Coinbase vs. Robinhood: Which is the Best Place to Trade Cryptocurrency?

Coinbase and Robinhood are two of the most popular places to trade cryptocurrencies, but which one is better for you? The answer depends on your needs

Coinbase and Robinhood are two of the most well-known platforms for trading cryptocurrencies, but which one is right for you? The answer depends on your needs, especially on how much crypto trading you intend to do and the costs you’re willing to pay.

Coinbase and Robinhood may appeal to different kinds of traders, though there’s likely some significant overlap. Coinbase is a cryptocurrency exchange that targets traders deeply in the world of digital currencies. In contrast, Robinhood is a trading app that allows users to buy and sell stocks, ETFs, options and some types of crypto for no out-of-pocket cost.

Both companies have faced scrutiny from regulators in recent years. The Securities and Exchange Commission sued Coinbase in June 2023, alleging it had illegally operated as an exchange, broker-dealer and clearing agency, and offered and sold unregistered securities. The lawsuit said Coinbase knowingly violated securities laws that are designed to protect investors. Coinbase said it would continue to operate its business as usual.

In 2020, Robinhood agreed to pay $65 million to settle SEC charges that it misled customers over the payments it received from trading firms for sending customers orders to them. The SEC found that customers received inferior trade prices in aggregate of $34.1 million even after accounting for the lack of a commission. Robinhood did not admit or deny the SEC’s findings.

Here’s how Coinbase and Robinhood differ along a few other key dimensions.

Coinbase vs. Robinhood: Cost

The cost structure at Coinbase and Robinhood are significantly different, and it doesn’t help matters that Coinbase purposely obscures much of its fee structure from potential customers (though it does disclose them before you actually place a trade). That said, Robinhood is not exactly straightforward about how it’s compensated either.

The fee structure at Robinhood is simple, relative to Coinbase’s. In keeping with the broker’s “no commissions” model for stock and options, you won’t pay any cost directly out of your pocket for buying and selling crypto. Instead, the cost of trading is effectively rolled into a spread markup on the trade. So you’ll effectively pay more when you’re buying and receive less when you’re selling than if you received the best market price at the moment of your trade.

Coinbase's fee structure is confusing, to say the least. Not only does it charge varying fees based on how much you purchase, it has a basic tier of service and an advanced tier, each of which have different fees. And recently Coinbase began to obscure the fees for its basic service, making it difficult for prospective customers to see how much they’re paying (Spoiler alert: prices are high if you’re buying just a little bit of crypto on the basic tier.)

For smaller transactions, you’ll pay a spread mark-up of 0.5 percent of your trade value plus a flat fee based on the size of your transaction.

Coinbase’s fee structure

Transaction amount

Fee

$10 or less

$0.99

More than $10 and up to $25

$1.49

More than $25 and up to $50

$1.99

More than $50 and up to $200

$2.99

At the lowest levels, around $10, you’ll pay a fee that eats up nearly 10 percent of your purchase. But even at $200, you’re still paying a hefty 1.5 percent or so. And that’s on top of the 0.5 spread mark-up that’s already factored into the purchase or sale price.

At purchase amounts above $200, you’re still paying that 0.5 percent spread mark-up while a variable fee depends on your source of funds.

Coinbase funding fees

Payment method

Fee

ACH

Free

Wire (USD)

$10 deposit fee; $25 withdrawal fee

Debit card

3.99 percent

If you opt to use Coinbase Advanced, the company’s higher service tier, you’ll be able to score lower overall fees, even if you’re trading with lower amounts. Coinbase Advanced is clearer about these fees, but the structure is scaled and depends on whether you’re adding liquidity (where the commission ranges from 0 to 0.4 percent of trade value) or taking liquidity (with commissions ranging from 0.05 to 0.6 percent).

Advantage: Robinhood, for the simplicity of its fee structure, even if its disclosure is no better than the one provided by Coinbase.

Coinbase vs. Robinhood: Available coins for trading

Coinbase supports trading in more than 200 different cryptocurrencies, including the biggies such as Bitcoin, Ethereum, Cardano, Solana, Dogecoin and more. So, you’re