Robinhood vs. Coinbase: Which is best? (2024)

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Robinhood vs. Coinbase: The Biggest Differences

Robinhood Investing and Coinbase are both popular online investment platforms offering a vast range of investment choices for active traders. Both investment apps let you trade multiple cryptocurrencies like bitcoin, ether, dogecoin, and more.

Coinbase is one of the best cryptocurrency exchanges as it offers various educational resources, financial tools, human advisor access, and low fees.

But the platforms each have evident differences that you should consider before signing up. Robinhood is ideal for traders looking for exposure to multiple asset types as it offers stocks, ETFs, options, cryptocurrencies, and ADRs. Coinbase, on the other hand, is a better option for traders in search of trading features specific to cryptocurrencies.

Is Robinhood Right for You?

Robinhood is one of the best investment apps for beginners suited for active traders wanting to invest in multiple assets, including cryptocurrencies, stocks, and ETFs. It also offers fractional shares and various account options including IRAs and margin accounts.

Ways to Invest with Robinhood

Robinhood mainly offers stocks, options, ETFs, ADRs, IPOs, and cryptocurrencies. There's no minimum to open an individual brokerage account, but you will need at least $1 to access trading for fractional shares and crypto trading. Robinhood currently has 18 digital assets for trading, including bitcoin, ether, dogecoin, and more.

Robinhood offers the following accounts:

• Individual brokerage accounts
• Cash management accounts
• Margin accounts
• Retirement accounts (traditional IRAs and Roth IRAs)

In order to open a margin account, you must be a Robinhood Gold member and meet a $2,000 account minimum. If you're planning to use Robinhood Gold, know that it has a $5 monthly fee. But this membership includes cash management perks, fractional shares, American Depositary receipts (ADRs), access to Morningstar professional research, market data from Nasdaq, and instant deposits.

Robinhood charges $0 for options contracts (most brokerages charge $0.65 per options contract).

IRA accounts offer $0 trading commissions and a 1% match on every dollar you contribute (with no cap). It provides account tools like a recommended portfolio builder and SIPC account protection up to $500,000.

Robinhood Account Features

Robinhood's virtual library provides a variety of financial research on investing, options trading, and more. However, only Robinhood Gold members can access additional research and market insights. With a Robinhood Gold membership, you can earn up to 5.00% APY on non-invested funds through the Robinhood Cash Management Account. Non-Gold members only earn up to 1.50% APY.

Non-Gold members have a current margin rate of 11.75%. They can also access IPOs, set up recurring automatic payments, have guidance on first trades, and receive 24/7 customer support.

Robinhood now offers a crypto wallet for users to securely store digital assets.

Is Robinhood Trustworthy?

Robinhood Investing currently has a D rating from the Better Business Bureau. The BBB states that the reason for the low rating is due to a pattern of complaints that investors were unable to withdraw funds from their accounts, as well as government action taken against the business.

The investing platform was scrutinized in late 2021 after it paused trades of Gamestop and other popular stocks. Robinhood reopened trading, but this only brought more attention to Robinhood's payment for order flow (PFOF) practice. The case was dismissed by a Miami federal court in November 2021.

Robinhood agreed to pay $65 million in order to settle the lawsuit filed by the SEC in December 2020. The SEC claimed that Robinhood used misleading information on options trading and other instances of systemic supervisory failures.

Is Coinbase Right for You?

Coinbase is one of the best dogecoin crypto apps that provides a wide range of services, including crypto exchange services, digital storage, crypto rewards, staking, and more. Coinbase is great for US and abroad traders wanting to invest a majority of their funds in cryptocurrencies, as well as access staking, crypto rewards, and asset storage.

Ways to Invest with Coinbase

Coinbase offers three account types: Basic, Pro, and Advanced Trade. Pro accounts, however, are not accessible to new users as it is currently in the process of being phased out and replaced with Advanced Trade accounts.

Coinbase offers:

• Individual brokerage accounts
• Business accounts
• Retirement accounts (traditional IRAs, Roth IRAs, and SEP IRAs)
• ESG Portfolios (offered through Coinbase Wallet)
• Custodial accounts

It offers a large selection of cryptocurrencies, such as bitcoin, ether, litecoin, dogecoin, and many others. It had previously supported a handful of stablecoins but has recently stopped offering BCH, ETC, XLM, and XRP. Coinbase still supports USD Coin (USDC), which is pegged to the value of US dollars.

Coinbase Account Features

The Basic Coinbase account offers things like trading, crypto rewards, interest rewards, digital storage, and mobile access. You can also access crypto trading and the Coinbase debit card. Coinbase Earn is the staking rewards feature that allows users to engage with educational resources and earn up to 10% APY for holding coins and tokens.

Coinbase provides several institutional services, like commerce services, fundraising services for crypto startups, asset-listing software, and analytics services. Moreover, Coinbase Prime is an institutional trading platform that offers cold storage for digital assets. There's also an NFT beta platform.

Pro accounts allow users to access real-time market data, trading APIs, and other advanced charting tools. New users can now access similar features with a Coinbase Advanced Trading account, plus advanced trading charts, 0% trading fees, and a 30-day free trial for Coinbase One — but it's unclear what monthly fees the service charges after the free trial period ends.

Is Coinbase Trustworthy?

Coinbase currently has a B+ rating from the Better Business Bureau. The BBB states that the reason Coinbase has received the lowest grade is due to the business's failure to respond to more than 2,000 complaints, and government action that has taken place against the business.

In July 2021, Coinbase Global, Inc. was charged by Louis Oberlander, Henry Rodriguez, and Christopher Underwood for allegedly violating securities laws. The case was later dismissed in May 2022.

On January 2, 2023, Coinbase entered into a settlement agreement with the New York State Department of Financial Services after the department claimed Coinbase failed to comply with the New York banking law and DFS regulations. Coinbase is set to pay a $50 million penalty, and it agreed to invest another $50 million toward its compliance program.

On June 6, 2023, the SEC accused Coinbase of not registering the offer and sale of its crypto asset staking-as-a-service program, as well as operating as an unregistered national securities exchange, broker, and clearing agency. Coinbase denies these claims as it remains under investigation by the SEC.

Robinhood vs. Coinbase: Which is Right for You?

Compared to Coinbase, Robinhood Investing is the better option for investors who want to merge traditional investments, such as stocks and ETFs, with more digital assets like cryptocurrencies. Although Robinhood has a significantly more limited crypto selection than Coinbase, Robinhood offers a large variety of investment options.

On the other hand, Coinbase does offer a large selection of digital assets and access to rewards and staking features. So if you're looking to mainly invest in a range of digital assets, Coinbase may be the better option. It also offers crypto rewards as an educational incentive to learn about different assets, and you can stake coins to earn regular interest. Robinhood also does not offer crypto exchange services for businesses.

Overall, Robinhood is the best choice for those looking for the best of both worlds with trading for crypto, stocks, ETFs, and options. However, Coinbase is the best option for crypto-focused traders.