Robinhood or Coinbase? What is the Difference and Which is Better for Crypto?
For Robinhood or Coinbase, most people think that a clear winner will emerge. There are many issues to consider. The features lead to a great decision.
Outside Robinhood or Coinbase Users Ultimately Matter
The great thing about software development is about the user.
So, software developers create each app with a type of user and an experience to deliver.
Now, of course, we remember the GameStop issue.
Robinhood ultimately had to suspend GameStop stock trading for a brief period.
It has given rise to many people having to choose between both for cryptocurrency trading.
And Robinhood recently decided to allow cryptocurrency trading on its platform.
It made the currency space start considering the features of both platforms.
Robinhood or Coinbase, whatever the choice, users are always after the best experience.
Robinhood or Coinbase? Similarities Exist!
Believe it or not, while both Robinhood and Coinbase have different functions, both platforms have similar traits that make for great competition now and in the future.
Both Coinbase and Robinhood have easy-to-use interfaces for the buying and selling of assets.
This straightforward process makes the process of cryptocurrency trading a breeze for users.
And simplicity is key as cryptocurrency trading.
Cloud services are a critical component in trading assets.
It is another similar feature for both trading platforms.
It may seem cliché, but simplicity in the cryptocurrency trading process is critical for App users.
So, if it comes to either Robinhood or Coinbase, it is one aspect where both platforms show similarities.
Robinhood Offers Zero Trading Fees
One plus that Robinhood offers the marketplace is zero trading fees. These zero trading fees are what made the trading platform financial services app well-liked in the first place.
This strategic advantage had made Robinhood become popular among Millennials and Generation Z.
Zero trading fees also mean new platforms have to keep up with the times and ensure their business model remains attractive to users.
Coinbase has a Transparent Order Book
It has become apparent that Robinhood has been selling its order flow business to high-frequency trading entities. Two years ago, this cropped up and is still a matter of concern to many people.
It also has many people questioning Robinhood’s ethos of being for Common Street rather than Wallstreet.
As it is known, when order flows go in the direction of high-frequency trading platforms, they usually go into the so-called “dark pools”.
These dark pools are opaque grey markets that operate outside stock exchanges.
Speculatively, most of these dark pools work to the advantage of the big institutions in the financial space.
These institutions almost always use high-frequency automated trading.
So, Robinhood may not be for the little guy, as we have all assumed in the first place.
The Coinbase order book on the other hand is quite transparent. The order book tells everyone everything that’s happening on the exchange.
So, while many users would want to sacrifice affordability for transparency, we live in a world where everyone wants everything to be in plain sight.
For Coinbase, this is a strong selling point.
Robinhood Offers limited Cryptocurrency Movements
Robinhood does not allow withdrawals of cryptocurrency tokens bought on its platform to other wallets.
That is despite the recent announcement on Robinhood allowing cryptocurrency trading.
This limitation is quite similar to the PayPal limitation as well.
A user may buy cryptocurrencies on the platform, he or she may only be exposed to the value appreciation or appreciation.
It comes without the ability to transfer this value out in the form of cryptocurrency tokens.
And for many members of the cryptospace, this is a big no-no.
Coinbase, on the other hand, allows users to buy and withdraw their cryptocurrencies to other wallets.
It is one of the advantages of it being strictly a cryptocurrency exchange.
That limits the Robinhood appeal to a significant degree.
Many members of the cryptospace view cryptocurrencies the same way they view other assets.
The existence of hardware wallets is proof of this.
When mainstream entities like Robinhood try to limit cryptocurrency activities to trading only, this creates a big problem for these people.
Many of them are hardcore enthusiasts and early adopters of cryptocurrencies and their underlying technologies.
These limitations will also be limitations of the adoption of Robinhood as a cryptocurrency trading platform.
Coinbase Pro is Expensive
One major issue that many people have with Coinbase is the expensive price that comes with Coinbase Pro usage.
Robinhood on the other hand has just launched its Robinhood pro for $5 monthly, which is a steal compared to other such Pro services.
It could make the Robinhood trading App even more popular, as cryptocurrency trading will become easier for the newbies who will want Pro services to make well-informed cryptocurrency trading decisions.
Another thing that Robinhood’s Pro App has going for it is the prior market research and intelligence.
Coinbase Pro has no such thing. Its expenses though are tied to the trader’s trading volume.
For professionals, it’s great, and they may have workarounds for this sort of thing.
Regular everyday Joes and Janes still need all the extra stuff that helps to educate them.
The market research helps the professionals as well.
They just have their sources of information when it comes to cryptocurrency trading and probably pay higher fees too.
So, that’s a plus for Robinhood.
When it comes to deciding to trade cryptocurrencies with either Robinhood or Coinbase, Robinhood’s Pro App makes the decision tilt in one direction.
Coinbase is Traditionally a Cryptocurrency Company
This fact may be hard to ignore, but Coinbase is a traditional cryptocurrency institution that has been around since 20th June 2012.
It means Coinbase is one of the first cryptocurrency corporate institutions to exist in the space.
It also gives the cryptocurrency exchange a traditional lead ahead of other institutions that are just entering the space.
For one thing, Coinbase and other companies like it had founding principles that have come to define this industry.
So, naturally, they have the brand authority associated with cryptocurrencies that many companies lack.
Consumers will tend to trust them far more quickly than they would other regular financial trading platforms with their cryptocurrency assets.
However, this advantage can also become a strategic disadvantage as many users who want some exposure to cryptocurrencies may not want to go the full route but use these other mainstream Apps to get this exposure.
So, while we may have new entrants into the cryptocurrency space, we may not have them come in as hardcore users of cryptocurrencies.
Then the other issue is the exit of core developers and industry leaders into mainstream institutions.
It effectively levels the playing field as the influx of talent into mainstream trading platforms allows for a spread of the cryptocurrency subculture in such institutions.
As such, cryptocurrency trading becomes an activity everyone can try out and enjoy at his or her level without too much risk.
So, both Robinhood and Coinbase are even in this case.
The Final Verdict? It’s a Tie!
While most people think that there are opposites when choosing either Robinhood or Coinbase, the truth is that such decisions aren’t that simple.
However, the ultimate choice of cryptocurrency trading platforms has to do with the user, and we know as the saying goes: “The customer is King”.
Many customers would prefer Robinhood for many of the above reasons and more while others Coinbase.
The point is for customers to know what they are getting into before making such decisions.
And that is the point.