What are the differences between Coinbase and eToro? It may not be easy for users to invest in or trade with crypto coins if they do not choose the right platform for it.
However, there are lots of user-friendly platforms out there such as eToro and Coinbase that will make things much easier. Both these platforms are good for the beginners though there are a few distinct differences between them.
This article includes all those differences for you to help you to make a proper comparison between them and choose one among the two crypto exchanges, if you really have to.
These two are amongst the popular and widely used online crypto trading exchanges. You can use any one of these platforms to buy or sell crypto coins.
However, for that you will first need to make sure that the one you choose will fulfill all your crypto trading needs in the best possible way.
And it is for that reason you should know the differences between them in depth. Check out Differences Between Coinbase and Kraken.
In this article, the comparison between eToro and Coinbase is done on the basis of a few major factors as well as some smaller yet important ones.
These are the transaction fees and types, available currencies, features and functionalities of each, their ease of use, and security features of the respective platforms.
11 Differences Between Coinbase and eToro
The most significant difference between these two platforms is that the eToro platform is a more complete crypto trading toolset.
Even with the useful features and functionalities of it, it is quite hard for the Coinbase platform to beat eToro in this matter and at the same time stay as user-friendly and beginner-friendly as it is.
In addition to that, here are a few other significant differences between these two platforms, which, if you know, will help you to choose the right platform to go ahead with your crypto trading efforts.
Coinbase is located in San Francisco, California and was launched in 2012. It complies with the laws and regulations of the US since it operates there as well. It also follows the Bank Secrecy Act, the USA Patriot Act, and is registered to perform as a money service business with FinCEN.
In comparison, the eToro platform was launched in 2006 and has made its presence felt in several nations with its services.
This platform operates under the FCA or Financial Conduct Authority but the eToro platform also adheres to the regulations of the Australian Securities and Investments Commission or ASIC, CySEC or The Cyprus Securities and Exchange Commission, as well as Markets In Financial Instruments Directive or MiFID.
2. Fees and Spread
In terms of fees, both these platforms use separate fee schedules. If you are looking for a cheaper platform to trade with your crypto coins then you should go with eToro rather than with Coinbase.
This is because this platform charges a one-time spread ranging between 0.75% and 5% from its users on their crypto purchase which they have to pay only after proper execution of the trade. However, when the users sell their crypto assets the chargeable amount is adjusted accordingly.
There are also other types of fees charged by the eToro platform such as a conversion fee for fiat currencies to USD, a fee of $10 for accounts lying inactive for more than 12 months, and a $5 fee from the international users to withdraw funds. Even then the overall fee of eToro is quite low unlike other crypto exchanges.
In comparison, the transaction fees charged by the Coinbase platform are much higher since it includes a spread as well as a fee. This fee typically varies depending on the type of payment method chosen by the users while making each transaction.
This means that you pay for the spread, which is usually 0.50%, as well as a fee according to the payment method used twice, once while buying the coins and once while selling them.
3. Making Deposits
You can make deposits on the eToro platform in a lot of different ways irrespective of wherever you are in the world. However, the currency options may vary for each.
For example, via a credit or debit card you can pay in USD, GBP, EUR, and AUD and via PayPal in GBP, EUR, and AUD. You can use Neteller, Skrill, Rapid Transfer or bank transfer to pay in USD, GBP, and EUR. Klarna, Sofort, or iDeal can be used to make payments in EUR and via local online banking in THB, PHP, MYR, IDR, and VND.
If you are in the EU region you can use Trustly to make online payments in EUR, GBP, NOK, PLN, SEK, DKK, and CZK.
On the other hand, the Coinbase platform supports making deposits through a debit card, a credit card, Automated Clearing House transfer, and wire transfer.
Now, consider the wallet service offered by these two platforms to their users. Both platforms offer a digital wallet.
The eToro platform offers a hot wallet but that is only for the verified users of this platform which supports more than 120 crypto coins that the users can buy, sell, receive, send, transfer, or convert them in more than 500 different types of currency pairs.
This wallet allows moving coins to it and not from it. This means that you cannot put your coins back on the exchange. However, to move your crypto, the platform will charge a fee of 0.5%, unlike Coinbase.
On the other hand, the wallet of the Coinbase platform is also a separate hot wallet that can be used by even those people who do not have a Coinbase account.
