Coinbase vs Robinhood - What users should prefer to use? 

Both the Coinbase and Robinhood platforms are based in the U.S. permitting beginners, intermediate traders, and professional traders to sell and buy cryptocurrencies. Though the purchasing of stock available on Robinhood is limited because of less number of cryptocurrencies listed on it. Coinbase has a large variety of listed cryptocurrencies along with numerous payment options.

Most traders often need clarification in selecting a platform that is suitable for them. Therefore, to help them out we bring you this article on the difference between Coinbase vs Robinhood. So without any delay let us now move toward our list of differences.

Difference in Features

Coinbase allows the transfer of funds through the Automated Clearing House Network (ACH), credit card, debit card, wire transfer, or with PayPal. The users of Robinhood are not permitted to make any transaction using their credit or debit card till the coins held by them are sold for cash. 

Supported Currencies

While analyzing the differences between Coinbase vs Robinhood, we thought that this is the point that most of the decision of the user depends. Coinbase offers more than 250+ currencies and in comparison to this Robinhood only has 18 coins listed on it. And the coins listed on Robinhood are also listed on the Coinbase exchange. In this case, why would any trader trade on Robinhood? The list of currencies listed on Robinhood that are also available on Coinbase is given below:

This is not the complete list and if you want to check the full list, you should visit platform’s official website.

Differences in Security

There are slight similarities between the security features of both the exchanges such as 2-factor authentication and Federal Deposit Insurance Corporation (FDIC) insurance. The users of Robinhood have to opt into Cash Management in case of FDIC insurance. Now, here there is a slight edge in the Coinbase. 98% of the funds are kept in cold storage and the rest of the 2% are in hot storage but there is an insurance cover in case of any potential breach on the coins in hot storage.   

Though Robinhood too stores the coins in cold storage the specifics of how much funds are stored are not found anywhere. A function of Device Management is also available to the users of Robinhood. In this, a user can disconnect a device from the account in case any suspicious login from any unknown device appears. 

Charged fees on the Platforms

If it is showcasing commission-free trading then it does not mean that the trading process will be free. Robinhood earns money by working as a broker, they collect brokerage from the makers depending on the percentage of the trade. Hence, you will be charged higher on the Robinhood. 

However, in Coinbase, the fees to be charged depends on various factors such as the size of the order, payment method, location of the user, and prevailing market conditions (liquidity and volatility of the market).

Easy to Use

After reviewing the interface of both platforms, we can say that both exchanges were designed for traders who are beginners. Both of them have a friendly interface. But we are talking about the differences between Coinbase vs Robinhood. It takes less time for a user to complete his sign-up process on Coinbase because the platform accepts all cards as a mode of payment. But in the case of Robinhood, only ACH transactions are allowed. Though both of these are available to be used as Mobile applications for both iOS and Android. 

Final Thoughts

As per our study, we recommend that users use the Coinbase Exchange. Robinhood only focuses on trading a few stocks, EFT trading for beginners. But on Coinbase a user can deal in a large number of currencies. After assessing the platform’s functions, security, ease of use, and fees charged on trading we have concluded that Coinbase is the preferred exchange that should be used. Though it does not mean that just because of our assessment of Coinbase vs Robinhood you should not try to explore the Robinhood exchange.