryptocurrency in the world, the demand for platforms that ease its exchange is also increasing day by day. Coinbase is one of the world’s largest cryptocurrency exchanges today, headquartered in San Francisco, and its worth is almost equivalent to that of Hyundai.
Although it had been operating for more than the past ten years, it gained more importance during the quarantine period of Covid-19 and soared to new heights.
If you also plan to use Coinbase as your cryptocurrency exchange platform, you must be aware of its fee structure. And surely, you have found the right place to enlighten yourself on all its trade and charge structure. Read on and get to know everything!
A Brief Review of Coinbase
Coinbase offers its users access to nearly a hundred different cryptocurrencies. All the services that the company offers come with a set fee. These different fee formations are too hard, confusing to understand, and expensive.
Usually, the differences in fees depend upon the method of payment you use as well as the place you belong to. So, naturally, you have to keep in mind both of these factors when proceeding with any transactions and exchanges on Coinbase.
The Fee Structure of Coinbase Charge per Trade
Whether you are a one-time trader or someone who continuously invests a lot in the trading of cryptocurrency, you need to be aware of the fee-charging structure of Coinbase to carry out the whole process well.
You must know about all its terms of service, and all of its fee types, because that is what helps you decide whether Coinbase is the right place for you or not.
The Wallet Service of Coinbase
Coinbase offers two kinds of cryptocurrency transfers. Both of them are explained below.
- Free Cryptocurrency Transfer
Coinbase makes your transfers easy by providing a free cryptocurrency wallet. This wallet includes several cryptocurrencies like: Ethereum, XRP, Litecoin, Dogecoin, and Bitcoin.
If you transfer your cryptocurrency via any of those which belong to the Coinbase wallet, there is no cost you are charged with.
- Payment of Transaction Fees
In case you use a cryptocurrency that is not supported by the Coinbase network (does not belong to the Coinbase wallet), there is a certain fee that you are required to pay in order to complete the transaction.
This transaction fee is important because it bears the charge when your transaction is added to the blockchain.
The different fee formations of Coinbase are listed and discussed below. Let’s have a look at all of them.
- Deposit fees
- Trading fees
- Withdrawing currency fees
a) The Deposit Fees
Generally, you have the option to either buy cryptocurrency head-on or deposit your savings to Coinbase and carry on with your purchase from there.
These direct purchases always cost higher than the Coinbase deposited ones. You can also join your Coinbase account with ACH transfer and make free purchases or choose to go with Wire transfer too (it costs you a certain fee – a total of $10 for every incoming transfer and an additional $25 for each outgoing transfer).
b) Trading Fees
Whether you plan to purchase cryptocurrency via Coinbase or convert from one cryptocurrency to another, keep in mind that there is always a fee for that.
This acknowledgment is necessary because no crypto exchange goes without charging you. The whole purpose of crypto exchanges is to collect revenue, and the companies do that by charging you a particular amount of fees on every trade.
So is the scene with Coinbase. Being known as the world’s largest cryptocurrency exchange, the Coinbase charge per trade surpasses every other company’s.
With each payment method, the amount of the base rate fee differs. For instance, if the payment method of your purchase is Coinbase USD Wallet, the conversion fee for that is ‘1.49 percent.
And if the payment method is US Bank Account, it will again cost you the same conversion fee of ‘1.49 percent.
However, if you choose a debit card for your transactions, the conversion fee will be a little higher for that. It is a total of ‘3.99 percent. An additional benefit of using a debit card for crypto purchases is that any cryptocurrency purchased with it becomes available for you right away.
c) Buying and Selling
When you make any purchase or sell cryptocurrency using Coinbase, you have to pay an additional 0.50 percent along with the usual base rate payment given above as the conversion fee.
This additional amount is termed ‘spread fee.’ It is added to every single transaction you make via Coinbase. The amount of this spread fee may vary from time to time.
It may increase and decrease with respect to all the market fluctuations for the same asset on Coinbase Pro (a trading platform for professionals who are active traders).
Let’s say you plan to purchase $1000 on Coinbase, using your bank account, an amount of $5-$10 will be removed from the order along with the base rate fee of 1.49% – all due to the spread fee policy of Coinbase. As a result, you will get a total of almost $985 for your use in the end.
Also, the same process is applicable when you plan to sell cryptocurrency on Coinbase. The only difference is, this time around, the amount will be removed from your Coinbase account instead of your bank account.
Conversion of Cryptocurrency
There is a specific spread fee set for converting one cryptocurrency to another. Each conversion costs a spread fee of ‘2.00 percent.
Moreover, for every transaction, the consumer exchange rate that Coinbase directs is done by putting up a spread fee to the market exchange rate of Coinbase Pro. Apart from this, there are no more fee regulations for cryptocurrency conversions.