This hot wallet will allow you to store all types of ERC 20 tokens, BTC, ETH, BCH, LTC, ETC, and digital collectibles. You can move money from the wallet to the exchange, with some restrictions, but the platform does not charge any fees to move crypto coins from one Coinbase wallet to any other.
5. Currency Support
You will be able to use more than a hundred crypto trading pairs if you use the eToro platform.
In addition to that, this platform also supports about 19 different crypto coins such as BTC, XRP outside the US, ETH, BCH, ETC, LTC, DASH, XLM, NEO, EOS, ADA, MIOTA, ZEC, TRX, XTZ, BNB outside the US, LINK, UNI, and DOGE.
In comparison, the Coinbase platform offers just about half as many, and that too may vary according to your location. As for the crypto coin support, both these platforms support some of the most popular coins but Coinbase is more favored because it supports some of the latest Altcoins as well.
Typically, it supports more than 50 coins but does not include coins like MIOTA, NEO, or TRX.
There are also some differences in the security features of these two crypto platforms. The Two-Factor Authentication is optional in eToro and is offered via SMS only.
In order to prevent easy access to the system, the platform follows the Distributed Denial-Of-Service or DDoS protection of eToro and its homogeneity protocols.
In comparison, the Coinbase platform offers 2FA or Two-Factor Authentication via Short Message Service or SMS or the Google Authenticator app. Also, it offers multi-signature security as eToro but in the form of fingerprint biometric access.
7. Fund Storage
When it comes to storage of funds, the Coinbase platform claims that it holds 98% of the coins and funds of the customers in air-gapped cold storage which includes multiple hardware and paper wallets.
These physical crypto wallets are also stored in different safety deposit boxes and vaults all around the world in order to prevent them from being stolen by the hackers or lost due to some other technical issues.
In order to ensure more safety and security of the funds of their customers, the Coinbase platform separates it out from the operating funds of the company.
These funds are stored safely in custodial bank accounts and are not used to run the business. What is even more promising is the fact that these funds cannot even be claimed by the creditors or the platform itself and are returned to the customers in case that the company becomes insolvent. Whatever is stored online is fully insured by the Lloyd’s of London syndicate.
On the other hand, the eToro platform is also very serious about protecting the funds of its customers. There have been no incidents of hacks or loss of funds on this platform because the funds are stored as safely as the personal information of the clients. All funds are stored securely in Tier 1 European banks.
8. User Interface
Though you will not have much difficulty in using any of these two crypto platforms even if you are a beginner in the crypto space, Coinbase is much easier to use to buy or sell crypto. It is mainly due to the simple and clean user interface.
You will also get a lot of help in using this platform using the online support portal that offers an exhaustive knowledge base. The useful videos will also let you know how easily you can earn more crypto assets on this platform.
However, you should have some experience in this field to use the eToro platform. If you are not familiar with the features, available options, and the type of transactions of the user interface beforehand, you will surely find some difficulty while trading on this platform.
Do not expect to get adequate guidance from the platform itself because it does not provide any educational content for that matter. You will get very little help from the standard Help Center and the social community forum when you ask questions or want to clarify your doubts.
9. Working Process
The working process of these two crypto trading platforms is quite different in spite of the fact that both follow a similar process for sign-up which involves identity and address verification.
The eToro platform mainly acts as a social trading platform that will provide you with a social news feed. This will allow you to follow other crypto traders, comment on the posts of other traders, set crypto alerts, and even interact with others just as you do on any standard social media platform.
If you want to check and copy other crypto investors, you can also search for them on different parameters, for example, a risk score.
On every profile page, you will get to see the details about the portfolio, stats, and risk score of the users along with their past performance. If the page does not allow sharing any information, you can opt out of a profile page.
However, when you use the Coinbase platform which focuses mainly on keeping the trading process simple, you will not have much to do apart from buying and selling crypto coins, checking the watchlist, and going through the news feed.
10. Buying Limits
When it comes to the buying limits, it is not defined clearly by Coinbase, which may be bad news for the new users. This limit can vary based on the location of the users, their buying history, age of the account and verification process.
If you want to have a higher buying limit on Coinbase, you will need to prove your identity. If you are a US resident and a verified user of Coinbase, you can make a transaction up to $50,000 in a week. And, for the verified EU customers, the buying limit is up to $30,000.
