Coinbase vs Binance: A Cryptocurrency Trader's Complete Guide

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The cryptocurrency industry in 2020 looks nothing like it did in 2017. The industry is more stabilized and solid than it has ever been in the past, bringing with it an increase in tools and resources for everyone. Fortunately for traders, two exchanges, Binance and Coinbase, have been providing customers with great service for years, and are continually improving on their product offerings. Coinbase might still have less name recognition in the United States, but that doesn’t mean there aren’t plenty of alternative exchanges for traders to utilize to their advantage.

Since we are going to compare Coinbase to Binance, it makes more sense to examine Coinbase Pro instead of the basic Coinbase platform, since Pro gives users the robust trading tools and functionality needed to trade at a high level. Doing so will provide a more apt comparison against Binance to see which comes out on top in the important features of a cryptocurrency exchange.

A Brief Look at Coinbase and Binance

Binance is the brainchild of Changpeng Zhao, also known as CZ, one of the most influential figureheads in the cryptocurrency industry. Zhao started Binance after developing high frequency trading software and working in an executive level position at another cryptocurrency exchange, OKCoin. Binance launched in 2017 and quickly became the largest cryptocurrency trading platform in the world. Until February 2020 the company was considered to be based in Malta, but after the small European nation declared that Binance was not within its jurisdiction, the company has declined to declare other headquarters, noting that Bitcoin itself doesn’t have a central headquarters.

One of Binance’s calling cards is its plethora of trading pairs and massive amount of overall liquidity. The exchange currently has over 250 cryptocurrencies on its exchange, and 874 trading pairs. This makes it one of the most comprehensive exchanges on the market for trading almost any digital asset imaginable. However, one thing you won’t find on Binance is the ability to deposit, trade, or withdrawal US dollars. Instead, the exchange utilizes Tether (USDT), a cryptocurrency pegged to the US dollar. While using USDT is a practical way to keep capital in the cryptocurrency market using a stable asset, without being able to trade in USD, Binance users are stuck finding another exchange to onboard or funding their account via a privately owned wallet.

Coinbase was an early entrant into the cryptocurrency industry. Founded by CEO Brian Armstrong in 2012, the company has quickly grown to an industry giant, generating over $2 billion in revenue each year from its 35 million users. All told, the exchange has processed more than $220 billion in transactions since its inception. And because of its backing by big name investors like Andreessen Horowitz, Union Square Ventures, and the New York Stock Exchange, Coinbase has consistently been well-regarded in the industry.

Coinbase shares, under the symbol COIN, were listed on April 14, 2021, on the Nasdaq exchange. Shares opened for trading at $381 before moving above $400 in relatively short order. At the current price, Coinbase is valued at nearly $100 billion, making it the nation's most valuable exchange. This is a watershed moment for the cryptocurrency industry and may persuade other popular crypto exchanges to follow Coinbase's lead and also go public.

Founder and CEO Brian Armstrong believes that Coinbase, along with all cryptocurrency exchanges, need to be heavily scrutinized if the industry is going to succeed. “We need to be held to a higher standard because digital currency is so new and interesting and powerful that it is attractive to a lot of people out there to try to steal it,” he said. This displays the commitment Armstrong and his team have to providing users with a fully secure and state-of-the-art exchange platform.

Coinbase vs Binance: How Do They Stack Up on Security?

Coinbase’s major security concern isn’t a direct on-platform issue. Instead, social media hacking has presented itself as a way to get Coinbase users to send cryptocurrency to nefarious actors. The exchange has done a good job of halting these transactions when they become apparent, but it’s a never-ending game of whack-a-mole with these concerns. As long as Coinbase users don’t get sucked into potential scams on social media, Coinbase is as secure as it gets. The exchange claims 98% of all cryptocurrency is stored offline in cold storage to mitigate any online risk, and the data is encrypted and further distributed so as to create added layers of security.

Through the Binance Academy, Binance users get a comprehensive education on how to combat against security threats. The platform also has enhanced security features like Address Management, which limits the number of wallet addresses that can be used to withdraw funds, and requires email confirmation for new addresses to be added to the withdrawal whitelist. Overall, Binance has displayed a resilience against hackers. The one major misstep by the exchange was when 7,000 Bitcoin (worth about $40 million at the time) was stolen in 2019. The company offered to cover user losses from the incident, showing their commitment to keeping users happy.

Verdict: Coinbase has long been seen as the industry standard for security and has never really had any hacks to speak of. This puts Coinbase at the top of the list for exchange security. Still, Binance provides its users with security that is almost on par with that of Coinbase, but takes a slight hit due to a previous hack to its platform.

Coinbase vs Binance: What Do Their Fees Look Like?

