What are the differences between Coinbase and Robinhood? Since the time Bitcoin and other crypto coins took the world of finance by storm, crypto trading was facilitated by platforms such as Coinbase and Robinhood.
Since their launch, these two crypto trading platforms have become two of the most important, well-known, and trusted names in the crypto trading space.
Coinbase and Robinhood are both user-friendly and are good for crypto traders to use.
These US-based platforms allow buying and selling crypto coins though Robinhood facilitates purchasing stock and Altcoins as well.
Though both these crypto trading platforms are good for the beginners, Coinbase has a slight edge over Robinhood since it offers a larger selection of crypto coins.
Robinhood, on the other hand, allows investing small amounts in stocks and Altcoins both. Check out Differences Between Fiat Money and Cryptocurrency.
However, there are lots of other different areas in which these two crypto trading platforms differ from one another.
Here in this article, you will find all the differences based on the standard as well as the advanced features of both.
This includes the security options, fee structure and more.
- 25 Differences Between Coinbase and Robinhood
- 1. Focus
- 2. Features
- 3. Wallet Type
- 4. Wallet Features
- 5. Interest
- 6. Customer Support
- 7. Deposits
- 8. Withdrawals
- 9. Ease of Use
- 10. Security
- 11. Value for Money Score
- 12. Choice of Crypto
- 13. Fees
- 14. User Base
- 15. Installing and Setting Up
- 16. Accessibility
- 17. Uniqueness
- 18. Process
- 19. Capabilities
- 20. Payment Methods
- 21. Growth Potential
- 22. Revenue Generation
- 23. Popularity
- 24. Future
- 25. Portfolio Diversification Impact
- Which is Better – Coinbase or Robinhood?
25 Differences Between Coinbase and Robinhood
Over the years, several crypto exchanges to the tune of hundreds have come up in order to support the demands of the ever-growing crypto community.
However, all were and are not successful. Some of these exchanges experienced catastrophic disasters while others were somewhere in between failure and success.
Coinbase and Robinhood are the two most successful and incredibly popular crypto exchanges that are user-friendly.
However, investors prefer one over the other depending on their goals and the services and fee structures of the exchanges.
If you have to choose between the two, here are a few major differences between them that will help you in your venture.
Coinbase is based in California, USA, and is considered to be one of the largest crypto exchanges in the world. It is mainly dedicated to trading crypto coins and also supports using credit cards for the same.
Robinhood, on the other hand, is based in New York, USA, and is an exchange that primarily focuses also on securities, ETFs, and options other than crypto trading on the side.
It has a very intuitive user interface and offers commission-free trades, two significant factors that have driven millions of traders towards it.
On the other hand, you will need to download the app of Coinbase Pro in order to enjoy the benefits of the limit order functionality. However, the basic version of it supports buying, selling, sending, receiving, and exchanging crypto coins.
3. Wallet Type
The wallet of Coinbase is the software that is good enough to store your crypto coins safely. Most people believe that this platform has one of the leading and safest cryptocurrency wallets in the industry as of now.
On the other hand, the online wallet of Robinhood is good for buying, selling, and exchanging crypto coins quickly. However, this crypto wallet is simple to use but still comes with a few significant downsides.
4. Wallet Features
In the case of the Coinbase wallet, the private key owner is the user. It is also compatible with MetaMask, MyEther, and 8 others, unlike Robinhood.
The open-source wallet software is based on iOS and Android and supports Wi-Fi connectivity. It comes with transaction fee control and mobile wallet control features.
As for the ownership of the private keys of Robinhood wallet, it belongs to the wallet itself. This open-source software also supports Windows and macOS apart from iOS and Android. Though it supports transaction fee control, it has online wallet control features.
When it comes to earning interest, it is better to go with Coinbase. This is because it offers interest on your holdings automatically.
In contrast, you will not earn any automatic interest when you hold your crypto coins in the app wallet of Robinhood.
6. Customer Support
Since customer support is a key aspect of the popularity of a crypto exchange, Coinbase eclipses Robinhood in that specific aspect. Coinbase has the reputation of updating its customers through its Twitter account.
The reputation of Robinhood takes a hit in terms of customer support and several customers slam it for its poor performance regularly on different sites such as Better Business Bureau, TrustPilot, and Reddit.
When it comes to deposits, both Robinhood and Coinbase let their customers make cash deposits through ACH transfer. However, Coinbase also allows its customers to fund their accounts through wire transfers and debit cards.
In contrast, Robinhood does not offer a diverse range of deposit options which pulls it back a bit.
On the other hand, when it comes to withdrawal after buying crypto coins over Coinbase, you are allowed to send them to another personal wallet without any limitations. Add to that, you can also withdraw cash if you want to your PayPal account.