On the other hand, there is no specific buying limit on the eToro platform but you will need to have at least a $200 deposit in order to participate in CopyTrading.
You will also need to make a minimum deposit of $5,000 to use its CopyPortfolios feature. The minimum requirements for choosing manual positions vary according to the instrument used for trading which is $25 for crypto and commodities for all users apart from US users for whom it is double that amount.
11. Few Other Differences
The Coinbase platform is essentially a crypto-only exchange that is located in the United States. To be more precise, this exchange platform focuses more on crypto investments.
On the other hand, the eToro platform acts as a multi-asset brokerage as well as a social trading platform. It is located in the United Kingdom.
This platform offers non-US customers an option to invest in different financial instruments such as stocks, commodities, and ETFs as well apart from cryptocurrencies.
The Coinbase platform does not support the social aspect of crypto trading but, in comparison, the eToro platform allows its users to watch other crypto players in the market and imitate their trading strategies and actions.
In terms of countries supported, the Coinbase platform is available in several countries. Chronologically, it includes and is not limited to Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Italy, Jersey, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and the United States.
As for eToro, the platform is accessible in most of the countries in this world with the exceptions of Albania, Canada, Cuba, Iran, Japan, North Korea, Syria, Serbia, Sudan, and Turkey, in alphabetical order.
Though both these trading platforms are reputable, Coinbase however went public on April 14, 2021 with a direct listing.
On the other hand, eToro also wishes to go public and had plans to do so in March after their historic merger with Betsy Cohen’s FinTech V SPAC worth $10.4 billion. However, they could not due to regulatory delays and now have plans to go public by the end of this year, if all goes well.
In terms of accessibility, the Coinbase can be used in more than 100 countries and 49 states in the USA.
However, it is not accessible by the users residing in Hawaii. On the other hand, the eToro platform is accessible in more than 140 countries as well as 43 US states. It is not accessible to the residents of Delaware, Minnesota, Nevada, Hawaii, New Hampshire, New York, or Tennessee.
The eToro platform offers its users a demo account where the beginners especially can mock-trade crypto coins and gain experience and knowledge about the market without requiring making any actual monetary investment. The Coinbase platform, however, does not offer such a facility.
As for providing support to the users, Coinbase is built to provide full service while that of eToro seems to be less filled and needs a lot of improvements.
Coinbase offers multilayered customer service through its online support portal, the FAQ section in the website, automated chatbot, as well as traditional phone and email system. In comparison, the customer support service of eToro is not that comprehensive and streamlined.
It simply offers the basic help and understanding of the working process of the platform. The Help Center can answer only simple questions and the email ticket system is not very responsive as well. Its social community is much better being a social trading platform.
Which is Better – Coinbase or eToro?
Ideally, as it is evident from the list of differences of the two crypto exchanges mentioned above, the platforms, Coinbase and eToro, have their own characteristic features and functionalities. This makes it quite difficult to choose a better one among the two.
Coinbase is a much better platform for the beginners in the crypto space, provided they are okay with high transaction fees.
The platform will provide user education content to those particular users who are unfamiliar with the crypto concept or investing.
Moreover, the platform enables the new users with no experience in crypto trading to find out how to buy crypto coins with minimal transactions made.
The platform allows the new users to have access to a much wider range of crypto coins and use them on the Ethereum network or on any other decentralized exchanges.
However, if you are one of those crypto users who value privacy, you should avoid Coinbase and look elsewhere.
On the other hand, in comparison, the eToro platform does not offer much help to the new users with crypto education.
They expect that the users of this platform are well acquainted with the terms used in the crypto industry. However, in place of that, this platform offers the users a useful social trading experience.
Therefore, it is safe to say that the eToro platform is best suited for the more experienced and active traders in the crypto market who may also want to trade stocks using only one platform.
It is also good for those crypto investors who want exposure but do not care about the access to the actual currency itself.
There is another thing that you should take note of here. You may choose to use the simpler Coinbase platform but that will not stop you from enjoying some significant benefits, thanks to its features.
These are the ability to earn additional crypto coins by watching short videos, the news feed of the crypto industry along with the latest updates, and a coin watch-list that will also send in-app or phone notifications.
Typically, choosing a platform boils down to your trading needs, priorities, preferences, and the current conditions.
It is important to know the differences between eToro and Coinbase when you compare them. This article will be of major help to know in which different ways each of them shines and will appeal to different types of users, including you.