Cryptocurrency aficionados, your hour has finally come–meaning that many apps are joining the ranks and beginning to offer crypto as a tradable asset. But for the savvy investor, does this mean trying a new platform? Or, possibly, using a variety of them?
Here are our thoughts on two of the biggest movers and shakers in the crypto world–Coinbase and eToro.
Here are the facts:
- Founded in San Francisco in 2012
- Founders: Brian Armstrong and Fred Ehrsam
- Tradable assets: Cryptocurrency (32 coins)
- Available in all U.S. states except Hawaii
- Fees: vary based on what you’re trading, but are on the higher end of the spectrum unless you use Coinbase Pro
- Mobile and web availability
- Founded in Tel Aviv in 2006
- Founders: Yoni Assia, Ronen Assia, and David Ring
- Tradable assets: depends on where you’re located, but includes stocks, commodities, ETFs, forex, CFDs, and cryptocurrency
- Available in over 60 countries around the world, including those in Europe, Africa, South America, Asia, Australia, and some states in the U.S.
- Fees: varies based on where you are, but includes an account minimum, low activity fees, and a withdrawal fee
- Mobile and web availability
New to Crypto
Investopedia called Coinbase “a standard on-ramp for new investors,” meaning it’s easy to use and has tons of resources to help you learn the ever-changing market of cryptocurrency. The interface is intuitive and is full of statistics for you to make your smart, educated crypto trading choices.
One of the downsides for users new to crypto is that they’ll learn that fees can be steep. Coinbase has relatively high fees unless you sign up for Coinbase Pro (which is free!).
eToro is also ideal for traders who are new to crypto. There are lots of great graphics and resources on the 15 coins the platform offers. They have video courses and in-depth guides on the science behind the coins.
But the most convenient feature of eToro for those of us who don’t have time to study the markets is copy trading. This is when you select a popular investor to be the trader you copy, and then every time they make a trade, you do, too. This is done automatically though the app and does not require you to trade the same dollar value as the investor (dollar values of public profiles are not even shown). Instead, you set the amount of money you want to trade, and the app calculates the proportion that the investor traded.
Crypto is a volatile, difficult market to understand. Because of this, educational tools and portfolio examples of respected traders are critical for an app geared toward first-time and even intermediate traders. Coinbase and eToro both deliver these in spades.
With both Coinbase and eToro, the user does not have control over their own wallet unless they specifically download a separate app. That means that the platform holds onto the wallet and you only have access to the actual coins if you withdraw your holdings and store them on your own wallet (a harddrive, for example).
This will deter some investors because of the inherent decentralized component of crypto. But, with a few extra steps, you can easily have your own wallet while trading on Coinbase or eToro.
Ease of Use
Coinbase has an option to set up recurring orders on coins, which we believe is a highly valuable function. Setting up a recurring order allows you to dollar cost average the price of one or many coins that you want to invest in long-term. By buying a set amount of crypto each week or month rather than putting all your money in at once, you account for the volatility of the coin by getting an average overall price.
Coinbase is also known for having a large amount of liquidity, which makes the spreads cheaper and therefore helps reduce fees for trading.
eToro is particularly easy to use if you choose to copy another trader. Browsing through the vetted public portfolios, you can select a trader based on assets traded, risk aversion, percent return, and number of other copiers. The data on these public traders is robust and helpful, leaving out the dollar values of the trades so the exact details can remain private.
Other than using the Copy Trader feature, eToro has an attractive interface that is easy to use. Their social feature, where you can connect with other traders from around the world and even message them in another language with a translate option, is another plus.
While Coinbase has a lot of fees, you can easily work around this by upgrading to Coinbase Pro. With the pro version, you receive better charts, more detailed resources, and much lower fees. The platform is more complicated and the interface less intuitive, but the savings you get on trading will pay off. You can still trade on mobile and web with pro, too.