However, Robinhood does not offer such flexibility and restricts withdrawals of crypto coins. This means that your coins will be with them until and unless you sell them off.
9. Ease of Use
Both Robinhood and Coinbase are quite similar and are easy to use but Coinbase has a slight edge over Robinhood. This is because it focuses on the simplicity of buying an extensive range of crypto coins by streamlining its process.
In comparison, the Robinhood app is not streamlined and therefore is not considered to be as good as Coinbase when it comes to buying crypto coins.
Though both the wallets of Coinbase and Robinhood are insured, once again Coinbase has an edge over Robinhood in this aspect as well. This is because the wallet is FDIC insured up to $250K and also is specialized for crypto trading and is built to high standards.
The platform also ensures two-factor authentication through the Google Authenticator app or SMS, AML, and KYC protections, and cold storage, and multi-signature wallets.
On the other hand, the wallet of Robinhood is insured against theft with Aon. This is an underwriter of Lloyd Insurance and is far lesser known. However, it also has two-factor authentication, cold storage, and biometric controls for accessing the app.
11. Value for Money Score
Coinbase has a higher value for money score. This indicates that it comes with the best price ratio as well as a high quality wallet.
Robinhood, on the other hand, has a lower value for money score due to its lower crypto coin support and comparatively lower security level and features, and of course its poor customer support.
12. Choice of Crypto
When it comes to the range of crypto coins offered to the customers, Robinhood only offers seven different types of coins such as Bitcoin, Ethereum, Bitcoin Cash, Dogecoin, Ethereum Classic, and Litecoin.
However, with Coinbase, you will get a fairly large number of crypto coins to choose from, in fact, over 70. And, all these coins are also of very high quality.
Some of the different types of coins supported by Coinbase include Bitcoin, Chainlink, Ethereum, Dogecoin, and Polygon, Cardano and Ripple as well as other serious DeFi tokens such as Aave, Synthetix, and Compound.
Robinhood strikes the cord in this aspect because it is known for not charging any fees for trading cryptocurrencies on this platform. However, the cost of crypto while buying may be marked by a considerable amount because of the payment for order flow.
Coinbase, on the other hand, charges a fee of around $0.99 for each trade made which is valued under $10. Any trade higher than that value will fetch a fee of 1.49% for each.
There are also fees for wallet purchases and an additional fee of 3.99% for credit and debit card purchases along with a $25 withdrawal fee for wire transfers and a $10 deposit requirement.
14. User Base
The user base of Coinbase is over 35 million as of now which makes it one of the most popular and favored platforms to buy crypto coins.
The primary reason to have such a large user base is that Coinbase focuses mainly on exchange security, the quality of crypto coins offered, and of course, on user experience.
In comparison, the user base of Robinhood is nearly half of that of Coinbase which stands at a bit more than 13 million users.
It is mainly due to the reasons like a poor user experience and limitations imposed on withdrawals of coins after purchasing. However, a major chunk of its user base trades securities and stocks rather than crypto coins.
15. Installing and Setting Up
Though both Robinhood and Coinbase apps are easy to download from the Google Play Store and App Store, the Coinbase app is much easier and faster to set up. In fact, you can start buying crypto coins easily by using your debit card and immediately after installing the app.
On the other hand, Robinhood does not offer such benefits. It will need an ACH transfer prior to that. This means that you will have to wait till you have connected your bank account. This process may be easy but will take much longer than Coinbase to start trading on this platform.
When it comes to accessibility, Coinbase can be accessed in over 100 countries across the globe. Moreover, residents of all the 50 states in the US can legally access this large and popular crypto exchange platform.
As for Robinhood, this platform is accessible to the residents of the United States, and as of March 2021, the residents of 47 out of 50 states can access it. However, they are working towards adding the remaining three states namely New Hampshire, West Virginia, and Nevada.
Apart from allowing trading and withdrawing crypto coins, Coinbase also allows access to news articles on the news feed built in the platform.
Users can also get price alerts to create their own watch list of crypto coins and it also offers built-in education through videos and rewards users with a small amount of the currency.
On the other hand, Robinhood does not come with such unique features. The only unique aspect of it in comparison to Coinbase is that it allows making no-fee trades and placing limit orders.
The process to start using Coinbase is quite simple. It involves signing up and registering with the platform using an email address and password.
You will also need to use a photo ID issued by the government to verify your identity and upload the picture in it to the website. You will need to connect your credit card or bank account after verification is completed and start buying crypto coins.
The process of Robinhood is equally simple and can be done with a few clicks even when you place your orders seeing the prices of crypto coins quickly.
Signing up is similar and you will need a two-factor authentication. While depositing funds up to $1000, connect your bank account and transfer the funds to purchase crypto coins instantly.
