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Coinbase vs. Robinhood: Which is better? By Chris Davis | NerdWallet
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proper comparison of Coinbase and Robinhood depends on what service you’re looking for. Robinhood follows the playbook of a traditional stockbroker. Through the app, you can buy stocks and exchange-traded funds on the stock market, but it also has a limited menu of cryptocurrencies. Coinbase, on the other hand, only offers cryptocurrencies (no stocks or ETFs here), and a lot more of them. Plus, Coinbase has capabilities that could be considered essential when buying crypto — capabilities Robinhood currently doesn’t have.
Fees
One advantage Robinhood has over Coinbase is the cost to purchase cryptocurrencies. On Robinhood, it’s free. You can buy and sell crypto as frequently as you want with no fees whatsoever (and pattern day trading rules that exist for stocks don’t currently exist for crypto). You’ll still have to pay the spread (the difference between the bid and ask price). It’s worth noting that in 2020, a Securities and Exchange Commission order found that Robinhood provided “inferior trade prices,” costing customers $34.1 million. The SEC investigation was about Robinhood’s marketing and execution in general and not crypto trades specifically. Robinhood agreed to pay $65 million to settle the charges. On Coinbase, it’s not so simple. Coinbase has a widely varying fee structure, depending on the amount you’re buying in U.S. dollars and how you’re paying for it. For example, if you’re buying $100 in Bitcoin with a debit card, you’ll pay a fee of 3.99%, or $3.99. If you pay with a linked bank account, that fee would be a flat $2.99. Fees winner: Robinhood.
Cr ypto capabilities
This is another category that Coinbase should win by default: Robinhood is a stockbroker that dabbles in converting USD into cryptocurrency, while Coinbase is a cryptocurrency brokerage and exchange that also offers a hosted wallet, as well as a personal wallet if you want it. What does that mean? With Coinbase, you have the option to buy crypto with cash, then store those coins on Coinbase’s hosted wallet. Or you can send those coins to your own Coinbase Wallet, which is completely separate from Coinbase the app. There’s also the free Coinbase Pro exchange, where you can easily deposit coins from your Coinbase hosted or personal wallet, then trade them for a much lower fee. In short, Coinbase is a really good onramp for new
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crypto users, offering users many of the capabilities cryptocurrencies were created for in the first place. With Robinhood, you can’t send coins out of the app, nor receive them from an outside wallet. Really, your only option is to convert your USD into crypto, then convert it back to USD if you want to benefit from any rise in price. Cr ypto capabilities winner: Coinbase.
Technical reliability
The truth is that both companies have struggled with outages when trading volume spikes. And this, typically, is when users are most eager to have full control of their funds, whether it’s a crypto surge or crash. So until either platform can prove it can handle an unexpected influx of activity, users should be aware that this is a real possibility. However, according to Downdetector, Robinhood has had 49 reported outages in 2021, while Coinbase has had 28, giving Coinbase a slight edge by this metric. Technical reliability winner: Coinbase.
Ease of use
Both apps are incredibly intuitive, fast, clean and easy to use, and that makes sense: Both companies earn a large portion of their revenue through transaction volume. The more people are buying and selling, the more money they make. So it’s in their best interest to create a product that entices buying and selling, even in small amounts and reduces every bit of friction that exists on the way to pressing the “buy” button. The end result is a product that’s excellent for beginners in the sense that the buy and sell process is stripped down to the basics; though some argue that it actually shouldn’t be this easy for beginners to trade in risky, speculative assets like cryptocurrency. Coinbase Pro can feel more like an intermediate-toadvanced trading platform, but if you’re not ready to wade into that, the basic Coinbase platform remains extremely easy to use, as long as you’re OK paying those fees. With Robinhood, you’ll never really come across anything that resembles an advanced trading platform. Ease of use winner: It’s a draw.
So which is better, Robinhood or Coinbase?
When it comes to cryptocurrencies, Coinbase is the clear winner here. MV
