Trading in cryptocurrency is challenging. You need the right education, tools, and some money to launch your career. Most traders are so keen to start their journey to crypto-millionaire status, that they leave out the most crucial part of the process – choosing the right exchange.
A crypto exchange acts as your touchstone to the market. These exchanges fulfill the role of broker and stock exchange, all in one platform. There are hundreds of exchanges available online, so how do you choose the right one to meet your trading strategy?
Selecting the right exchange is critical to your success as a trader. However, not all of them are suitable for all levels of trading skill, and some may specialize in specific markets. You need an exchange that provides you with the tools and platform you need to trade your favorite crypto assets.
In this Binance vs Coinbase review, we’ll be unpacking the offerings from two of the leading exchanges – Binance and Coinbase.
What Do You Need to Know About Binance?
Binance is a newcomer to the world of crypto exchange. Founded in 2017 by Changpeng Zhao (CZ), the company moved its headquarters from Shanghai, China, to Japan, due to regulatory pressures from the Chinese government banning crypto exchanges due to capital flight from its citizens. However, Japanese regulatory authorities also gave the crypto exchange and hard time, and they eventually relocated to Malta.
Binance is an unregulated exchange, meaning that it does not have registration with any financial services board, and it cannot accept deposits or process withdrawals in fiat currencies such as the US Dollar and Euro.
Binance launched after the ICO boom of 2017 helped it secure $15-million in funding for the business. In August 2019, Binance announced it would no longer be accepting US residents as customers. Current US residents may withdraw their funds from their accounts, but they are no longer permitted to place trades or make deposits.
As of September 2019, US residents can register with Binance U.S, the new American division of the business.
It’s important information about Binance. Don’t stop reading, just proceed to the next section to have better idea for Binance vs Coinbase comparison.
What Do You Need to Know About Coinbase?
Coinbase (GDAX) is one of the oldest operating crypto exchanges, and it’s only been around since 2013.
Software engineers Fred Ehrsam and Brian Armstrong launched Coinbase in June 2012. San Francisco, California, is home to the corporate headquarters of the exchange, and it’s one of the few regulated US-facing exchanges.
Due to its regulatory status, Coinbase enjoys a large share of the American and European crypto markets. The exchange also has the support of leading hedge funds and institutional investment firms that use GDAX to facilitate crypto investments.
With over 30-million customers, GDAX exchanged more than $150-billion in crypto transactions since its inception some 8-years ago.
It’s important to note that Coinbase has a working relationship with the IRS. In 2016, the IRS asked Coinbase to provide it with all the information on customers that purchased BTC between 2013 to 2015. It was disappointing to see GDAX bow to its masters and hand over the information to the US Government.
In 2018, the IRS ruled that Coinbase must provide the institution with personal information on all users completing transactions on the exchange with a value of more than $20,000 in a single year.
So you have basic details for Binance vs Coinbase comparison, but move next to see how many interesting things we have for you!
Binance vs Coinbase, where Market Is Bigger?
Binance is an unregulated crypto exchange. This statement means that the exchange does not comply with international KYC or AML legislation. When you sign up with the platform, you won’t have to verify your identity.
However, due to the unregulated environment, and no KYC policies, Binance may not conduct any transactions in USD or any other form of fiat currency. If you want to trade on Binance, you’ll have to use crypto-to-crypto pairs only.
However, Binance supports over 500 tokens, trading in 612 markets. The company has more than $73-million in liquidity, ranking 3rd for liquidity in the sector. Binance trades more than $4.5-million in adjusted volume every day.
In comparison, Coinbase has nowhere near the selection of coins and tokens that Binance does. GDAX works with Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and that’s it. However, the key difference between Coinbase and Binance is that Coinbase is a regulated exchange that complies with all KYC and AML policies. Therefore, users may purchase crypto through the platform using fiat currency.
Coinbase also accepts credit card payments for deposits, making it very easy to open and fund your trading account.
Which One Is Cheaper? Binance Or Coinbase?
Here we will describe Binance vs Coinbase costs of transactions in details.
Binance has the lowest trading fees in the cryptocurrency sector. At 0.1% per trade, Binance is barely making money off your transactions. Compare that to the industry average of between 0.2% to 0.3% for trades.
Furthermore, if you pay for your trade using Binance tokens (BNB), Binance will slash 50% off your fees, for the first 5-years of your membership to the platform.
On the other hand, fees from Coinbase are somewhat extortionate in comparison. Transactions under $200 have a flat payment rate, regardless of the payment method.
