Choosing the right platform to buy, sell, and trade digital assets is important. The two most popular ways of doing so in the US are Coinbase and Robinhood. But which one is the better choice for you? Let's dive into the features, pros, and cons of both platforms to help you make a decision.

What Are Coinbase and Robinhood?

Before we jump into the comparison, let's briefly introduce these two popular platforms.

Coinbase: The Crypto Specialist

Coinbase, founded in 2012, is a dedicated cryptocurrency exchange that has become one of the most trusted names in the industry. It's known for its user-friendly interface, wide selection of cryptocurrencies, and robust security measures.

Robinhood: The All-in-One Investment App

Robinhood, launched in 2013, started as a commission-free stock trading app. In 2018, it expanded its offerings to include cryptocurrency trading. Robinhood aims to make investing accessible to everyone, offering a simple interface for trading stocks, ETFs, options, and crypto all in one place.

Coinbase vs Robinhood: Key Features Comparison

Let's break down how these two platforms stack up against each other in several key areas.

1. Cryptocurrency Selection

When it comes to the variety of cryptocurrencies available, Coinbase takes a clear lead.

• Coinbase: Offers over 250 cryptocurrencies, including popular coins like Bitcoin, Ethereum, and Solana, as well as many lesser-known tokens.

• Robinhood: Provides access to only 15 cryptocurrencies, focusing on the most popular options like Bitcoin, Ethereum, and Dogecoin.

If you're looking to diversify your crypto portfolio beyond the major players, Coinbase is the better choice. However, if you're only interested in the most well-known cryptocurrencies, Robinhood's selection might be sufficient.

2. Fees and Pricing Structure

The fee structures of Coinbase and Robinhood are pretty similar.

Both Coinbase and Robinhood incorporate a spread into the quoted price for simple buy, sell, and conversion orders. This spread increases transaction success likelihood and allows these platforms to lock in your quoted price temporarily, though the spread may vary between similar transactions.

We’ve seen that the pricing between Coinbase and Robinhood are in the same range. If you’re looking for lower fees, it is worth using Coinbase’s advanced trading platform since there is a lower spread. However, it is significantly more difficult to use.

3. User Interface and Ease of Use

Both Coinbase and Robinhood are known for their user-friendly interfaces, but they cater to slightly different audiences.

• Coinbase: Offers a clean, intuitive interface that's easy for beginners to navigate. It also provides a more advanced platform for experienced traders who want more detailed charts and order types.

• Robinhood: Features a minimalist design that's incredibly easy to use. Its simplicity makes it particularly appealing to first-time investors.

While both platforms are user-friendly, Robinhood's streamlined approach might be preferable for absolute beginners or those who want a simple trading experience.

4. Additional Features

Both platforms offer features beyond basic buying and selling, but Coinbase provides more crypto-specific options.

Coinbase additional features:

• Staking rewards on select cryptocurrencies

• "Learn and Earn" program to gain free crypto while learning

• Coinbase Card for spending crypto

• Advanced trading platform

• Coinbase wallet to interact with dApps (decentralized applications)

Robinhood additional features:

• Stock and ETF trading

• Options trading

• Cash management account with competitive interest rates

• Fractional shares

• Credit card

If you're solely focused on crypto, Coinbase's features are more appealing. But if you're looking for a platform to manage both your crypto and traditional investments, Robinhood's all-in-one approach would be advantageous.

5. Security Measures

When it comes to storing your digital assets, security is paramount. Both Coinbase and Robinhood have implemented strong security measures, but Coinbase edges out slightly.

Coinbase security features:

• 98% of user funds stored in offline cold storage

• $250,000 FDIC insurance on USD balances

• Additional crime insurance policy

• Two-factor authentication (2FA)

• Biometric fingerprint logins

Robinhood security features:

• Majority of crypto holdings stored in cold storage (exact percentage not disclosed)

• $250,000 FDIC insurance on USD balances

• Two-factor authentication (2FA)

• Biometric fingerprint logins

While both platforms prioritize security, Coinbase's longer track record in the crypto space and more transparent security practices give it a slight edge.

6. Wallet Options

The ability to control and move your cryptocurrency is an important for many investors.

• Coinbase: Offers both custodial storage on the exchange and a separate non-custodial wallet app (Coinbase Wallet). This gives users the flexibility to keep their crypto on the exchange for easy trading or move it to a personal wallet for full control.

• Robinhood: Primarily offers custodial storage, meaning your crypto stays on the platform. They've recently introduced Robinhood Wallet, a separate app for self-custody, but it's more limited compared to Coinbase's offering.

If having full control over your cryptocurrency is important to you, Coinbase provides more robust options.

Who Should Choose Coinbase?

Coinbase might be the better choice for you if:

1. You want access to a wide variety of cryptocurrencies beyond just the major players.

2. You're interested in features like staking and earning rewards on your crypto holdings.

3. You value having the option to move your crypto to a personal wallet.

4. You're looking for in-depth educational resources about cryptocurrency.

5. You prefer a platform solely focused on cryptocurrency.

Who Should Choose Robinhood?

Robinhood could be the right pick if:

1. You're new to investing and want a simple, streamlined platform.

2. You're primarily interested in major cryptocurrencies like Bitcoin and Ethereum.

3. You want to manage your crypto investments alongside traditional assets like stocks and ETFs.

4. You prefer a straightforward fee structure, even if it lacks transparency.

5. You're okay with keeping your crypto on the platform and don't need to transfer it to external wallets.

Conclusion

Both Coinbase and Robinhood have their strengths and weaknesses when it comes to crypto investing.

Coinbase offers a more comprehensive crypto experience with a wider selection of tokens, additional features like staking, and more robust wallet options. It's a solid choice for those who are serious about crypto investing and want access to a broad range of digital assets.

Robinhood, with its user-friendly interface and integration with traditional investment options, is an excellent choice for beginners or those who want to dip their toes into crypto alongside their stock investments. Its commission-free model is attractive, but be aware of the hidden costs in the spread markup.

About Arch

Arch is building a next-gen wealth management platform for individuals holding alternative assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading and staking services, powered by BitGo.