We highly recommend getting a Coinbase Pro account. Not only is it completely free to open and hold an account (yes, we said that correctly) but it allows you to do more with your money. The details for opening or converting your existing account can be found here.
Trading fees are overall lower on eToro than on Coinbase. There are no trading fees, while Coinbase’s trading fees can get up to 3.99%. eToro has a minimum balance of $50, higher than Coinbase, which is $0. eToro allows up to $2 million of trading per day, while Coinbase only allows $25,000 unless you submit a request.
eToro is not a completely free platform, however. eToro makes money by charging you a percentage of the spread, or the difference between the bought value and sold value. Details on the spread percentages can be found here.
Coinbase is perfect for beginners just getting into cryptocurrency. The variety of articles, charts, and analytics on each coin are valuable for investors who want to learn quickly without having to leave the app.
With Coinbase, you can even get paid to learn the ins and outs of different coins. The Earn section of the website offers a variety of classes on up-and-coming and complex coins so you can better understand the technology behind the coin before investing in it. Upon completing a course you receive a small amount of that coin in return (not more than $11 of a single coin as of April 2021).
eToro has the Trading Academy, which offers videos and articles for beginning investors. They also have fairly technical guides on the engineering and founding of certain coins. This makes it easy for beginners to find much of the information they need to start investing in crypto.
Monetize your Skills on eToro
Savvy investors who want to build a following and make money on their ability to make money can find success with eToro by becoming a Popular Investor. By doing so, you allow your profile (without dollar amounts) to be shown publicly to other investors who might want to “copy” you.
The more copiers you have, the more you get paid. The full pay schedule for Popular Investors can be found here.
Is Coinbase Pro free?
Coinbase Pro is free to sign up for and hold an account. The fees are also considerably less than a regular Coinbase account. It doesn’t cost anything to transfer your account to Coinbase Pro. They calculate fees with a maker-taker approach.
Is Coinbase safe?
Coinbase takes a variety of security measures to ensure your money is safe. While crypto cannot be insured by the FDIC or the SIPC, Coinbase takes other measures to make sure your money is safe, such as holding 98% of funds offline in cold storage and backing the online 2% with insurance.
What functions does Coinbase Pro have?
Coinbase Pro has lower fees than a regular Coinbase account, allows crypto-to-crypto transactions, gives you access to more resources and charts, and allows you to place market, limit, and stop orders. All Coinbase Pro deposits must be made through a bank account, which varies from standard Coinbase, which allows you to deposit through a credit card.
Is Coinbase a good place to buy Bitcoin?
Coinbase is a great place to start investing in crypto (including bitcoin), but we recommend upgrading to Coinbase Pro to reduce your fees and get access to more resources.
Is eToro available in the U.S.?
Yes, crypto trading on eToro is available in most U.S. states, but not all. A full list of states can be found at the Q&A here.
Is eToro safe?
Yes, eToro is a safe trading platform that is regulated and insured. They are new to the U.S. and do not offer U.S. stocks, so many American traders may not have heard of them yet.
How does eToro make money?
eToro makes money by charging a percentage of the spread, or the difference between the buy and sell price of a coin. The full list of spread prices can be found here.
Coinbase and eToro are both great options for investors looking to get into crypto. Coinbase offers more coins and the ability to upgrade to Coinbase Pro, which is perfect for more experienced investors who want to trade with reduced fees and fewer restrictions on their trading choices.
eToro works well for traders who want to “copy” professional traders’ profiles and therefore not have to worry about studying the markets. The platform is also ideal for traders who want to make money on their skills, because the standards to apply to become a Popular Investor are low and the pay-offs can be high if you gain a following by making consistent returns.
Since Coinbase is a U.S. company, they have more popularity within the U.S. than eToro does. But, since eToro built a large following internationally, they could rise above domestic platforms, especially if they begin offering more tradable assets for U.S. traders.
Overall, both platforms have a lot to offer new and experienced investors alike!