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Coinbase

Coinbase Review
Trader's rating 2.8
Editor's rating 4.1

Our Experience

 

When testing the direct purchasing service, provided by Coinbase, we were relatively satisfied. After entering our debit card details it was saved as a payment method. We must notе that our card was 3D-secured, which appears to be a mandatory condition. Having your card stored in the website, as opposed to having to enter the details a second time (which is the case with some websites, dealing with external payment providers) is a huge benefit.

 

Here is a preview of the order screen:

The commission charged was slightly lower than the maximum of 4%, and we had full price transparency. When compared to the 8%, charged by Bitstamp (for direct card purchases), this is obviously preferable. The rate at which we bought Bitcoin was around €14 off the current market price, at GDAX. This is quite reasonable considering the fact we are talking about a volatile asset, trading around  €6,500 at the time of purchase. We tried comparing it with the rate provided by other exchanges, but the price differences (especially since we are talking about EUR trading) were much wider.

 

Trading Accounts

 

 

Account type Initial weekly limit Leverage Fees
Standard €325 None Up to 4%

 

Coinbase is one of the leading US companies in the world of crypto currencies. It operates two separate brands. One of them is Coinbase, a more retail consumer oriented platform for buying Bitcoin with fiat currencies, much like Bitstamp. On the other hand, GDAX (Global Digital Asset Exchange) is a more advanced crypto currency trading platform. This review will be focused on Coinbase.

 

The company, security of funds

 

Company Country Regulation
Coinbase USA NY BitLicense

 

Coinbase operates out of the US, with many subsidiaries around the world. It was the third company to be awarded the New York BitLicense. The story behind this license is quite controversial. In short, the New York Department of Financial Services (NYDFS) wanted to make the Big Apple a “Bitcoin trading hub”, much how it is one of the major centers of traditional finance. The idea, dating from 2015 wasn’t met with much enthusiasm by the leading companies, as many of them preferred to avoid application. Among the dozen who did, Coinbase obtained the license in January of 2017. The entire process is apparently so time (and effort) consuming, a lot of other major players opted out of it, which makes the license borderline useless. 

 

When it comes to crypto exchanges, hacking is an important topic. That being said there haven’t been any major hacks at Coinbase, although numerous individual cases have been reported. Some involve the hackers going past the two-factor authentication barrier, which one would believe to be very secure.

 

As we mentioned above, Coinbase is the retail-oriented brand of the company. As such it accepts fiat currencies and allows an instant purchase of several coins (more on the list, later). The vast majority of user complaints against Coinbase involve the size of the commission fees which the company charges. They vary by region and payment method, but go as high as 4%.

 

In 2018, Coinbase acquired an e-money license from the Financial Conduct Authority (FCA), which allows it to provide payment services in the UK and issue e-money. Abiding by the FCA requirements, Coinbase will be keeping clients in segregated funds and will observe operational standards on par with the other regulated financial institutions.

 

Additionally, Coinbase is backed by a lot of investors, including major players in “traditional finance”. This is another factor which fans of the decentralized aspect of crypto currencies do not enjoy. 

 

Trading conditions

 

Trading instruments (cryptocurrencies)

Only a few coins are available at Coinbase, but they are the majors – Bitcoin, Ethereum and Litecoin. Don’t forget this is an entry-level service, which is aimed at people who are not that familiar with the world of crypto currencies. If you would like to buy less known coins (or altcoins), you could do that at another exchange, after transferring your newly acquired BTC/ETH/LTC there.

 

Weekly Limits

After verifying your e-mail, telephone, ID and credit card, at Coinbase, you can beginning purchasing coins. Our initial limit was €325 per week (via Credit Card). This may vary for you, based on your location (US clients will surely get a USD level). This level can be increased after you reach the maximum and some time has passed. This is done as a security measure and one should not feel frustrated about it.

 

Leverage

Coinbase does not offer margin trading. This is the more accepted practice, when dealing with crypto currencies. The forex brokers who offer Bitcoin trading, on the other hand mostly provide CFDs on it and margin trading is allowed. For a full comparison of trading crypto currencies on an exchange and with a forex broker read this post

 

Fees

The commission structure at Coinbase is one of its criticisms. If you decide to deposit via Credit Card, for instance, you can buy your chosen coin directly. While this may appear to be convenient, it comes at a price – for most countries the commission fee on such a purchase can go as high as 4%. 

 

Alternatively, you can fund your account with fiat currencies, which you can then use to trade. In that case the fees are set at 1.5%, which is pretty high. However if trading is what you are looking for, the company’s other brand – GDAX (as well as many others) are alternatives.

 


Trading platform

 

Coinbase does not provide a platform, as much as it offers an interface similar to an online banking application. Here is an overview (click to zoom-in):

 

 

There is a basic chart in the top section, allowing you to switch between the three supported instruments and multiple timeframes. On the bottom you have a column with all of your wallets with the company as well as a transaction history column. Overall, it doesn’t get any simpler than this. That being the case, we must reiterate, this is only the “real-money payments” brand of the company, while a more dedicated platform is also available at GDAX.

 

Methods of payment

 

When it comes to the methods of payment available at Coinbase, they include Bank Transfer, Credit/Debit Card and PayPal (only for US clients). While we discussed the transaction fees above, it’s worth pointing out that no additional fees are charged for crypto currency transfers to other exchanges or wallets.