Coinbase trading fees on Coinbase Pro are in a tiered structure that starts at 0.50%, and although its fees also scale downward for higher volume traders, they do so at a slower pace than Binance (which we’ll get to next). Bank transfers also come with their own fee of 1.49%, while ACH deposits can be done free of charge.

Pricing Tier

Taker Fee

Maker Fee

<$10K

0.50%

0.50%

$10 - 50K

0.35%

0.35%

$50 - 100K

0.25%

0.15%

$100K - 1M

0.20%

0.10%

$1- 10M

0.18%

0.08%

$10 -50M

0.15%

0.05%

$50 - 100M

0.10%

0.00%

$100 - 300M

0.07%

0.00%

$300 - 500M

0.06%

0.00%

$500M - 1B

0.05%

0.00%

$1B+

0.04%

0.00%

Source: https://help.coinbase.com/en/pro/trading-and-funding/trading-rules-and-fees/fees



Binance utilizes a fairly standard tiered trading fee structure. Yet, it does provide one of the better fee ranges on the market. At the lowest volume level fees are 0.1% for both makers and takers and can be reduced all the way down to 0.02%/0.04% for makers and takers respectively at the highest trade volume level. Also, Binance gives its users a few different ways to reduce their trading fees. By paying fees in the exchange’s native BNB token, Binance cuts trading fees by 25% (NOTE: this reduction in fee changes fairly often, so be sure to check the exchange website before placing a trade). Additionally, users who refer their friends to the exchange can earn another 20% reduction in fees. If both of these functions are utilized, traders end up paying 0.06% fees at the lowest trading level, well below all other exchanges.

For fiat withdrawals there are no deposit or withdrawal fee if using ACH transfers, and a $15 fee for domestic wire transfers. Cryptocurrency withdrawals come with a fee dependent on the cryptocurrency. For instance, Bitcoin withdrawals will cost 0.005 BTC while Ethereum withdrawals cost 0.013 ETH.



Level

30d Trade Volume (BTC)

&/or

BNB Balance

Maker / Taker

Maker / Taker

BNB

25% off

Maker / Taker

BNB x Referral

25% off x Kickback 20%

VIP 0

< 50 BTC

or

≥ 0 BNB

0.1000% / 0.1000%

0.0750% / 0.0750%

0.0600% /0.0600%

VIP 1

≥ 50 BTC

&

≥ 50 BNB

0.0900% / 0.1000%

0.0675% / 0.0750%

0.0540% /0.0600%

VIP 2

≥ 500 BTC

&

≥ 200 BNB

0.0800% / 0.1000%

0.0600% / 0.0750%

0.0480% /0.0600%

VIP 3

≥ 1500 BTC

&

≥ 500 BNB

0.0700% / 0.1000%

0.0525% / 0.0750%

0.0420% /0.0600%

VIP 4

≥ 4500 BTC

&

≥ 1000 BNB

0.0700% / 0.0900%

0.0525% / 0.0675%

0.0420% /0.0540%

VIP 5

≥ 10000 BTC

&

≥ 2000 BNB

0.0600% / 0.0800%

0.0450% / 0.0600%

0.0360% /0.0480%

VIP 6

≥ 20000 BTC

&

≥ 3500 BNB

0.0500% / 0.0700%

0.0375% / 0.0525%

0.0300% /0.0420%

VIP 7

≥ 40000 BTC

&

≥ 6000 BNB

0.0400% / 0.0600%

0.0300% / 0.0450%

0.0240% /0.0360%

VIP 8

≥ 80000 BTC

&

≥ 9000 BNB

0.0300% / 0.0500%

0.0225% / 0.0375%

0.0180% /0.0300%

VIP 9

≥ 150000 BTC

&

≥ 11000 BNB

0.0200% / 0.0400%

0.0150% / 0.0300%

0.0120% /0.0240%

Source: https://www.binance.com/en/fee/schedule

Verdict: Traders that are willing to pay trading fees in BNB and utilize the referral bonus will be rewarded with Binance. Even without these incentives, Binance’s trading fee structure still comes out on top as compared to Coinbase. If trading fees top your list of importance, Binance is the no-brainer choice.

Coinbase vs. Binance: What Is Liquidity Like on Each Platform?

Coinbase Pro comes in at second place behind Binance in terms of daily trading volume. Because Coinbase users can directly deposit US dollars into the exchange, the BTC/USD and ETH/USD markets make up more trading volume than any other trading pairs. The same is true when it comes to Euro traders as well. Therefore, while there is significant liquidity on Coinbase, it mostly comes from fiat-to-crypto trading, and not from crypto-to-crypto trading like Binance.

