Coinbase vs Gemini: A Comparison for Cryptocurrency Traders
Coinbase CEO Brian Armstrong and Gemini founders Cameron and Tyler Winklevoss are some of the most forward thinking figures in the cryptocurrency industry. They have led their respective exchanges to prominence by providing US and global users an array of cryptocurrency products within tightly secured confines. As far as exchanges go, Coinbase has many competitors, but Gemini remains one of its fiercest rivals in competing for market share and user growth in this burgeoning industry.
We will look at the components of both Coinbase and Gemini to identify how these exchanges stack up against one another, and which exchange is better in areas like security, liquidity, customer service, and more.
To make this comparison more apt, we will be using Coinbase Pro instead of the traditional Coinbase platform. This is because Coinbase Pro is the platform that is used by active traders, while Coinbase itself is mostly used by those just getting started in cryptocurrencies. You can learn more about the difference between the two here.
Coinbase vs Gemini: A First Look
Coinbase, a San Francisco-based cryptocurrency exchange, was founded in 2012 by CEO Brian Armstrong. The company has firmly established itself as a global entity, serving over 35 million users across 32 countries, generating more than $2 billion in yearly revenue. In fact, Coinbase became so popular that it was the first major cryptocurrency exchange to go public in the United States. On April 14, 2021, Coinbase shares began trading on the Nasdaq exchange with the ticker COIN.
The company offers a variety of different products for individual investors, institutions, and businesses. Its main product offerings for consumers are Coinbase, Coinbase Wallet, and Coinbase Pro, an advanced cryptocurrency trading platform.
Gemini was founded by twin brothers Cameron and Tyler Winklevoss in 2014. The exchange touts itself as being regulated by the New York State Department of Financial Services (NYDFS) and adhering to the strictest financial standards. The exchange currently operates in six countries: Canada, United States, United Kingdom, South Korea, Hong Kong, and Singapore. Gemini is subject to capital reserve requirements, cybersecurity audits, and banking compliance standards. The exchange was voted the 2019 Best Crypto Exchange by Markets Choice.
Coinbase vs Gemini: Can Customers Earn Interest?
The ability to earn interest on crypto is becoming more and more important with each passing day. Both Coinbase and Gemini have taken notice of this growing trend and do have a few options that their customers can take advantage of.
In February, Gemini launched Gemini Earn, a way for customers to generate passive income and earn interest on their crypto assets. Gemini currently offers more than 25 assets that are eligible for interest accrual. As of March 22, 2021, the highest APY is 7.4%, which is paid on Dai and Filecoin (FIL) balances. Interest is paid daily and will begin at 4pm EST on the business day after customers transfer funds to Gemini Earn. Customers will be notified by Gemini when interest payments are distributed and users will be able to monitor their balances in real-time. One important note is that this program is available for customers in all 50 U.S. states.
Unlike Gemini, Coinbase does not offer a traditional interest program. Instead, Coinbase offer staking rewards on a very select group of assets that include Ethereum 2.0 (ETH2), Tezos (XTZ), Cosmos (ATOM), Algorand (ALGO), Dai (DAI), and USD Coin (USDC). While Gemini's interest program works similar to what a bank might offer (passive interest on the net balance), Coinbase's staking option operates a bit differently. Staking lets customers earn income by contributing to the Proof of Stake (PoS) network for a particular asset. Staking on Coinbase is not offered to residents of Hawaii and New York at this time.
Verdict: There is a big difference between an interest earning program and staking. While both options generate passive income for customers, a traditional interest program is the easier and preferred choice for most. Although Gemini has a clear lead at this time, it is likely that Coinbase may follow Gemini's lead and launch a similar program in the future.
Coinbase vs Gemini: How Do They Stack Up on Security?
On a technical level, Coinbase is known as one of the most secure cryptocurrency exchanges around. With 98% of crypto stored in offline, encrypted wallets, theft is greatly mitigated. Other, more standard features are also used by Coinbase, such as two-step verification, SSL encrypted web traffic, and AES-256 encrypted crypto wallets and private keys. Another way Coinbase tries to stay ahead of hackers is with its bug bounty program. The exchange offers rewards of anywhere from $200 to $50,000 for developers who disclose software security vulnerabilities. To date, 484 reports have been resolved, with a total of $441,281 paid out to developers for their work on better securing the platform. Coinbase also regularly updates their users about attempted phishing attacks, which run rampant in the industry.
Gemini claims it not only protects users from external threats, but also against human error. The majority of exchange assets are stored offline in cold storage, and multi-signature technology is used to eliminate single points of failure. Other standard security measures — such as two-factor authentication, password encryption, and address whitelisting — are also used by the exchange. Because of its BitLicense in New York, Gemini undergoes financial and security audits regularly, which should make users feel more at ease when using the platform.
Gemini is one of the few exchanges to provide insurance against theft from hot wallets. As per the company, “Our policy insures against the theft of Digital Assets from our Hot Wallet that results from a security breach or hack, a fraudulent transfer, or employee theft.” This should help put traders at ease. The main concerns for Gemini users are phishing attacks that plague the industry as a whole. In September, 2020, it was revealed that hackers stole $16.8 million in funds from Gemini and two other cryptocurrency exchanges by deceiving users with web domains that mimicked the trading platforms.