When it comes to crypto capabilities, Coinbase once again proves to be better. It is ideally a cryptocurrency exchange and brokerage that offers its users a hosted wallet to use.
If you want, you can also use a personal wallet. This makes Coinbase a really good and favored onramp, especially for the new crypto users.
Robinhood, on the other hand, is more of a stockbroker that also allows converting US Dollars into cryptocurrencies. This means that you cannot send or receive coins to and from any outside wallet.
You will have to first convert your fiat money into crypto and then back to it if you want to make the most out of the rise in price.
20. Payment Methods
The Coinbase exchange supports a diverse range of payment methods which includes PayPal and cryptocurrencies apart from wire transfer and credit and debit cards, as mentioned earlier.
Robinhood, on the other hand, only supports wire transfer and credit and debit card payments.
21. Growth Potential
The growth potential of Robinhood is somewhat subdued due to its inefficient business model. Its growth, whatever it has, is primarily due to the fact that it has disrupted traditional brokerage systems by offering its users free stock and no-fee crypto trades.
Coinbase on the other hand has a notable growth potential due to its impressive features and functionalities, coin and customer support, and security. This has resulted in the growing interest among the public in cryptocurrencies and, in turn, has amplified its growth potential.
22. Revenue Generation
Typically, Robinhood generates its revenue from different sources which include interest on security lending and margin loans. It also earns from subscription fees made by the users for Robinhood Gold as well.
As for the revenues from the transactions, most of it comes from PFOFs or Payments for Order Flows as well as the sale of orders of its clients to high-frequency trading firms depending on the bid-ask spread.
Coinbase, on the other hand, generates almost its entire revenue from the transaction fees, which is quite high for specific types of transactions.
In addition to that, it also earns from providing various crypto-processing services to the businesses. A significant part of its revenue also comes from the USD Coin, which is a digital stablecoin pegged to the US Dollar.
Robinhood is quite popular among the younger investors. According to research, nearly 70% of AUC or Assets under Customers of this platform belongs to people belonging to the age group of 18 to 40 and it helps the platform to generate almost 17% of its total revenue.
Coinbase, on the other hand, is a popular platform among the new and more serious players in the crypto industry who deal with cryptocurrencies specifically.
The growth rate and potential of Coinbase are undoubtedly impressive but the future of it is somewhat uncertain.
This is due to the recent sell-off event in Bitcoin and other crypto assets. If such a meltdown continues, the existing users will liquidate their holdings and leave the platform and it will be difficult for the platform to attract new users to sustain.
In contrast, even though Robinhood has not provided any specific guidance further than the second quarter, it still has the potential to double its revenue in this year.
It is not surprising that the platform is trading at 15 times actually on its sales this year. If it continues this way, it will be much cheaper compared to others.
25. Portfolio Diversification Impact
Coinbase, as said earlier, focuses only on crypto assets which result in added risks due to the volatile nature of the crypto market. Also, it faces stiff competition from trading platforms like PayPal, Square’s Cash App, and, of course, Robinhood.
Robinhood, on the other hand, has a more diverse portfolio which makes it a more reliable platform to overcome the short-term growing pains. It is also less risky since it focuses on the growing number of millennial investors and Gen Z.
Which is Better – Coinbase or Robinhood?
In fact, there is no single crypto trading exchange that can meet all the desires of every user.
It is good to say that your choice will primarily depend on your needs, personal preferences, as well as what the trading platform offers so as to decide which one is better for you to trade your crypto assets.
With the features and functionalities varied yet useful in all, it is really hard to say for sure which eclipses the other.
However, considering a few of the features and functionalities, Coinbase seems to be a clear winner when it comes to cryptocurrencies. However and once again, the final choice is yours based on your needs.
When it comes to choosing between Coinbase and Robinhood, if you are a beginner and you already have an account with Robinhood, it is better to stay with it while trading your crypto coins, at least for now.
However, if you want to withdraw your crypto holdings into your personal crypto wallet, then Robinhood may not be the best choice for you. In that case, Coinbase is more favorable.
This particular crypto trading platform is also a much better fit for those who want to trade cryptocurrencies, learn more about the different types of coins available on the market right now, and withdraw their crypto coins into their personal crypto wallets at any given point in time.
And, when it comes to buying crypto coins such as Bitcoins and others, Coinbase is way ahead of Robinhood because it offers nearly unlimited coin selection, distinct and clear insurance policy, and convenience in making withdrawals.
In addition to that, the platform also offers additional protection to the holdings with an FDIC insurance cover of up to $250K on every wallet.
Typically, Coinbase is just good for retail investors as well as serious crypto traders who want safety and ease in use.
A lot of information needs to be taken into consideration while comparing Coinbase with Robinhood. This article has included most of it to let you know the various aspects in which the two trading platforms differ, to help you in choosing.