Binance, meanwhile, currently has a daily trading volume of about $20 billion, making it the largest exchange in the industry. However, with such a wide array of trading pairs, this liquidity is spread across a wide market, and therefore doesn’t provide as much liquidity for any single market as one might think. Tether (USDT) is actually one of the most widely used tokens on the exchange, likely due to the fact that the exchange doesn’t allow for US dollar deposits and trading.

If we do a direct comparison of BTC-USD on Coinbase vs. BTC-USDT on Binance, we see that the Binance pair has roughly 2-3x the volume. However, both volume numbers are quite high and the markets are extremely liquid.

Verdict: Want fiat-to-crypto trading liquidity? Stick with Coinbase. Looking to maximize crypto-to-crypto liquidity? Head over to Binance. It’s that simple.

Coinbase vs Binance: How Is the User Experience?

Coinbase Pro is an in-depth trading platform for active traders. But this is a separate interface from Coinbase itself, a slightly cumbersome feature of the way the company decided to structure these two distinct platforms. Luckily, Coinbase makes up for it with its Coinbase Pro mobile app, which consistently gets rave reviews from traders who love the ease of use and speed of trading on the app.

Binance is much more comprehensive than your traditional cryptocurrency exchange. There are a lot of different functions of the platform which provide value to users. These features might not be applicable to all traders, but it’s always good to see additional tools that some users might find helpful.

Verdict: Binance is more than a basic cryptocurrency exchange. It provides users an entire spectrum of crypto-related products that make it a one-stop-shop for trading and more. When it comes strictly to trading, the platforms look relatively the same, and there isn’t much to distinguish one over the other. As for mobile, Coinbase gets a slight edge for having a more comprehensive mobile wallet and exchange app in one, while Binance users can download the Binance mobile trading app but are directed to utilize Trust Wallet for mobile cryptocurrency storage.

Coinbase vs Binance: How Do They Perform on Customer Service?

The dedicated customer support team at Coinbase is available from Monday-Friday, 6am-6pm Pacific Time. Anecdotal evidence suggests the team is well-versed in helping assist users in most of their issues. The one continual complaint is the onboarding process, which can take longer than some users would prefer.

Binance doesn’t offer a customer support telephone line, which is unfortunate for those who see this as a necessary piece of customer service. The exchange does claim that its representatives are available 24/7 via email or online messaging, which could prove useful for traders who are up at all hours of the day and/or night.

Verdict: This one comes down to preference. For those that prefer dedicated phone support, go with Coinbase. However, if you prefer to know that you can receive help 24/7, Binance might be a better choice for customer service.

Coinbase vs. Binance: What Else Is There to Consider?

Coinbase has had trouble keeping up with a surge in demand, and has been working to scale its platform to account for demand spikes for the last several years. Recently, as the price of Bitcoin soared, the Coinbase mobile app and online platform went down and users were unable to load the exchange. While the company is certain to continue working towards meeting increases in demand, it's a somewhat worrisome sign that Coinbase was unable to handle the influx of activity on its platform. Binance, meanwhile, announced a major upgrade to its trading engine in June 2020.

While originally United States-based users could utilize the standard Binance.com trading platform, the exchange is phasing out such usage and moving toward nation-based platforms. Binance.us is the new US-based platform that residents can utilize. Although, there are currently certain state level restrictions that limit who can use the new platform, which is constantly changing. Eventually, Binance.com will no longer be available for US traders, who instead will be forced to utilize Binance.us, which is unfortunate seeing as the current US platform has significantly less exchange liquidity than the original exchange.

Some hypothesize that Binance is also acting in nefarious ways by reportedly creating a complex business structure in an attempt to evade United States regulators. However, these claims are unsubstantiated at this time.

The bottom line

Both Binance and Coinbase are two of the most well-regarded cryptocurrency exchanges on the planet. Coinbase’s start in the United States might make it a more well-known name domestically, but Binance is quickly eating into its market share and bringing with it a robust global exchange with tons of trading liquidity and volume.

Currently, Coinbase still might be the exchange of choice for US-residents, as Binance users in the country can’t yet deposit fiat currency on the exchange. However, that doesn’t mean Binance isn’t without its own merits. The exchange has significantly higher trading volume and liquidity than Coinbase — albeit only for crypto-to-crypto trading — making it a great choice for traders looking to have access to a wide variety of trading pairs.

For many traders, utilizing the benefits of both Binance and Coinbase could be of value. In the case of using both exchanges it’s a great idea to have real-time insight and analysis across exchanges to ensure the best possible price trades in real-time. Working with CoveTrader will allow you to trade with precision across multiple exchanges — including Binance, Coinbase, and several others — on an easy-to-use platform. CoveTrader is the go-to tool for cross-platform trading for traders of all levels.



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