Verdict: Gemini takes security extremely seriously. The Winklevoss twins understand that the future of crypto will be built on strong, stable exchanges. Luckily for users, thus far they have lived up to their commitment to security as a priority for Gemini. Coinbase also sees security as high priority, and has many of the same security measures in place as Gemini. Ultimately, these two exchanges have provided US-based users with more peace-of-mind than other exchanges.
Coinbase vs Gemini: What About Custody?
Coinbase has its own custody solution that allows users to securely store cryptocurrency. Coinbase Custody is a crypto asset custody solution for institutions and is a fiduciary under New York State Banking Law. The cost for the service ranges from $0-$10,000 for implementation dependent on the use case, with a 50 bps (0.50%) annualized custody fee. Additionally, there is a $1 million minimum balance for Coinbase Custody users.
Coinbase Custody features include:
- Segregated cold storage
- The industry's leading insurance policy with a $255 million limit
- Seamless integration with Coinbase Pro
- Closing in on 100 digital assets available for storage
- Regular external financial and security audits
Gemini also offers an institutional-grade custody service for which users can securely store their cryptocurrency. Because its custody solution is a part of the company itself, Gemini offers a fully regulated custody solution under New York Banking Law. Currently, Gemini Custody offers storage for over 40 digital assets, and is growing. Custody features multisignature technology on offline, cold storage solutions, for the highest level of security. The cost for using this service is 0.4% annualized based on all digital assets held in a custody account for all accounts under $1 million in assets. Accounts with more than $1 million must contact Gemini for pricing. There is also a $125 withdrawal fee.
Gemini Custody features include:
- No minimum deposit required
- Free setup
- $200 million in insurance coverage
- Same day withdrawals to the Gemini Exchange
- Dedicated account representatives
Verdict: Both Coinbase Custody and Gemini Custody are regulated under NY State Banking Law, and provide offline, cold storage, multisignature security. However, they seem to target different users. Coinbase requires its custody users to maintain a minimum balance of $1 million, and not only charges a higher rate (0.50%), but also an implementation fee. Meanwhile, Gemini touts its custody services for users with less than $1 million in assets, and charges a lower fee to use their service. For users that are going to carry balances above $1 million, check out Coinbase Custody first. Alternatively, Gemini Custody is the solution to use if you plan on maintaining a lower digital asset balance.
Coinbase vs Gemini: How Do They Compare on Fees?
Coinbase Pro trading fees are designed in an industry standard tiered structure and dependent on maker/taker status. These fees start at 0.50% and taper downward for higher volume traders based on monthly trading volume.
$10 - 50K
$50 - 100K
$100K - 1M
$50 - 100M
$100 - 300M
$300 - 500M
$500M - 1B
Trading fees on Gemini are dependent on how a trade is conducted. Traders utilizing the Gemini API feature to place trades will have a different fee structure than mobile and web-based trades. For web and mobile traders, any trade below $200 has a fixed fee, while trades above $200 in value will come with a 1.49% transaction fee, which is a steep cost for trading when compared to other exchanges. Additionally, a 0.50% convenience fee is added to each trade. Instead of displaying this cost separately, the convenience fee is added on top of the purchase/sale price of the trade. This brings the total trading fees to 1.99%. However, Gemini also offers its ActiveTrader, a compatible offering to what Coinbase does with Coinbase Pro. Fees for ActiveTrader start at a 0.35% taker fee and 0.25% maker fee, and taper downward based on trading volume.
30-Day trading volume - USD Notional
Gemini also touts no deposit fees on crypto, no ACH or wire transfer deposit fees for fiat currency, and a 3.49% debit card transfer fee. Cryptocurrency withdrawals are also free as long as customers request fewer than ten per month. More than ten withdrawals per month come with a fee dependent on the cryptocurrency being withdrawn. Fiat withdrawals via ACH or wire transfer are always free.
Verdict: When considering Gemini’s ActiveTrader fees versus Coinbase Pro it’s no contest: Gemini is the clear winner. With taker fees starting at 0.35% you aren’t likely to find a better fee structure anywhere in the industry. This makes Coinbase’s fees actually look quite expensive by comparison. So, if all you care about are trading fees, stick with Gemini and its ActiveTrader platform.
Coinbase vs. Gemini: How About Liquidity?
Coinbase Pro is a great exchange for cryptocurrency liquidity as indicated by trading volumes. Users looking to trade crypto in terms of USD will find that Coinbase cannot be beat. The exchange is top-three in the industry when looking at total trading volume, and is the most-used exchange for many top trading pairs like BTC/USD. Coinbase doesn’t offer the trading variety of other exchanges, and BTC/USD and ETH/USD trading pairs generally account for almost half of all liquidity on the exchange. Crypto-to-crypto trading pairs on the exchange pale in volume compared to fiat trading pairs, making Coinbase less of an option for this type of liquidity.
