Coinbase is arguably the most well-known and secure crypto exchange for businesses across the globe. They have established themselves as the leaders for anyone looking to buy or sell cryptocurrency.
At this point, there have been dozens of articles and videos that review Coinbase vs. Coinbase Pro (the trading platform for Coinbase), but most of this content only answers the question for individual investors. If you’re a business owner or accounting firm, one important question remains...
Which is best for my business or clients to use: Coinbase or Coinbase Pro?
It’s a question we are frequently asked by businesses and accounting firms. We will do our best to answer the question at length.
In this post, you will learn the differences between Coinbase and Coinbase Pro and what we recommend as the best use for businesses. Let's dive in.
Cryptocurrency Growth for Enterprise
During the past year, we have seen an explosion of fiat-to-crypto conversion. In numbers, it’s estimated that:
- 100 million bitcoin wallets with value exist
- 1 million average daily bitcoin users
- 11% of Americans currently hold Bitcoin
- Emerging markets increasingly using cryptocurrency (including Nigeria, who reported that 32% of the population owns crypto)
Since Bitcoin and cryptocurrency is inherently decentralized, it’s hard to measure these exact numbers. Regardless, the increasing rate of adoption is easy to note.
2020 is also the year that stablecoins exploded from $5 billion at the beginning of the year to over $20 billion at the time of this writing. With the growth of stablecoins, we are simultaneously seeing the growth of using blockchain for B2B payments.
Lastly, institutional investors finally jumped on board this year. Investor titans like Paul Tudor Jones, Stanley Drunkenmiller, and JP Morgan vocalized their support of cryptocurrency.
With all that being said, Coinbase has played as large of a role as anyone in increasing the adoption of cryptocurrency. But the question still remains: Coinbase or Coinbase Pro?
Overview of Coinbase
It may sound like Coinbase and Coinbase Pro are similar platforms because of their names, but they are actually very different.
Let’s start with the basics: what is Coinbase?
Coinbase, a San Francisco-based cryptocurrency exchange, came on the scene in 2012 with one simple mission: to empower anyone to be able to easily and securely access Bitcoin. It’s safe to say they succeeded.
They’re known for their wallet services and fiat-to-crypto exchange. For the typical person, Coinbase is the best option to enter the crypto market as it’s the easiest way to convert your fiat to crypto and then move it to a crypt-to-crypto exchange (such as Binance).
Today, Coinbase serves more than 35 million people in over 100 countries to buy, sell, store, and earn cryptocurrency. It’s the largest and most well-known crypto company in the world. In fact, there is talk that Coinbase is planning to be listed in the stock market as soon as 2020. If this were to happen, they would be the first-ever major crypto company to go public.
The company has two primary products: the simplified fiat-to-crypto exchange for retail investors (Coinbase) and the trading platform for more advanced-traders (Coinbase Pro).
The latter was founded in 2016 as the Global Digital Asset Exchange, or GDAX. In 2018, it was rebranded as Coinbase Pro, which is what it still called today.
Comparing the Features of Coinbase & Coinbase Pro
First, we want to settle a dispute amongst many Coinbase users: Coinbase Pro has no extra cost or subscription to you. It’s 100% free to use. It just takes some time to learn how to use the product.
As previously mentioned, there are plenty of blogs that will give you an in-depth look into the different features of Coinbase and Coinbase Pro. For the best deep analysis of Coinbase Pro, we recommend checking out this longform blog from CoinBureau.
However, for the purposes of this post, we will detail what businesses care the most about: security measures, assets offered, and fee structures.
How safe is Coinbase Pro?
According to the analysis from Coinbureau, both Coinbase and Coinbase Pro have the exact same security procedures that are used at Coinbase. This means that it’s running on the same infrastructure as Coinbase that’s been “battle tested.” It also means that Coinbase Pro has the same regulatory guidance as Coinbase. Here are some of the ways that your cryptocurrency is kept safe on Coinbase Pro:
- Coin Security - Coinbase Pro operates cold storage for 98% of the coins. They are stored in offline, multi-signature wallets.
- FDIC-Insured - Just like Coinbase, you are insured by the FDIC for USD accounts. This means you are insured for balances below $250,000 by the US government. For other countries
- User Security - Utilize two-factor authentication using SMS verification or Google’s authenticator app. You can also white label your cryptocurrency addresses for your wallet. This means only pre-approved cryptocurrency addresses can withdraw.
Which assets are available for trading?
Both Coinbase and Coinbase Pro offer the same digital assets for you to invest in. The biggest difference is that you can place more advanced trades on Coinbase Pro.
For example, Coinbase Pro offers limit orders, which aren’t available on traditional Coinbase. If you want to see an updated list of the products and markets in Coinbase Pro, check out this page (screenshot of some of the assets below). You can also buy for different markets such as USD, EUR, BTC, and the Coinbase’s stablecoin USDC.
What are the fees?
There is a major difference in trading fees for Coinbase and Coinbase Pro. Most notably, fees are less on Coinbase Pro than they are on Coinbase. This might be one of the big reasons for you to consider using Coinbase Pro rather than Coinbase as a business.
Here is the fee structure for Coinbase Pro shown in this screenshot from their website.
Coinbase Pro operates with a maker vs. taker fee structure. As you can see above, taker fees (which happens when the market price gets filled immediately) are priced higher than maker fees. This is because Coinbase wants to incentivize you to be a maker on their exchange, rather than a taker. You can read more about Coinbase Pro’s fee structures here.
Which is better for business?
The short answer: It depends on your situation and level of crypto understanding.
In this post, you learned that Coinbase is an online wallet where you can buy, sell, and hold cryptocurrency. Coinbase Pro is a trading platform that allows you to execute larger, more sophisticated trades. Both play a part in business.
With Coinbase Pro, you are able to save money on fees. However, you will need to learn and understand how to place sophisticated limit orders.
Businesses can use Coinbase Pro to liquidate payments at a spot price that feels appropriate if they do not need to liquidate immediately. For example, if a business needs to send a payment in crypto tomorrow in BTC, they can set a buy order over night and hopefully get some BTC at a bargain (or at a premium in the morning if it fails).
For beginners, we recommend using traditional Coinbase. If you learn how to place these advanced trades, then you should opt for using Coinbase Pro because of the lower fees. Just understand the risks involved.
Do More with Coinbase
With Gilded, you’re able to invoice and accept payments using a Coinbase account. For businesses who accept and send crypto payments, this is a game changer. You are able to track all of these payments in one place. Furthermore, you can sync these transactions to your Quickbooks account.
Gilded fully utilizes and makes seamless a business' Coinbase profile, linking the cryptocurrency accounts to Gilded. To learn more about Gilded’s Coinbase integration, make sure you read our post for how to use the integration or watch this video from Gilded CEO Gil Hildebrand.
Like we said, businesses who are willing to take a little more risk (in exchange for a higher reward), we recommend using Coinbase Pro. If landing the lowest spot price possible doesn’t matter for you, then keep it simple and stick with Coinbase.
What do you prefer to use: Coinbase or Coinbase Pro? Or do you use a different exchange like Binance or Kraken?