 

Conclusion

 

Coinbase is one of the major players in the crypto currency space. The company is focused on allowing people who are not familiar with Bitcoin and allows them an easy way of acquiring crypto currencies. While there isn’t any trading platform to speak of, the company has another brand (GDAX) which provides exactly that. We feel it would be much better for Coinbase to honestly state their trading fees are higher, but you can use your account at their other platform, in a big banner upon account cration. Here are Coinbase’s pros and cons: 

 

Pros

Cons

New York BitLicense Few altcoins available
No major hacks yet High trading fees
Accepts Bank Transfers and Credit Cards  
Easy to use interface  
Ability to transfer crpyto to wallet  

 

bitFlyer

bitFlyer Review
Trader's rating 1
Editor's rating 4

Account type

 

Account type Minimum deposit Leverage Fee
Standard Undisclosed 1: 15 Max 0.15% for BTC

 

BitFlyer is one of the most popular cyptocurrency exchanges in the Far East. It is also among the world leaders, in terms of volume.

 

The company, security of funds

 

Company Country Regulation
bitFlyer, Inc. Japan JFSA, NY BitLicense

 

BitFlyer is based in Japan. The local regulators have made some changes in the way they treat cryptocurrencies in the past. Currently, they are treated as assets, upon which capital gains (profiting from the price movement) is taxed. BitFlyer was one of the first companies to received the JFSA (Japanese Financial Services Agency) license, along with the major competitors from QUOINEX

 

Update: BitFlyer also received has the regulatory approval of the New York Department of Financial Services (NYDFS) in November 2017. The company is set to start offering Bitcoin trading vs the USD, while adding altcoins in the future. We will update this review, when the service is fully implemented.

 

The company has been around since 2014 and has not had any hacking issues yet. The most important thing to note, from a western trader’s point of view is that trading is done (mostly) against the Japanese YEN (JPY), unlike most exchanges where you can trade cryptocurrencies against one another, the US Dollar and occasionally the Euro. You may need an account with a forex broker, such as FXTM, just to hedge your currency risk.

 

The user reviews on BitFlyer (written in English) are mostly positive. This is a good sign, as the company maintains multilingual support. 

 

Trading conditions

 

Trading instruments (cryptocurrencies)

As mentioned above trading at BitFlyer is done against the Japanese Yen. This applies for the plethora of Bitcoin instruments, which include Spot BTC trading, Margin BTC trading, and BTC Futures (not to be confused with Bitcoin Cash Futures). Furthermore Etereum is available for trading, against Bitcoin.

 

Minimum initial deposit

BitFlyer does not give any guidelines about a minimum deposit level. Forex brokers, on the other hand usually announce their minimum entry barriers. For instance, you can open an account with XM, with only $5.

 

Leverage

BitFlyer offers a maximum leverage ratio of 1:15. However, in order to be allowed to trade on margin, one must go through a tougher verification process. This type of ratio may sound very small to someone who is used to forex trading, as lots of brokers provide 1:500 or even higher levels. 

 

Do keep in mind cryptocurrencies often move far more wildly than fiat currencies. While a major pair will rarel move more than 1.5 – 2% percent per day, the Bitcoin often has gains or losses exceeding 10%. This explains the lower leverage offering by BitFlyer, which by the way is one of the highest offers provided by crypto-exchanges. For a full comparison of trading Bitcoin with a forex broker and on an exchange click here.

 

Fees

Fees at BitFlyer vary slightly for the different services, which they provide. They offer directly exchanging JPY to BTC, the fees for which go as high as 0.15% for the lowest volume traders. As a comparisson, Bitfinex charges this type of fee only for the market "makers", while takers pay a slightly higher one. The maximum fee for ETH/BTC is 0.20%. Here is the full information, as provided by the company (click to zoom-in):

 

 

Lightning FX stands for the margin trading of BTC/JPY. Futures on the other hand are similar to exchange traded futures. However the liquidity in them appears to be far lower, which is to be expected. We would not recommend them to inexperienced traders.

 

 

Trading platform

 

BitFlyer provides two trading platforms. They are both web based, which is not unusual for cryptocurrency exchanges. One of them is the so called Bitcoin Easy Exchange, which serves, to facilitate direct JPY to BTC transfers. It is what people, who want to get their funds converted to Bitcoin, before transferring them would use. Albeit simple, it does the job. Here is a preview (click to zoom-in):

 

 

 

The company also offers the BitFlyer Lightning platform. It feels much more like a forex trading platform, as it is designed with the trader in mind. This is the platform where the 1:15 leverage ratio is provided. Here is what platform looks like (click to zoom-in):

 

 

There is a chart on the left, with lots pre-loaded indicators. The order book looks pretty solid (in the middle) and the tape is locate on the right. Several more fields are located below these, similarly to the MetaTrader 4 (MT4) terminal. Charting appears to be decent, with several technical indicators in place. Furthermore the charts can be set to full-screen mode.

 

There are multiple themes available, if you do not like the black and orange feel. One thing we must mention are the maddening sounds, which are turned on by default. Every time a transaction is made, more importantly, every time there is a movement of a bid/ask in the order book, play a sound. Luckily, these can be turned off quite easily.

 

Methods of payment

 

BitFlyer accepts Bank Transfers, Credit Cards issued in Japan and Bitcoin transfers. Although the company has a clear focus on its internal market, a foreigner can still use their services, albeit not with his credit card. Users of online payment systems, such as Skrill are also left out.

 

Conclusion

 

BitFlyer is the number one cryptocurrency exchange in Japan. It also rates pretty highly among the global volume charts. The most specific thing is that trading is done against the Japanese Yen (JPY). There are multiple platforms and services available, including margin trading. Despite being focused on its domestic market, the company appears to be reaching out to the rest of the world and with commission levels so low, customers will come. Here is a summary BitFlyer’s pros and cons:

 

Pros Cons
No major hacks yet Trading against JPY
Accepts Bank Transfer and Japanese Credit Card Does not accept Credit Card, from countries other than Japan
Competitive commissions No altcoins available (ex. ETH)
Relatively nice trading platform  
Allows margin trading and futures  

 

Forex
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