Coinbase is a good place to start if you want to invest in cryptocurrencies. However, if you use Coinbase without looking further, you will up up paying fees that might build up over time.
Trying to understand out what Coinbase’s costs are, let alone avoiding them, can be challenging. This tutorial will walk you through Coinbase’s costs and what you can do to get the most out of your money.
Coinbase charges what kinds of fees?
Coinbase charges two sorts of fees on transactions: margin or spread fees and what the site refers to as the Coinbase Fee. Here are several examples:
- Margin or spread fees: Coinbase defines the margin (or spread) as a service charge of up to 2.00 percent that is added to the exchange rate on Coinbase Pro. This is the name of Coinbase’s exchange, which handles all transactions.
- The Coinbase Fee is the most difficult to understand since there are so many variables at work. Depending on the area, product, and payment method, the user will pay a flat charge or a variable percentage of the transaction.
The flat fees charged by Coinbase are as follows:
|TOTAL TRANSACTION AMOUNT||TRANSACTION FEE|
|$10 or less||$0.99|
|More than $10, less than or equal to $25||$1.49|
|More than $25, less than or equal to $50||$1.99|
|More than $50, less than or equal to $200||$2.99|
Here are the variable fees for U.S.-based users:
|PAYMENT METHOD FOR PURCHASE OR PAYOUT METHOD FOR SALE||EFFECTIVE RATE OF CONVERSION FEE (AFTER WAIVER)|
|U.S. bank account||1.49%|
|Coinbase USD wallet||1.49%|
|Debit card buy||3.99%|
|Instant card withdrawal||Up to 1.50% of any transaction and a minimum fee of $0.55|
When you preview a transaction on Coinbase, both costs are taken into account. A consumer in the United States who spends more than $204 will be charged the 1.49 percent fee up to the maximum purchase amount.
You may confirm this by making a transaction on Coinbase.com and previewing the purchase at $205. It should be noted that the cost simply increases in lockstep with the quantity spent, up to your limit.
As you can expect, these fees may add up to a significant amount of money that you could otherwise invest. This begs the question, how can you avoid Coinbase fees?
How to Reduce Coinbase Fees
Understanding the relationship between Coinbase and Coinbase Pro is essential for lowering costs on Coinbase.
What Exactly Is Coinbase Pro?
Coinbase Pro, formerly known as GDAX, is the primary trading platform for Coinbase orders. It is a site for cryptocurrency aficionados that aims to give a more complete view of the cryptocurrency markets, allowing traders to make more educated decisions.
Transfers between them are quick and free because they are both controlled by Coinbase. This is crucial since the costs applied for the identical activity on Coinbase Pro are significantly cheaper than on Coinbase.
These transactions are broken out in a more technical manner. They adhere to what is known as a maker-taker model. Here’s a rundown of the several sorts of transactions you may make:
- Taker orders: Orders placed at the market price and filled promptly are designated “taker” orders and are subject to a fee ranging from 0.04 percent to 0.50 percent.
- Maker orders: Orders that are not filled promptly are placed on the books and classified as “maker” orders, with costs ranging from 0.00% to 0.50%.
- Partial orders occur when a portion of an order is filled immediately, but the remainder is left on the books to be filled later. If this occurs, the first portion is evaluated on the “taker” side. The balance will be
Keep in mind that with Coinbase Pro the fees are based on the amount of the transaction, so you actually pay less for trading more:
|PRICING TIER||TAKER FEE||MAKER FEE|
|Less than $10K||0.60%||0.40%|
|$10K to $50K||0.40%||0.25%|
|$50K to $100K||0.25%||0.15%|
|$100K to $1M||0.20%||0.10%|
|$1M to $10M||0.18%||0.08%|
|$10M to $50M||0.15%||0.05%|
|$50M to $100M||0.15%||0.05%|
|$100M to $300M||0.08%||0.02%|
|$300M to $500M||0.05%||0.00%|
|$500M and up||0.04%||0.00%|
How to Reduce Coinbase Fees Using Coinbase Pro
The attraction of Coinbase Pro for trading should be evident now that you understand what it is and how the fees operate. Here are the actions to take:
- Sign in to Coinbase Pro using your Coinbase credentials.
- Under the wallet balance column, select “deposit.”
- Select the currency you want to send (USD, BTC, etc.).
- Choose Coinbase.com as your payment method.
At this point, you’ll be able to check the currency’s available balance in your Coinbase wallet. Again, transactions between the two platforms are free and quick, and deposits for digital assets are not limited.
Trades performed using Coinbase Pro aren’t as obvious as those conducted with Coinbase — you’ll need to utilize exact quantities rather than trading the comparable number of USD — but the fees are significantly cheaper.
The method for withdrawing your assets from Coinbase is the same, only you’ll pick “withdraw” rather than “deposit” beneath the wallet balance section. Transfers are immediate, however, there is a daily maximum of $250,000. If you need to withdraw more than this on a frequent basis, you can request an increase in limitations using your profile’s limits page.
Coinbase Pro vs. Coinbase
As an example, suppose you wanted to buy $2,000 worth of bitcoin. Why $2,000? Because that is the daily limit set by default on both platforms when making ACH transactions.
That purchase would cost 1.49 percent, or $29.36, on Coinbase. You may make the identical purchase with Coinbase Pro for just $10, which is roughly one-third of the price imposed by Coinbase.
You may also use a debit card to make Coinbase purchases. However, once again, you will pay dearly for the ease. The cost for utilizing debit cards on Coinbase is 3.99 percent, totaling $76.74 for a $2,000 purchase.
Are Coinbase fees justified?
For individuals with a passing interest in cryptocurrencies or who are just getting started, the fee may be worth it in return for the ease of trading in a fiat currency and utilizing a relatively straightforward interface.
It is simple to reduce fees while utilizing the Coinbase network. It only requires a little know-how. For most new traders, the restrictions placed on your Coinbase Pro account will be more than sufficient to allow for routine activity. Although it appears scary, utilizing Coinbase Pro is a terrific method to enhance your awareness of the bitcoin sector and earn trading expertise.
Why are investors interested in cryptocurrency and Coinbase?
People all across the world are becoming increasingly interested in cryptocurrencies, and the temptation is obvious. Traditional stock or asset investment may have appeared out of reach or boring to some individuals. However, cryptocurrency is an exciting, volatile asset with daily value fluctuations and a general rising tendency.
Many people believe that cryptocurrencies will solve the difficulties caused by centralized banking institutions. Others are optimistic about the underlying technology. Others merely witness the action and don’t want to lose out on a chance to make some fast money.
There are various ways to get involved in the crypto sector, but centralized exchanges like Coinbase are a popular starting point for many individuals due to their simplicity, convenience of use, and ability to trade famous coins like Bitcoin and Ether.