Cryptocurrency traders looking for the right platform and exchange to use may want to consider Coinbase Pro, which is the “expert” version of one of the most popular cryptocurrency Coinbase portfolio managers. This post will discuss the pros and cons of using Coinbase Pro as a trader.
About Coinbase as a Company
Coinbase is a US-based company that some consider to be the “most popular” Bitcoin wallet and exchange provider. As of this writing, Coinbase has been around since 2012 and has gained over 20 million users (About Coinbase). Coinbase also became the first licensed US Bitcoin Exchange (The Balance).
Back in 2017, the number of Coinbase users surpassed the userbase at most traditional stock brokerages, such as Charles Schwab (CNBC).
Coinbase has built its name and brand by following a couple of principles:
- Trust: this means providing quality service, being transparent in operations, and leading the market in complying with security and regulatory requirements.
- Simplicity: the platform is extremely easy to use. It’s designed to take the complexity out of cryptocurrency for the majority of users. This has allowed for broad adoption across the casual market. In fact, their slogan is “Coinbase is the easiest place to buy, sell, and manage your cryptocurrency portfolio.”
With the endless controversy and scams surrounding cryptocurrency, it’s easy to see why the general public resonated with the trust messaging.
Likewise, cryptocurrency is technically complex and many platforms cater specifically to users who can handle the complexity. But for the general public, a simple, familiar site that takes the complexity out of the equation is welcome. Thanks to the simplicity, this is a platform you can easily recommend to your friends and family.
See more about Coinbase Priorities and Values.
Coinbase Geographic Availability
While Coinbase initially focused on gaining full regulatory compliance in the US, it has expanded globally, currently supporting 42 countries. This spans numerous regions including Asia and Europe. For an updated list of supported countries, see www.coinbase.com/global.
Certain popular exchanges, like BitMEX, offer extremely competitive platforms. But they have chosen not to go through the complex regulatory requirements of certain markets. As such, they are not available to customers in the United States, Canada, and certain other locations.
Coinbase Versus Coinbase Pro
While simplicity is great for the general public, traders are a more advanced subset and we need a certain amount of complexity. To address this market, Coinbase has created a separate entity called Coinbase Pro that provided more direct access to their exchange, GDAX (Coinbase’s licensed Global Digital Asset Exchange).
As Coinbase says:
Coinbase is for everyone, Coinbase Pro is for experts.
If you are a Coinbase user, you have access to Coinbase Pro. You simply need to head over to pro.coinbase.com. There, you can use your same login credentials. But you will have to move money between Coinbase and Coinbase Pro platforms.
Here’s a screenshot of the current Coinbase dashboard. Clean and simple.
Coinbase Pro Screenshot
And here’s a shot of Coinbase Pro. Rather than simple quotes and buy/sell buttons, you’ll find charts and other tools required for active trading. You’ll also see the constant flashing of red and green lights that we traders obsess over.
Coinbase Pro: The Good
1. Peace of Mind
Probably the #1 reason people use Coinbase is the “trust and security” factor. There are countless stories of exchanges losing money, tying up people’s funds, not resolving issues, and straight-up disappearing.
Coinbase is a direct reaction to these bad experiences. They are also covered by insurance designed to benefit their customers in the event of a catastrophe. In the US, you are covered up to $250,000 of FDIC insurance, just like with most banks.
2. Great User Interface
For most traders, Coinbase Pro offers all of the tools needed to successfully perform day and swing trades. Despite the complexity, it still is very easy to use and intuitive. The Coinbase team really excels at providing a top-notch user interface.
Entering into complex trades is straightforward and most traders will be unlikely to make a mistake.
3. Easy Setup and Bank Integration
Coinbase Pro borrows from the easy account setup foundation in Coinbase. It’s very easy to create an account, connect your bank, and get trading.
4. Fast, Reliable Order Execution
Whereas we have experienced stuck trades or large spreads on other platforms, Coinbase Pro execution has been top notch in our experience. Given the company emphasizes “trust” and reliability, this is not a surprise. Trades execute right away and right at the expected price. You can enter advanced orders, such as Limits, as well.
5. Great Customer Support
As a customer, you have access to knowledgable online and phone support. If you have an issue, you’ll be able to talk to a human and get things resolved. Customer support is a major pain point with crypto exchanges.
6. API Access
Coinbase Pro is very accessible for traders who are looking to integrate their own development and trading bots. The developer documentation is highly detailed and easy to understand.
7. Taxes and Statements
Given that Coinbase is an early adopter of regulatory requirements, it is also ahead of the curve on helping its customers at tax time. If you are an active trader and subject to taxes, this is a critical feature. Rather than having to go back through your trade history and catalog your transactions, you’ll simply be able to give your Coinbase Tax Statement to your accountant and be done with it. Simple.
Coinbase Pro: The Bad
1. Limited Cryptocurrencies Supported
Coinbase has been slow to roll out support for new cryptocurrency. One of the ways they keep the platform simple is by not overloading it with choices and data. However, in late 2018 and 2019 so far, Coinbase has introduced quite a few new options.
While this might be a con for some, this really isn’t much of an issue for most traders. Most traders just need a vehicle for going long and short. It really doesn’t matter if that’s Bitcoin, Litecoin, or otherwise.
However, speculators who want to buy more obscure coins in anticipation of longer-term returns may need to look elsewhere.
2. Higher Fees
Trade fees on Coinbase Pro for each side (both on open and close) range from 0% to 0.3%. Most customers, though, will typically pay 0.3% per trade side. Fees are only per trade, so you won’t pay any monthly fees or service charges.
For example, if you buy and sell Bitcoin at $4,000, that’s $4,000 * 0.003 * 2. That’s $24.00 for a round-trip trade.
These fees are significantly lower than regular Coinbase, which has a tiered fee structure described here. For anyone with some familiarity with cryptocurrency, we immediately recommend using Coinbase Pro simply due to the major savings in fees.
Despite being lower than regular Coinbase, Coinbase Pro still isn’t the cheapest trading platform. This makes sense. You are paying for the security and peace-of-mind.
For traders, we recommend exploring futures. See our review of Tradestation. The base trading fees are about 10x lower than Coinbase Pro (at $4,000 Bitcoin). You’ll also get leverage which makes your money go further and makes the fees even cheaper from a relative perspective (but also increases your risk).
With Tradestation, it’s a flat $1.20 per side, so a total of $2.40 round-trip. That’s not counting leverage or a change in price of Bitcoin, which make Tradestation even more favorable.
See Coinbase Pro fees here for the latest.
3. No Margin and No Shorting
Perhaps the biggest negative for traders is that Coinbase Pro no longer supports short selling. It also doesn’t support margin trading.
This is okay for conservative traders. But for traders who want higher leverage to capitalize on short-term movements or who want to profit in down markets, another platform will likely be needed. If you want margin and shorting, you can read our review of Tradestation for Cryptocurrency Traders.
This all may change in the future, so you can keep track of status here on the Coinbase FAQs.
Opening an Account
Getting started with Coinbase Pro is simple.
1. You can sign up for free on the homepage here: https://www.coinbase.com/
2. You can also use this referral link to sign up: https://www.coinbase.com/join/59270ea6e3aad10098d4383d
By using the referral link, after you buy or sell more than $100 worth of coins, both you and Crypto-ML will receive $10 in Bitcoin as a bonus.
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