Before weighing up eToro vs Coinbase, it’s easy to forget that it’s never been easier to invest in cryptocurrency; Both have user-friendly platforms and while eToro is a social trading platform and multi-asset brokerage based in the UK, Coinbase is a crypto-based exchange in the US.
Both eToro and Coinbase are major bitcoin trading platforms. With 35 million members in 100 countries, Coinbase is the largest bitcoin exchange holder and bitcoin exchange.
With millions of users in over 170 countries, eToro is the world’s largest “social trading” platform that allows novice traders to implement trades, follow other traders and copy the strategies of more experienced traders like myself. They are designed to provide different experiences: eToro focuses on building a social trading environment, whereas Coinbase concentrates on delivering a comprehensive set of investment options.
While both have their strong points, neither has a particularly strong charting platform so it would be wise to consider a third-party option such as TradingView which I’m an affiliate for.
When it comes to providing a crypto trading exchange, the platforms overlap despite their variances in functionality. Both platforms are suitable for novices, but there are several key distinctions to be aware of before choosing one and if you’re a cryptocurrency beginner, check out these 11 things you should know before getting started.
Remember also, both eToro and Coinbase are trading platforms that offer a gateway to the crypto markets. They allow you to place orders and implement your strategy but nothing more. If you want to backtest your trading ideas, TradingView is a good option or if you want to learn how to profit from short to medium price swings as I do, check out the Swing Trading 101 program.
eToro vs Coinbase: At a Glance
- User-friendly brokerage and social trading platform, featuring the ability to engage with other traders and the ability to purchase funds using PayPal (outside the US)
- A beginner-friendly exchange with an easy-to-use interface allows you to withdraw money to PayPal.
For non-US customers, there is a $5 withdrawal fee, a $10 fee after one year of inactivity, and conversion fees for non-USD deposits.
Trades cost 0.50%, credit card purchases cost 3.99%, Coinbase wallet or bank account purchases cost 1.49%, and wire transfers cost $10 to deposit and $25 to withdraw.
KYC includes two-factor authentication, cold storage, FDIC-insured USD balances, multi-signature capabilities, and private keys.
KYC, 2FA, biometric fingerprint logins, cold storage, FDIC-insured USD balances, and AES-256 encryption for digital wallets are available.
Sell, buy, limit orders and market orders
Sell, buy, receive, send, and exchange
Max. Trading Amount
Most coins, including Bitcoin, have sent restrictions of $50,000/transaction and $200,000/day.
The amount you can spend depends on your payment method and region. ACH transfers of up to $25,000 per day for customers in the United States.
eToro vs Coinbase: Fees
It’s tough to compare crypto fees because each exchange has its fee structure. They aren’t always upfront about how much they charge, either.
Customers at eToro, for instance, do not pay a fee to deposit money, whether by bank transfer, credit/debit card, or any other manner. eToro does, however, charge a higher spread than other exchanges (ranging from 0.75% to 5%, depending on the currency).
Other eToro costs could quickly mount up. If you want to withdraw your assets to the eToro wallet, you’ll have to pay a 0.5% fee (limited to $50). For individuals who have not signed in for a year or more, there is also a $10 monthly inactivity cost. Clients from outside the United States will be charged a fee to convert their deposits into US dollars, as well as a $5 withdrawal fee.
Coinbase, on the other hand, does not charge clients to transfer funds to its wallet, although most deposits do. Buying directly from your bank account costs at least 1.49%; however, an ACH transfer is free.
The cost of purchasing cryptocurrency using a debit card is 3.99 %, plus a % margin. Cryptocurrency trading fees are not entirely transparent on Coinbase: it states that it calculates them when you make a transaction.
Using a debit card to purchase $200 worth of Bitcoin (BTC) on Coinbase would cost $7.98, plus a 0.5 percent spread. On eToro, the same transaction would only cost 0.75 percent of the spread.
However, the spread on eToro to buy Ethereum (ETH) is 1.90 percent, whereas Tezos (XTZ) costs 5%, therefore buying Tezos on eToro could be more expensive. You may be charged additional fees in the future.
Overall, depending on the type of crypto trading you want to undertake, the costs on eToro are likely to be lower, albeit U.S. clients must make a minimum deposit of $50. However, you should consider how you intend to utilize the trading platform and what expenses will be involved. Unexpected charges may eat into your profits if you don’t plan.
eToro vs Coinbase: Accounts and Features
EToro combines a wide range of trade options with intelligent integration of external crypto wallets to appeal to informed traders. Outside of the United States, eToro also enables leveraged trading.
Of course, the well-known CopyTrading feature is what sets this platform apart from the rest. Except in the United States, CopyTrading allows any user to mimic another trader, participating in the leader’s winnings and losses.
Although Coinbase has a signaling tool that provides anonymized statistics on top performers, it is far from the transparent, open platform that eToro offers. Users of eToro come to the platform hoping to be copied. Coinbase is currently under investigation for allegedly publishing data without the permission of prominent traders.
