The most popular application to begin investing in cryptocurrency is Coinbase. It’s 11.5 million users and over 38 million wallets have made it the defacto app for someone looking to start investing in crypto. Though it may seem like there’s no other platform available to do so, many other exchanges have emerged having advantages that are preferable to the high fees and limited trading options found on Coinbase.
The purpose of this article is to present these alternatives to Coinbase along with the advantages they provide. The alternatives that will be covered in this article are Gemini, GDAX, Kraken and Bitcoin ATMs.
Alternatives And Their Advantages Over Coinbase
The first alternative to provide an overview is Gemini – more advanced trading at a lower cost. With Gemini you can purchase and trade Bitcoin and Ethereum. It has a more complex interface compared to Coinbase but it is still simple enough for new investors to figure out.
A main difference with Coinbase is the platform’s order book through which you can buy or sell coins. Making strategic decisions you can sometimes get your coins at a better price that the price set on Coinbase. On Gemini you have the advantage to place market and limit orders as well as set maker-or-cancel (MOC) and immediate-or-cancel (IOC) orders.
Lastly, Gemini has the ability to do analytics on the order book chart as you place an order. A good way for new investors to begin studying technical analysis (TA) is learning how to recognize generic patterns in this chart. Gemini’s trading fees are significantly less and range from -0.10% (a rebate with enough volume) to 0.25% compared to Coinbase’s 1.49% to 3.99% fee range.
The second alternative to Coinbase is GDAX – a smooth transition from Coinbase. Owned by the same company as Coinbase, GDAX allows you to buy or sell Bitcoin, Ethereum and Litecoin with fiat currency.
The company that owns both exchanges allows investors to instantaneously transfer their funds to GDAX for free – a great option for investors who have enjoyed Coinbase platform but aren’t pleased with its high deposit and withdrawal fees. The maximum trading fee for freely trading your coins is 0.25%.
The interface of GDAX is much like the one used by Coinbase. An important feature for investors looking to further improve their TA skillset is that on the same page it incorporates important pieces of information (trade history, order book, price chart) alongside the order form.
GDAX enables the user to place market, limit and stop-loss orders as well as trading on margin. That being said, it is recommended to avoid margin trading due to the high-risk nature and volatility of cryptocurrency investments – unless of course you are an experienced investor.
The third alternative is Kraken – expand your altcoin portfolio. In comparison to Coinbase that offers only 3 coins, Kraken enables the users to expand their portfolio with addition of new coins. The platform offers more than 15 coins that you can trade through numerous pairings – a feature that might be overwhelming to new investors.
Multiple tabs contain trade, market and account information. Another difference between Kraken and Coinbase platform is that the price and order book charts are on a separate page from where you place your order. This makes analyzing the data inconvenient at times.
Due to its complexity, the company who owns Kraken has created a trading guide for new investors along with providing a comprehensive support center with a large list of FAQs. Three different interfaces are provided for trading: Simple, Intermediate and Advanced. The Simple tab covers all the needs of a casual investor who is only interested in adding a few different coins to his/her portfolio. Lastly, Kraken is one of the few and most trusted exchanges to purchase altcoins with fiat.
The last alternative that this article will cover is Bitcoin ATMs – the option for the unbanked. As cryptocurrency achieves market adoption, Bitcoin ATMs will continue to become commonplace. Unreliable banking systems and the latest growth of people trying to cut ties with the traditional banking industry are two main reasons that Bitcoin ATMs have been growing in popularity.
The function of Bitcoin ATMs is similar to the typical ATMs with the difference that Bitcoin ATMs only accept cash in exchange for Bitcoin or other altcoins, without the need to use a credit or debit card. The downside is that the user needs to provide a photo ID and take a selfie to make a purchase – a function that could be a deterrent for people concerned about their privacy.
Another downside and probably the biggest drawback is the high fees and rates for each transaction. Usually the market rate is better than the exchange rates and the fees can range from 3-5%. The difference in the purchase compared to the market rate can reach markups that excess 14%.
With the wider adoption of cryptocurrency these fees and poor rates will decrease but not until more ATMs are on the market. Still, they are a good option for people outside the banking system or travelers who have to pay similar fees when exchanging currency outside their country.
Although Coinbase is the most popular application to begin investing in cryptocurrency at the moment, as it is presented by this article there are many alternatives that can better suit your needs.
Gemini is simple, has more advanced platform than Coinbase and has lower fees.
GDAX has low trading fees, displays numerous charts and has a similar platform to Coinbase allowing free fund transfers between each other.
Kraken is the best option for more than the 3 standard coins. Also, it offers optimization for each user.
Bitcoin ATMs are the easiest option to take but at the same time the most expensive one.