Coinbase Review: A Global Cryptocurrency Exchange, But How Does It Work In Canada?
Coinbase is a well-known cryptocurrency exchange based in San Francisco. It’s been around since 2012. While it is a US-based exchange, Coinbase counts over 56 million customers in several countries worldwide, including Canada, the UK, Australia, Singapore, and much of the European Union. Because Coinbase is available to Canadians, I felt as though it warranted its own review.
Coinbase: Key Features
- US-based cryptocurrency exchange with a global reach
- Available to Canadian users
- Trade up to 60 coins
- The available crypto wallet lets you store more than 500 tokens on your device
- Crypto Earn enables you to earn free crypto by watching educational videos
- Fees tend to be higher than average
- Canadian users cannot make withdrawals into a Canadian bank account (PayPal only)
What Crypto Coins Are Supported
Coinbase supports up to 60 cryptocurrencies, far more than many crypto exchanges. This is one of their most significant competitive advantages. Here’s a list of just some of the currencies you can buy and sell with Coinbase
Funding Your Coinbase Account
Canadian users can fund their Coinbase account almost instantly using their Interac debit card. Debit and PayPal are both available for withdrawals.
Coinbase Fees Explained
Coinbase is a cryptocurrency exchange with a global reach. But that can make things confusing when sorting out the fees because they vary depending on the country you live in. The fact that Coinbase lacks a dedicated website for Canadian users doesn’t make it any easier.
You should know that Coinbase fees are relatively high compared to most leading cryptocurrency exchanges. Here’s what I can tell you about their prices:
- All crypto purchases: 3.99%
- Crypto-to-crypto conversions: 2%
By comparison, Bitbuy, a major Canadian crypto exchange, charges a .10% maker fee and a .20% taker fee. A fraction by comparison. I should point out that Bitbuy charges additional fees for deposits (.5% to 1.5%) and withdrawals (1.00% to 1.5%) into your account.
Deposit and Withdrawal Fees
Coinbase includes all deposit and withdrawal fees in the trading fee. I like the simplicity, but I don’t care for the lack of transparency in this setup. However, it does partly explain why their trading fees are so high.
How Does the Coinbase Wallet Work?
Coinbase has a dedicated app that acts as a customer cryptocurrency wallet. You can download to both iOS and Android devices via the Apple Store and Google Play. The wallet secures your crypto keys using Secure Enclave, biometric authentication, and optional cloud backups.
You don’t need to have a Coinbase account to download the wallet, and it supports more than 500 tokens, not to mention NFTs. There’s even a desktop Wallet extension that allows you to connect to other crypto apps.
What is Coinbase Earn?
Coinbase Earn is a unique platform found within the Coinbase website. It allows users to earn free crypto when they watch educational videos and take quizzes. The videos are meant to teach you about different cryptocurrencies, like Filecoin, EOS, or Stellar Lumens (XRP).
Earn isn’t available to everyone, however. It’s a limited-time offer to a select group of customers. I perused the offers and saw payouts ranging between $3 and $11 of crypto. That’s not a bad offer for doing a small amount of work.
Is Coinbase Safe?
Coinbase has worked hard to provide a secure network for their customers as with many large cryptocurrency exchanges. Here some of the security features you can expect to see when you open an account with Coinbase:
- 2-Step Verification. Most financial institutions have adopted this extra level of security, and Coinbase is no different. It’s mandatory for all new accounts.
- Offline Cold Storage. Coinspace says that they store the “vast majority” of assets offline in a cold storage facility. While this is somewhat comforting, I wish they would be more transparent and provide an exact percentage, i.e., 95%.
- Insurance coverage. According to Coinbase, they have enough insurance coverage to cover the crypto stored on their servers.
- Get verified. Before you can begin trading crypto, Coinbase will make sure you’ve been verified. To do this, you’ll need to upload the proper photo identification for review.
Coinbase vs. Bitbuy
You may be wondering how Coinbase stacks up against other large crypto exchanges. To give you an idea, the following is a brief side-by-side comparison to Bitbuy, which is a sizeable Canadian-based exchange that happens to be our top choice here at MapleMoney.
Number of Coins
Coinbase has a definite edge in the number of available coins. You can buy and sell up to 60 coins. You are limited to 9 currencies with Bitbuy. While that will be enough to satisfy most traders, users looking for a broad selection of alternative currencies may not be satisfied.
Simply put, Coinbase’s 3.99% fee on all crypto purchases for Canadian users is too expensive and difficult to justify. It doesn’t matter that the transfer fees are built-in. With Bitbuy, you can trade for .20%, and the highest transfer fee of 1.5% is still a better deal. You can find even lower fees than Bitbuy too, so Coinbase isn’t competing in this area.
Bitbuy also gets a nod for its trading platform. It features two tiers: Express Trade and Pro Trade. Express offers simplicity and ease of use for beginner and novice traders. Pro Trade comes with advanced tools and functionality for advanced traders.
I like that you can start with Bitbuy Express Trade and graduate to Pro Trade as you gain experience. The other consideration is that the Bitbuy trading platform is made specifically for Canadian crypto traders, while the Coinbase platform has a global user base.
Transparency is essential when it comes to anything related to your investments or personal finances. In the past, Canadian crypto traders have learned hard lessons about what happens when exchanges break their trust.
In looking at Bitbuy vs. Coinbase, it’s pretty obvious that one company is more transparent than the other. From a Canadian perspective, take a look at each company’s website. Bitbuy has an entire page of their website devoted to fees, where they explain not only how much you’ll pay but what each charge represents.
A Caution for Canadian Coinbase Users
Also related to transparency, there has been some past controversy about Coinbase’s transparency related to selling crypto and sending the money directly to a Canadian bank account. There was a time when you couldn’t sell crypto on a Canadian Coinbase account. You had to transfer coins to a wallet and sell them on a different exchange.
When it comes to sending withdrawals to a Canadian bank account? You can’t do it. The only option is to move them to your PayPal account, then transfer them to your bank account. This only adds to the cost and the time it takes to receive funds. This information isn’t readily available on the Coinbase website. To find it, I had to dig into their support database.
The Verdict on Coinbase
If I were writing this review from a US perspective, I would probably be more bullish about Coinbase. It’s a vast crypto exchange. It’s got a robust trading platform, some unique features like Earn and Wallet, and you can trade a tonne of coins. However, I can’t recommend it for Canadian crypto traders. There are too many Canadian-based exchanges that offer lower fees and more flexibility, even if you can’t trade as many coins.
There’s also the transparency issue. The bottom line is that you’re better off looking elsewhere for an exchange like Bitbuy. If you need access to a broader range of coins, perhaps you could open a Coinbase as a secondary account.