- $0.99 for transactions up to $10.99 and under
- $1.49 for transactions from $11.00 to $26.49
- $1.99 for transactions from $26.50 to $51.99
- $2.99 for transactions from $52.00 to $78.05
If your transaction is over $200, Coinbase adds a variable transaction fee of 1.49% to the total costs. While buying your crypto with a credit or debit card might seem appealing, GDAX will charge you an additional 3.99% for the service, starting for transactions above $78.06.
Withdrawals from the GDAX platform come with a $0.15 fee, but there is no charge for any bank deposits.
Binance vs Coinbase – Security, And Limits
Getting into the world of crypto trading is an exciting prospect. It is important to keep in mind that there are a lot of different trading platforms all who offer different trading experiences. With so many different platforms to consider, choosing the one that meets your needs can often get confusing. To help you narrow down your choices and make comparisons easy, and we want to take a closer look at the security and limits of Coinbase vs Binance.
Coinbase Account Limits
Coinbase sets its limits based on the type of trading you are doing and the currency of preference. These limits are further decided by what level account you hold. They offer levels starting at 0 with the highest being a level 3 user. The more information you provide to verify your account, the higher the account status you will have. A level 2 user can make $25k in daily trades and the top-level 3 user has no limits on their daily trades. The lower levels have limits that are determined by currency used and trader location.
Binance Account Limits
All crypto exchanges require a certain level of verification in order to gain unfettered access to high limits. The same holds true for this platform. At level one, you can withdraw or trade 2 BTC every 24 hours. Once you have fully verified your account, you will be a level 2. At level two you can withdraw or trade 100 BTC every 24 hours. The top tier, level 3, is reserved for whales, which will allow you to trade or withdraw higher than the 100 BTC limit of a level 2 account.
Coinbase Account Security
Coinbase offers two-factor account security which is standard for just about any site that deals with sensitive information. While a mixed password is not mandatory, it is recommended. You can always check your user portal for new addresses, phone numbers, and contact information. IP and device logs are stored in the security portal and unknown devices can be removed and blocked from the account. You can add addresses that you trust to your whitelist which makes trading easier and less prone to trickery and make sure that two-step authentication is on. Withdrawals can only be made to addresses saved in your address book or white list and all new addresses are placed on a 48-hour hold for security.
Is Binance More User Friendly Than Coinbase?
When reviewing the functionality and performance of the platform, we have to say that we have a winner in Binance vs Coinbase, Coinbase is far easier to fund an account. After you verify your identity, withdrawals from the platform as also easy. Binance is another story and requires you to purchase your BTC or crypto on another platform like Coinbase, and then send the coins to your wallet on the Binance platform to fund your trading account.
When setting up your account with Binance, you have two choices: beginner or advanced. If you’re new to trading crypto, then select the beginner option. Advanced accounts come with more technical indicators for your charts and additional trading features.
Coinbase is by far the better choice for newcomers to trading crypto. The dashboard is clean and free of clutter. You also get an overview of your trading portfolio that displays as soon as you log into your account. Coinbase also provides you with the price of the coins you wish to trade and your transaction history.
Experienced users that want more out of their trading platform can upgrade to the Coinbase Pro version.
Can We Trade Via Mobile In Binance And Coinbase?
Both Coinbase vs Binance realize the importance of mobile trading platforms. It’s nice to see that both utilize mobile trading, allowing traders to place trades and check account balances on the go.
Binance vs Coinbase Has Better Support?
When comparing the support, we would have to say that Coinbase comes out as a clear favorite. Since they are a regulated exchange, they have a dedicated support team ready to handle your inquires. If you have any issues with the platform or your account, you can send an email ticket to the support team, and you’ll get a response in 48 to 72-hours.
However, if you need help urgently, Coinbase runs a live chat that connects you to a customer service representative. The live chat wins them this round of the comparison.
Binance offers an email support function on the website, and they also have a presence on Twitter when you can request help.
The Verdict By Bitcoin Tester
If you’re a novice trader getting your feet wet in the market, we recommend you go with Coinbase. GDAX offers a user-friendly interface with a clean dashboard. It’s easy to buy coins using your credit card, and complete instant transactions on the platform.
Binance is the better choice for advanced traders that know what they are doing. The trading tools and dashboard are far more sophisticated, with plenty of tools for technical analysis. The low fees on Binance are attractive, and they are certainly far below what you must pay on Coinbase.
However, Coinbase has yet to experience a security breach, while Binance is already the victim of a hack.
Both exchanges have some of the highest volumes in the crypto market, as well as excellent liquidity, allowing you to get out of trades with minimal slippage.
Overall, we would have to say that Coinbase is our top choice for newbies to trading, while advanced traders will get more value out of the Binance platform. Choose the exchange that suits your trading style, and fund your account today.
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