To keep things simple, Coinbase has limited trading choices, although it is growing. Coinbase Pro customers have been able to trade with leverage on USD quoted books since February 2020.
eToro vs Coinbase: Cryptos Available
The 120+ supported coins on Coinbase represent the exchange’s recent efforts to broaden its cryptocurrency choices. With a few outliers, such as Binance Coin (BNB) and VeChain, it covers almost all of the coins in the top 30 by market capitalization (VET).
Nearly 27+ cryptocurrencies are listed on eToro. Top leading coins such as Bitcoin, Ethereum, Binance Coin, and Cardano (ADA) are all available, but newcomers such as Solana (SOL), Terra (LUNA), and Polkadot (DOT) are not. If you wish to trade newly popular coins on eToro, you can have some difficulty.
If you want to trade a wide range of products, eToro is the clear winner. Coinbase wants to focus on cryptocurrency and fiat currency exchanges. Therefore, it does not even try to touch stocks, commodities, and exchange-traded funds (ETFs) that eToro offers in a portfolio.
eToro vs Coinbase: Wallets
Some crypto investors prefer to move funds to a wallet they control instead of leaving their assets on a trading platform. Both Coinbase and eToro offer standalone wallets, although they operate differently.
The following are the primary differences:
- Anyone, including non-Coinbase customers, can open a Coinbase wallet. Only eToro customers have access to the eToro wallet.
- Users can move money between their wallets and the exchange on Coinbase, but there are some limitations. You cannot put coins back on the exchange once they’ve been moved to the wallet on eToro.
- Moving cryptocurrency from one Coinbase wallet to another is free of charge. A 0.5% fee is charged by eToro.
- Only Bitcoin, Bitcoin Cash (BCH), Ethereum, Ripple (XRP), Litecoin (LTC), and Stellar Lumens are supported by eToro’s wallet (XLM). Any ERC-20 token (based on the Ethereum network) is supported by the Coinbase Wallet and Bitcoin, Litecoin, Bitcoin Cash, Stellar Lumens, Ripple, and Dogecoin (DOGE).
eToro vs Coinbase: Security
When it comes to choosing a cryptocurrency exchange, security is crucial. You want to know that the individuals you entrust with your money actively safeguard your assets.
If your bank or stockbroker collapses in the United States, you’ll most likely be covered by FDIC or SIPC insurance. While eToro and Coinbase claim that money deposited in US dollars is insured by the Federal Deposit Insurance Corporation (FDIC), this does not apply to cryptocurrencies.
Therefore, it’s a good idea to see if the exchange has third-party insurance. eToro offers additional insurance; however, only for cash, all CFD positions, and securities but not crypto assets.
If the exchange went bankrupt, the only security crypto investors would have is that their funds are kept in a segregated account. It also implies that there is no protection against crimes like hacking.
Coinbase has criminal insurance in place to protect cryptocurrency assets from theft and hacking. It goes into great depth about the logic behind its $255 million hot wallet insurance
coverage in a blog post from 2019 — although this amount may have changed since then.
Both exchanges keep most of their assets in cold storage, making them more challenging to hack. They utilize multi-factor authentication at the user level and participate in bug bounty programs to encourage ethical hackers to find any system problems.
eToro, on the other hand, should be more forthcoming about its security. It says it is concerned about the situation but can’t say much more due to security concerns. Coinbase, on the other hand, describes how it divides sensitive data and stores it in various locations. It also includes information security, such as security checks performed on employees.
When it comes to eToro vs. Coinbase, both are reliable cryptocurrency exchanges. They do, however, shine in different ways and will appeal to various sorts of investors.
Both offer other platforms with more advanced functionality (Coinbase Pro and eToroX). They also enable users to stake a limited number of coins. Staking refers to tying up coins for a specified period to collect rewards.
eToro is most likely better suited to more active traders who will benefit from the lower fees. It also has unique social trading features such as copy trading, which allows clients to replicate the trades of top-performing traders.
It offers a demo account that allows users to try out trading tactics without risking money. Furthermore, non-US consumers can trade stocks on the platform that compensates for the limited amount of cryptocurrencies available.
Even though its costs are slightly higher, Coinbase is an excellent option for first-time bitcoin traders. It includes superb instructional resources and a highly user-friendly interface.
In the United States, it will also provide a Coinbase Visa debit card that pays cryptocurrency incentives. It supports a more significant number of cryptocurrencies, and the exchange’s interaction with the wallet is more customizable.
If neither of them appeals to you, look at our list of the best cryptocurrency apps and exchanges for more ideas. Also, don’t be scared to sign up for multiple cryptocurrency exchanges.
Testing them out is sometimes the best way to determine which one is right for you. Just be sure you understand the expenses involved before sending your hard-earned money.
Disclosure: The author is not a licensed or registered investment adviser or broker/dealer. They are not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money.
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At the time of writing, neither Tim Thomas nor Timothy Thomas Limited hold positions in the cryptocurrencies mentioned.
This post was produced and syndicated by Tim Thomas / Timothy Thomas Limited.
Featured image credit: Unsplash.