BlockFi vs. Coinbase – Forbes Advisor

Coinbase and BlockFi are two of the most popular crypto exchanges. Even if you’re new to crypto, you’ve probably heard of both players, which are heavy hitters in the industry.

Coinbase is a publicly traded company that offers various crypto services, from trading to interest-bearing accounts. BlockFi is a private firm whose services also extend beyond the basics.

Let’s take a closer look at how these well-known crypto exchanges compare.

BlockFi vs. Coinbase: Similarities

With more than 150 cryptos to choose from, Coinbase has a significantly larger offering. BlockFi only offers about 40 coins to trade globally and only 15 in the U.S.

Crypto Wallets

Many crypto exchanges offer their own online hot crypto wallets. Both Coinbase and Blockfi offer their users hot wallet options.

If users want to move their crypto offline into a cold wallet, they’ll have to provide one of their own. It’s usually recommended that you store their coins offline for better security.

Crypto Rewards Cards and Loans

Crypto reward cards are similar to traditional rewards cards, the only difference being that the users’ rewards are returned to them in cryptocurrency.

BlockFi and Coinbase offer qualifying customer loans and rewards cards. Of course, each card has certain restrictions. The BlockFi rewards debit card isn’t available to residents of New York State, and Hawaiian residents can’t access the Coinbase card.

With crypto loans, the amount of money a customer can borrow depends on the amount of crypto in their account that they can use for collateral.

Security

Security is always an important issue for crypto exchanges. Unfortunately, both BlockFi and Coinbase have been subject to significant security breaches.

In March 2022, a data breach at Hubspot granted hackers access to BlockFi customer data. This issue was separate from a BlockFi security breach in 2020 caused by a compromised employee SIM card. BlockFi hired a new chief security officer following the 2020 incident.

In July 2021, Coinbase revealed that 6,000 users were hacked between March 2021 and May 2021. Hackers spoofed aspects of the company’s two-factor authentication system, and some customers lost funds from their accounts.

Coinbase stated that they reimbursed customers for their lost cryptocurrency and fixed the flaw.

BlockFi vs. Coinbase: Differences

Users will want to ensure the platform they choose is available in their country and region. BlockFi is unavailable to U.S. residents in New Mexico, New York, Vermont, and West Virginia. The only U.S. state where Coinbase is currently unavailable in Hawaii.

Cryptocurrency Selection

Coinbase offers more than 150 coins, which means most coins that anybody might want to trade will probably be there.

U.S. BlockFi users only have access to 15 coins. If you’re looking beyond Bitcoin and some of the most popular altcoins, you may not find them on BlockFi.

Trading Fees

Coinbase has higher trading fees than many comparable cryptocurrency exchanges. Coinbase’s fees can run more than other large exchanges like KuCoin or Binance.US.

On Coinbase’s simple trading platform, users pay a spread fee on each trade in addition to the regular trading fees for makers and takers.

These fees are calculated when the order is made, and they can vary depending on several factors such as location, payment method and trade size. They are included to lock in the trade rate before the trader decides.

On Coinbase’s advanced trading platform, fees start at 0.4% for makers and 0.6% for takers. That’s for traders with less than $10,000 in trading volume over the past 30 days. In the next pricing tier, trading $10,000 to $50,000 within 30 days, the maker and taker fees are 0.25% and 0.4%, respectively.

Trade fees on BlockFi are a bit nebulous. The exchange uses a spread fee structure for trades, and these variable fees are added to trades to cover the market price of coins sourced from third parties. This fee is priced at the time of trading, but for BlockFi users, it’s usually up to 1%.

In addition, BlockFi charges withdrawal fees for most cryptos. For BTC, users can expect to pay 0.00025 BTC for each withdrawal, and for ETH, users can expect to pay 0.0135 ETH per withdrawal.

Some coins, however, can’t be withdrawn from BlockFi’s platform to a user’s wallet. These include Dogecoin, Bitcoin Cash (BCH) and Algorand (ALGO).

Coinbase doesn’t have these restrictions. They also don’t charge withdrawal fees for certain electronic withdrawals (e.g., ACH) made through the Coinbase app. However, they will charge network fees for wallet-to-wallet send.

Other Features

For more advanced traders, Coinbase offers staking and margin trading. BlockF doesn’t offer either of these advanced trading features.

In addition, BlockFi doesn’t offer trading pairs in fiat currencies. This means all cash on the platform must be converted to stablecoins like USDC or Gemini Dollars (GUSD), before trading can take place. Coinbase doesn’t have this issue.

Finally, Coinbase offers limited trading in derivatives other than cryptocurrency and non-fungible tokens (NFTs). BlockFi only offers trading in a small number of cryptocurrencies.

Who Should Pick BlockFi?

Many crypto traders will find something of value on BlockFi. However, given the platform’s limited selection of cryptocurrencies and lack of advanced trading features, beginning traders are probably the best candidates for BlockFi.

BlockFi customers need to be aware of the company’s spread fees of up to around 1%, and their withdrawal fees can add additional pricing to many transactions.

In addition, although not all cryptocurrencies can be withdrawn to a private wallet, the BlockFi Wallet feature does make managing cryptocurrencies on the platform relatively easy.

Finally, BlockFi’s Rewards Visa Signature Card can help users add additional wealth to their accounts.

BlockFi Pros:

• Offers trading of Bitcoin, Ethereum, and other leading cryptos
• Rewards available through BlockFi’s Rewards Visa Signature Card

BlockFi Cons:

• Staking is unavailable.
• Trading pairs are not available in fiat currency

Who Should Pick Coinbase

From beginners to advanced crypto enthusiasts, just about anybody can appreciate how easy it is to buy and sell cryptocurrency on Coinbase. But many newer users may not realize there is an alternative to Coinbase’s high fees.

As any investor knows, trading fees can quickly add up. However, there’s still a lot to like about Coinbase. It offers a host of cryptocurrencies for trading. Many advanced trading features users seek, such as limit and stop orders. Users can also stake Algorand, Cosmos (ATOM), Ethereum, Tezos (XTZ) and Cardano (ADA).

In addition, Coinbase offers users solid security and protection for their crypto assets. In fact, with an AAA security rating, Coinbase is currently ranked among the top 10 most secure cryptocurrency exchanges on the security-rating platform CER.live.

Coinbase Pros:

• A wide selection of cryptocurrencies
• Top-notch security
• Offers margin trading

Coinbase Cons:

• A higher fee structure than competitors
• A limited number of coins available for staking.