Robinhood vs Coinbase - Should you enjoy the flexibility of trading both crypto and stocks or should you simply stick with decentralized blockchain-native solutions? A recent dramatic encounter between fervorous Reddit traders and Robinhood should clear this debate once and for all. But do note, there are also plenty of features that make one trading platform better than the other.
After the Reddit-based WallStreetBets community turned the investing world upside down with GameStop mania, the Robinhood trading app finds itself shedding users.
Why? In what will surely go down as one of the worst self-own moves in history, Robinhood restricted trading on GameStop, AMC, Blackberry, and Dogecoin (amongst others) — and even went as far as forcing traders to sell their positions.
The move positioned Robinhood against the WallStreetBets movement and is causing millions of people to delete the app. During the chaos, Elon Musk made a very public suggestion about where WallStreetBets should invest by changing his Twitter bio to read #bitcoin.
Ready to buy Bitcoin but feeling unsure about where to turn?
Coinbase is the perfect alternative to Robinhood. Below, you'll find all the differences between the two and what makes the Coinbase app better than Robinhood for buying crypto.
Coinbase vs. Robinhood: A quick comparison
App features: Both Coinbase and the Robinhood app support simple market buy and market sell orders. They differ because Robinhood also allows for limit orders, whereas you'll need to download the Coinbase Pro app to get the limit order functionality.
Earn interest: By merely holding your cryptocurrency in the Coinbase app, you automatically earn interest on your holdings. In contrast, having crypto in your Robinhood app wallet does not yield interest.
Customer support: Robinhood's reputation for customer support isn't too hot. Across sites like TrustPilot, Better Business Bureau, and Reddit, Robinhood is routinely slammed for poor customer support, especially in light of forcing investors to sell their stocks. Coinbase has a far better reputation for customer support and routinely updates customers via Twitter.
Deposits: Both Robinhood and Coinbase allow for cash deposits via ACH transfer. But, this is where similarities end. Coinbase additionally allows customers to fund their accounts via debit card and wire transfers.
Withdrawals: After buying cryptocurrency with Coinbase, you are free to send your tokens to another wallet without restrictions. You can also withdraw your cash to a PayPal account if you choose. On the other hand, Robinhood restricts cryptocurrency withdrawals, meaning once you buy crypto using Robinhood, your tokens are stuck there until you sell.
Easy to use: Robinhood and Coinbase are similarly easy to use, with a slight edge going to Coinbase for streamlining the simplicity around buying a wide range of crypto assets.
Wallet security: Both Coinbase and Robinhood crypto wallets are insured. However, the edge here goes to Coinbase. Apart from specializing in cryptocurrency and building wallets to high standards, Coinbase wallets are also FDIC insured. In contrast, Robinhood wallets cover theft insurance with Aon, a lesser-known Lloyd's Insurance underwriter.
Crypto selection: Currently, available cryptocurrencies at Robinhood are limited to seven, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. At Coinbase, the number of available cryptocurrencies is not only far higher but much better in terms of quality. You'll find Bitcoin and Chainlink at Coinbase, but you'll also find serious DeFi tokens like Aave, Compound, and Synthetix.
Fees: Robinhood is famous for not charging any fees to trade — that popular policy extends to cryptocurrencies. Coinbase charges $0.99 per trade under $10 and 1.49% per trade after that.
Why Coinbase is better than Robinhood for buying cryptocurrency
In the comparison just above, Robinhood comes through with a few advantages like free crypto trading and in-app limit orders. The latter is quite an advantage for those who like to exert greater control over a trade.
However, those advantages are slight compared to how Coinbase excels for buying Bitcoin and other cryptocurrencies.
Today, Coinbase has 35 million users and is considered the de facto king of all crypto exchanges. That's because Coinbase has grown by focusing on user experience, exchange security, and the quality of crypto assets offered.
Robinhood's user base is somewhere north of 13 million users, but the majority of them are trading traditional stocks and assets rather than crypto. As such, the lack of focus on the crypto trading experience is tangible, as Robinhood is severely slacking in tokens on offer as well as the basic ability to withdraw them after purchasing.
Coinbase seamlessly integrates its wallet and the standalone Coinbase Wallet app, with the rest of the cryptocurrency environment. After making your purchase, withdrawing your tokens to a more secure hardware wallet is simple.
While the usual advice from crypto veterans is never leaving your coins on an exchange, Coinbase wallets are FDIC insured, meaning that in the event of a hack, your hard-earned crypto wealth is safe. Moreover, in its nearly ten years of operation, Coinbase has never been hacked or otherwise compromised.
Because Robinhood doesn't allow you to withdraw your cryptocurrency from its app, it's reasonable to feel there is a security risk in the event that you lose your phone. In terms of insurance, Robinhood wallets are insured against a large scale theft, but the policy doesn't seem anywhere near as robust as Coinbase's FDIC coverage.
Coinbase also gives advanced traders the option of using Coinbase Pro app or web version for making more complex trades like limit sell orders.
Finally, Coinbase supports buying and selling for well over 45 cryptocurrencies, while Robinhood's selection stands at a mere seven available cryptocurrencies. If you want to buy the latest DeFi crypto project, Robinhood doesn't have you covered, but Coinbase certainly does.
Does Robinhood offer any advantages over Coinbase for buying Bitcoin?
Overall, Coinbase is better than Robinhood for buying Bitcoin. That doesn't paint the whole picture, though.
Robinhood does have one substantial advantage going for it: zero fees crypto trading.
Even though Coinbase has superior cryptocurrency selection, a better app for investing in crypto, and an almost 10-year history as a company, it's hard to argue with zero fees for trading.
So, if buying Bitcoin without spending a penny on fees is the deciding factor for you, then you might want to give Robinhood another look.
Additionally, if you just want to buy Bitcoin, Ethereum Bitcoin Cash, or Litecoin for a quick trade, Robinhood might be more to your liking. You can't withdraw your assets, but if you're moving quickly, that shouldn't matter.
Setting up Coinbase vs. installing Robinhood
Both Coinbase and Robinhood are easy to download and install from the App Store or Google Play store.
Points go to the Coinbase app for speed and ease of setup.
You can easily buy cryptocurrency with your debit card minutes after installation, whereas Robinhood requires an ACH transfer. That means you'll have to connect your bank account, which, while easy, takes longer than punching in your debit card details.
Conclusion: Coinbase is better than Robinhood for buying cryptocurrency
No matter how you slice it, Robinhood is nowhere near on par with Coinbase for buying Bitcoin and other cryptocurrencies. A limited selection, questionable insurance policy, and highly inconvenient lack of withdrawals add up to make Robinhood a poor choice for crypto traders.
Coinbase hits the sweet spot between serious cryptocurrency traders and retail investors looking for the best way to safely and easily buy Bitcoin.
Besides, the FDIC insurance covering every wallet and an impressive array of tokens help you get invested in the future of finance with confidence.
Ready to buy Chainlink, Bitcoin, or any of the other 40+ cryptocurrencies on deck at Coinbase? Download the app for iOS and Android devices.
A multisig wallet is a type of blockchain wallet that requires more than one signature. It is typically used by exchange owners and investment groups who wish to introduce an additional layer of security.