Since the title of this article caught your attention, it may be safe to assume that you are already familiar with “cryptocurrency”. To put it simply, cryptocurrency is a digital currency — in the form of coins, which you can use to pay for goods and services. Coin ownership is then stored in an online ledger, which makes use of cryptography for secure transactions.
As cryptocurrency is unregulated, its value can skyrocket, potentially earning you big bucks. In spite of being faced with skepticism, cryptocurrency continues to be used and traded in the past decade without any signs of slowing down. In fact, it has become a viable investment option for millions of Americans as evidenced by its astronomical surge last year.
Bitcoin is not only the first cryptocurrency to be traded, but is still the most well-known.
The Importance of Crypto Exchanges
If you are familiar with cryptocurrency or have looked it up, then you might have come across Coinbase. Founded in 2012, Coinbase is currently the leading crypto exchange platform in the U.S. and has positioned itself as one of the most-trusted cryptocurrency platforms for newcomers. It offers advanced security measures, user-friendly interface and strict regulatory compliance.
However, Coinbase may easily be confused with Coinbase Pro. Here, we provide answers to the top questions concerning Coinbase Pro — fees, advantages over Coinbase and most importantly, if it’s worth it.
Coinbase vs. Coinbase Pro
So what is Coinbase? It’s one of the most recognized and trusted digital currency exchange companies in the industry. Interestingly, this platform provides two ways to join the cryptocurrency market depending on the type of trader/investor you are.
Coinbase’s platform makes it incredibly easy to purchase your first Bitcoin and other supported cryptocurrencies. It is a great way to get started on buying and trading.
Meanwhile, Coinbase Pro — formerly known as GDAX (Global Digital Asset Exchange) is better suited for advanced traders who can appreciate the additional graphs and data it provides. More importantly, this platform offers lower trading fees compared to Coinbase. The differences end there as Coinbase Pro also offers ease of use, great liquidity and solid security.
Here’s a more detailed look at the main differences of the two:
Design and Usability
Coinbase offers an exceptionally straightforward and beginner-friendly interface. However, this simplicity may turn off experienced investors as it does not offer more information and features. In addition, you can only buy or sell as per the offered fees and price.
Coinbase Pro on the other hand, provides a wealth of information which is very appealing for more advanced traders. Its user interface also offers a hassle-free experience. Neat and intuitive, it’s perfect for those who want to do more than purchase coins. Depositing and withdrawing cryptocurrency is also easy through Coinbase Pro. You are given three options when placing an order — market order, a limit order and a stop order.
For institutional investors, there’s Coinbase Prime. Its features include margin finance, execution algorithms, access via professional third-party platforms, high-touch execution OTC, dedicated institutional coverage and much more.
Majority of Coinbase Pro’s desktop features are also available in its mobile app for iOS and Android. This includes live updates to charts, prices and even placing limits and market orders.
Fees
Despite being beginner-friendly, Coinbase fees can be higher than Coinbase Pro. This makes the latter more appealing to cryptocurrency investors. There’s also the incentive that the more you trade through Coinbase Pro, the less fees you’ll have to pay.
Coinbase Pro uses a maker-taker fee model, which lets you pay between 0.00 to 0.50% for each transaction depending on the number of transactions you made in a month’s time. If you’re a taker (meaning you immediately fill a market price order), this system can be appealing as it lets you take advantage of volume-based discounts. However, maker fees are still lower than taker fees.
Deposits and withdrawals are both free of charge if the user is transferring cryptocurrency or making an ACH deposit or withdrawal. Otherwise, Coinbase Pro charges users with the appropriate fees.
Learn more about Coinbase Pro’s fees here.
Trading and APIs
Another trading advantage that Coinbase Pro offers is it allows margin trading of up to 3x on USD pairs (on BTC/USD and ETH/USD pairs, up to $10,000) or 2x (for BTC/EUR pair up to 3,000 EUR, and for LTC/USD pair up to $500).
This allows you to borrow funds from a lender to trade, which then increases potential buying power while allowing lenders to earn interest based on market demand. Coinbase Pro has access to 29 types of cryptocurrencies (more than Coinbase) and 57 markets making it a really rich platform.
You can also make investing or trading easier by obtaining Coinbase Pro API keys. This lets you link your account with other apps such as the Crypto Pro portfolio tracker. Doing so allows you to import data and view real-time portfolio statistics.
For a more detailed explanation of Coinbase Pro’s APIs, click here.
Safety and Security
Just like Coinbase, Coinbase Pro is fully licensed and regulated in the U.S. and other supported countries, which means it complies with The Bank Secrecy Act, The USA Patriot Act and other money transmission laws.
Security is one of its strongest points. As only 2% of its customers’ cryptocurrency funds are held online, these are insured in case of loss. Additionally, all US dollar deposits are covered by FDIC insurance up to $250,000. Euro deposits on the other hand, are held in customer-owned custodial accounts so Coinbase Pro can’t seize these if ever the exchange collapses. The exchange also has a registered BitLicense with the New York Department of Financial Services, and is required to submit annual financial audits.
Coinbase Pro adopts multiple security measures like:
- Two-factor authentication for all accounts
- SSL cryptographic protocol encryption on all web traffic
- Cold storage for 98% of all crypto assets
- AES-256 encryption on all wallets and wallet keys
Verdict
Coinbase owns Coinbase Pro and neither charge investors for signing up on the platform. Both offer similar features such as topnotch security, clean and intuitive UI and ease of liquidity.
Coinbase Pro offers more features and is ideal for advanced traders. It’s also a wise choice for users who want to avoid higher fees unlike with Coinbase, and do more than just purchase cryptocurrency. Despite its more complex features, it’s still easy to use, learn and explore. Users who will make the switch from Coinbase to Coinbase Pro won’t have difficulty adjusting.
Putting all these in consideration, Coinbase Pro shows why it’s one of the best cryptocurrency exchange platforms in the industry. We highly recommend it for traders who want to do more with crypto.
You may sign up on Coinbase Pro by clicking here.