Although indirectly you have to pay more fee when you use your debit or credit card, you get to have a benefit worth the price too.
You get the virtual currency right away when you buy or sell cryptocurrency via debit or credit card.
Plus, you can easily view the total, the fee, and the amount you buy and sell with the transaction on the confirmation screen. Now, what is better than that?
Coinbase Charge per Trade: No Fees for Small Transactions
If your transaction amount is $200 or below that, you do not have to pay any kind of variable fee for your transaction. The condition for such small transactions is that they should be carried out either via your bank account linked with Coinbase or through your USD crypto wallet.
The variable fee of ‘1.49 percent is applicable to transactions that exceed the $200 threshold only. So, you do not need to worry about that if the amount of your transaction falls in the range of $200 or below that.
Withdrawing Currency Fees
There is a specific network fee set up for the withdrawal of cryptocurrency. According to the policies of Coinbase, this network fee differs based on two things:
- The total amount of traffic being witnessed by the network at the time of withdrawal.
- The type of cryptocurrency you choose to withdraw
Both of these factors play a major role in determining the value of network fees. Let’s take Bitcoin, for example. The withdrawal fee for Bitcoin ranges from $1.00-$5.00.
However, for many other digital currencies, the fee is usually less than $1.00. For exact information regarding the withdrawal fees, you can directly go and get your funds. The cryptocurrency exchange will easily let you know what the current fee is.
Restrictions on Spending
There is a particular limit to what you can and cannot buy and sell on Coinbase on a weekly basis. In case you are a US citizen, and your debit and credit cards are verified on the crypto exchange, you can make transactions of about $50,000.
However, you cannot avail of this offer if you are not a verified US resident. On a normal range, if your credit card is linked to Coinbase, you can easily make purchases worth $1000 every week.
Although spending criteria are higher and better for ACH transfers than for credit card users, Coinbase increases the spending limits of its users on the basis of some terms also.
Like this, if you are a regular user who has been trading on the platform for a long time, the exchange can raise your limits. Plus, you can avail of this benefit by sharing more and clear information about your finances to the platform too.
The more you use the platform, the better it treats you and makes your transactions easier.
Ways to Avoid Fees
If you plan to buy cryptocurrency via Coinbase and transfer the funds to another crypto exchange later so that you can continue your trade there, you can easily do it without any fee.
During the conversion of USD to stablecoin USD Coin (USDC) of Coinbase, the exchange drops any fee. You cannot use your credit card for this transaction because it requires the use of a US bank account.
So, make sure you do it via your US bank account. It will take up to 3-5 days, and you will have your funds ready for withdrawal.
Like this, you can directly transfer your USDC to any exchange you want to trade on next and continue your journey of cryptocurrency trade.
Features that Make Coinbase Charge Per Trade Easy and Secure
The best thing about Coinbase is that it makes every trade an easy process for you. It is surprisingly very easy to use. The process of signing up on Coinbase takes no time and incurs no difficulty.
Once you have signed up, use the data transfer network Plaid to link your bank account with Coinbase. Plaid is an approved network that helps you minimize the cost of all trades you carry out via Coinbase.
The interface of Coinbase is quite simple to understand and go through. You can check out the different cryptocurrencies it offers via the search bar and choose the ones you want to use.
Moreover, if you want to trade between different cryptocurrencies, Coinbase helps you do that also – it allows you to go with any crypto conversions you want.
Although there have been some minor problems related to exchanges, no major issues about Coinbase have ever been reported. It has built and maintained its name as a safe and secure crypto trading platform.
Due to all this, even if the Coinbase charge per trade is generally higher than many other crypto exchanges, it is still one of the most approached platforms for buying and selling digital currency.
Coinbase and Coinbase Pro
Coinbase and Coinbase pro are both cryptocurrency exchanges designed to facilitate users in buying, selling, and trading cryptocurrency.
While beginners use Coinbase because it is manageable and plain to use, Coinbase Pro is likely to be used by experienced and adept investors due to its advanced features.
While Coinbase gives a simple way to exchange currencies, like through credit and debit cards, Coinbase Pro is not beginner-friendly – it has a lot of user options and advanced reporting, which make it pretty difficult for a person to use it for the first time. In this case the Coinbase charge per trade is much more advantageous.
Although, both the options have their own separate features, mediums of change, and user interface. The biggest change that makes a difference is ‘Fees”. The charges of Coinbase pro are lower as well as simpler. Therefore, many professional users switch to Coinbase Pro.
The Bottom Line
Coinbase has rightly earned its popularity and claimed its place in the world with all the easy and simple features and its secure reputation.
However, the charges it puts up can be seen as a drawback. So, if you want less fee on your trades, move on to the Coinbase pro version.