Coinbase vs. Binance? Which exchange holds the future of Crytpo?
Crypto exchanges have gotten bad publicity with SBF’s FTX collapsing in 2022. With smaller crypto-exchange players out of the game, who will win between Coinbase vs. Binance as the go-to place to buy and sell cryptocurrencies?
The case for Coinbase
For first-time crypto buyers, Coinbase is an easy-to-use platform that gives you access to more than 170 cryptocurrencies for U.S. customers to trade.
Coinbase requires that users make a minimum deposit of $2 before trading crypto. However, they do recommended depositing at least $50 before starting to trade.
The low cost for consumers is an attractive way to get started in crypto. Coinbase also offers fast withdraws (1-2 days) if people need to take their money out or close their accounts.
The fast withdraw process is appealing now given what happened with the FTX scandal that rocked the crypto world in 2022.
Another big pro for Coinbase is that CEO Brian Armstrong is open to working with the U.S. government to provide extra security for users.
In a recent interview with WSJ, Armstrong said:
“I’ve been spending a lot of time in D.C. …Policy is my top priority for this year,” Coinbase CEO Brian Armstrong said. “There’s a recognition that in the wake of FTX we need stronger consumer protection.”
While crypto was intended to be a regulation-free asset class, Armstrong recognizes the importance of working with, instead of against the U.S. government.
This likely gives Coinbase a real shot at long-term success in the U.S. marketplace, which coincides with our Coinbase stock prediction for 2025.
The cons of Coinbase
Perhaps the biggest drawback from using Coinbase to trade crypto is their fee system and daily limit.
Coinbase can take as much as 3.99% on a single trading transaction.
It’s worth noting however that Coinbase states their fees “are calculated at the time you place your order and may be determined by a combination of factors, including the selected payment method, the size of the order, and market conditions such as volatility and liquidity”
Still, whether you’re holding for the long term, or are attempting to free up some capital to fund your lifestyle, taking a percentage of users profits or losses isn’t ideal.
Of course, Coinbase is a publicly traded company, and it’s their fiduciary duty to make as much revenue for their shareholders as possible.
Another drawback of using Coinbase is that it’s not ‘whale’ friendly. This means that you cannot deposit more than $25,000 in a single day.
For example, if you’re sitting on extra cash and you like Bitcoin’s latest price action, you could miss out on some day-trading swings by having to spread out your deposits.
The case for Binance
Without giving away the Coinbase vs. Binance verdict, it must be said for international users, Binance is vastly superior.
For international crypto traders, there are more than 700 cryptocurrencies to trade.
This may seem like overkill, but for those who make a living off trading crypto, it’s a big advantage.
In addition to its extensive selection, Binance offers lower fees compared to Coinbase.
Binance’s fee system is simple: 0.10% spot-trading fees and 4.5% for debit card purchases.
For the more in-depth trader you may already be leaning toward Binance as your main crypto exchange.
Let’s highlight a few cons with Binance before we declare a winner.
The cons of Binance
Perhaps the biggest drawback of using Binance is the limited crypto options for U.S. traders.
Binance.US is their American offshoot of their global platform, and a fraction of it at that.
Since Binance isn’t allowed in the US, Binance.US only offers 70 cryptos to buy and sell.
Another major drawback is that Binance.US isn’t accessible in the economic capital of the world, New York City.
In addition to New York, Binance.US isn’t allowed in Hawaii, Idaho, Louisiana, Texas, or Vermont.
There has been some talks of how Binance.US can avoid these strict regulations by merging with different companies, but US legislators have been blocking this.
Binance.US recently failed to accomplish this in Texas.
Coinbase vs. Binance verdict
From an international standpoint, Binance is the clear-cut winner out of the two platforms.
However, for American traders, Coinbase has a leg up on their younger competitor, making them the best US-based Crypto exchange.
In the long term, I can actually see Coinbase being the go-to platform because of their willingness to work with regulators.
As we’ve seen in global politics, those who play by the rules, usually stand the test of time.