The trading volume liquidity on Gemini isn’t as high as Coinbase. In terms of total trading volume, Gemini ranks 16th of all major industry exchanges. Yet, this does make sense when you consider that Gemini is only available to users in a select group of countries. While the BTC/USD market does have significant liquidity on the exchange — it accounts for almost half of Gemini’s trading volume — all other trading pairs have less than stellar liquidity. The exchange recently announced it would support crypto trading against the Euro, and is working to incorporate other fiat currencies as well. Currently, Gemini supports 26 cryptocurrencies and 42 trading pairs, both low numbers compared to its competitors. However, Gemini is beginning to support Ethereum-based DeFi tokens at a fairly quick pace, and bringing with it more liquidity as a result.
Verdict: Coinbase offers both more trading pairs and more trading volume than Gemini. When it comes to exchange liquidity, Coinbase clearly has the advantage, and it’s up to Gemini to up its game and provide users with better liquidity options.
Coinbase vs. Gemini: What is the User Experience Like?
Coinbase Pro is actually fairly similar to Gemini ActiveTrader in its use as an advanced trading platform. Advanced order books, trading tools, charting, and more can be accessed on the platform. With its acquisition of Tagomi in 2020, Coinbase began to beef up its user experience for institutional investors. This includes more of a focus on block trading and the previously mentioned Coinbase Custody service for institutions.
The Coinbase mobile app has gotten rave reviews, with a 4.4 out of 5 score from over 200,000 users on the Google Play store.
Similarly, Gemini ActiveTrader provides a professional-level trading experience with advanced charting, multiple order types, auctions, and block trading. At the same time, trades can be conducted in microseconds without compromising on security. As for its mobile app, the Gemini trading app has received mixed reviews from users. The app gets a 3.4 out of 5 on Google Play but a 4.7 out of 5 on the Apple App Store.
Verdict: Overall, these two exchanges have similar user experiences. While some users may find they have a personal preference of one over the other, all in all, both have a track record of providing positive experiences for traders.
Coinbase vs Gemini: How is the Customer Service Experience?
Coinbase gives its customers dedicated phone support from Monday-Friday, 6am-6pm Pacific Time. However, this support line can only be used to disable an account if there is suspected fraud. All other cases will be directed to the Coinbase email request form that can be used to get help with account related issues.
Gemini has its own dedicated customer service phone line and a 24/7 customer support staff available to answer questions via email or chat. Email and chat are more commonly used than phone service, which can take a while to get help. The most widely attributed user issues are with onboarding, making fiat deposits, and withdrawal delays, among others. As per the company’s job postings, Gemini works to hire customer service representatives that are fluent in multiple languages so as to better assist customers.
Verdict: Gemini offers a dedicated phone support line that can be used for any reason, while Coinbase’s phone support is much more limited. Both exchanges have their fair share of user issues and complaints, which is not uncommon for the industry. At the end of the day, both exchanges are about equal when it comes to customer service.
Coinbase vs Gemini: Anything Else Cryptocurrency Traders Should Consider?
Both Gemini and Coinbase have had issues dealing with increased exchange demand as the popularity of cryptocurrencies has peaked. Both exchanges have had temporary outages or delayed withdrawals. You can dive more into the complete incident report for Gemini here and for Coinbase here.
Coinbase CEO Brian Armstrong released a memo during the 2020 US presidential election to ensure his company would remain apolitical during a time of great divide in the country. This move received mixed reviews, and even led some employees to quit.
Gemini recently partnered with a tax compliance firm to provide its customers an easier solution for calculating cryptocurrency tax exposure. This will allow exchange users to directly download a tax report that is correctly formatted for the IRS. The new tool should be available to customers by sometime in early 2021.
Gemini went on a New York City advertising rampage in 2019. Its billboards across the city read, “Crypto Needs Rules”, “Money Has A Future”, and “Crypto Without Chaos”, attempting to paint the picture of an exchange that is prepared to take its customers into the future of cryptocurrency.
Coinbase and Gemini are on par in many different categories. This makes it difficult to separate the two. Coinbase’s trading fees are hard to overlook, and anyone that uses the exchange will have a bite taken out of their profit potential. Yet, the exchange does make up for its high fees with stellar security and trust. Providing insurance against hot wallet theft has been an important development. On the flipside, Coinbase provides better liquidity with cheaper trading fees, making it a preferred choice for active traders. For instance, according to data from CoinMarketCap, the trading volume of BTC/USD on Coinbase is almost ten-times that of Gemini. At the same time, Gemini still does not offer trading for some of the industry’s top cryptocurrencies like DASH, EOS, and ETC.
Those who don’t trade as often and are looking more for an exchange with the best crypto storage options will find Gemini a good option. But for any trader that is remotely active, Coinbase will be the better option.
Still, no matter who you are, there is no reason not to take advantage of both Coinbase and Gemini to optimize your cryptocurrency trading. Additionally, if you decide to work with multiple cryptocurrency exchanges, the platform developed by Cove Markets will allow you to easily manage those accounts in a user-friendly interface so that you can receive real-time market insight and best price execution for your trades. Cove Markets puts the power of cross-platform cryptocurrency trading in your hands.