Coinbase VS Bitstamp: Cryptocurrency Exchange Comparison
Are you interested in trading cryptocurrencies on the market? Have you heard about the digital platforms that orchestrate this process? These mostly centralized networks offer high liquidity, a choice of supported currencies and payment methods, various trading options, and a satisfying level of protection. You can even store your funds on their digital wallets, although this is usually discouraged unless you have your own private key.
To choose one that suits your crypto trading venture, you’ll need to know of the crucial differences between them. Do they support a fair number of currencies, and if yes, do they offer fiat-to-crypto exchanges of coins as well? What were the users’ experiences in terms of customer support, trading fees, and website functionality? Are they satisfied with the platform security measures?
Today, we’ll talk about two of the oldest operating crypto exchanges – Coinbase and Bitstamp, and see how well they’ve been doing throughout the years. By the time you’re done reading, you’ll know all about their peak times and slump periods, and what are their future plans.
So, let’s find out which of these platforms provides the best experience for traders and investors alike.
About the Crypto Exchanges
Coinbase has been one of the leading crypto exchanges since 2012. It was founded by Brian Armstrong and Fred Ehrsam, two software engineers enthusiastic about the developing crypto market. The corporate headquarters are located in San Francisco, California.
The figures on the official website state that this trading platform has had more than 30 million traders who have traded more than $150 billion in cryptocurrencies. This comes as no surprise if you consider the fact that Coinbase is available in over 100 countries around the world. Encouraged by the company’s favorable prospects, some renowned venture capital firms like Andreessen Horowitz, Union Square Ventures (USV), and Ribbit Capital invested a lot of money in the platform as early as 2013.
In 2016, Coinbase created a separate platform called GDAX (now Coinbase Pro) for more advanced users.
In 2011, Nejc Kodrich and Damian Merlak founded a platform for crypto trading in their native Slovenia. Due to a lack of legal services and crypto market regulations in the country, they had to move the headquarters to the UK in 2013. Three years later, they moved to Luxembourg where the Luxembourgish government finally issued a license to Bitstamp.
According to the EU “passporting” rules, if a financial institution was legally authorized by one of its member countries, its services are automatically permitted in the rest of the 27 EU countries. Hence, Bitstamp became the first nationally regulated crypto exchange in the industry.
Coinbase vs Bitstamp: The Comparison
Bitcoin, Ethereum and Other Cryptocurrencies
Coinbase supports the following cryptocurrencies: Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC). You can buy them, sell them, store, convert or transfer them to someone else. Depending on the country you’re trading from, you get different trading pairs of crypto with fiat currencies. The platform has also launched “Coinbase Earn”, a new feature that allows customers to earn money while learning about how certain lesser-known cryptocurrencies work. In return, you’ll get a bit of those crypto into your Coinbase wallet to try them out for yourself.
Bitstamp, similarly, supports only five cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple (XRP). It allows you to trade them against BTC, EUR, and US Dollars.
Neither of the two platforms supports a large number of digital assets but you get to enjoy safe trading with all primary coins, as well as the option to purchase your first coins with EUR or USD. Coinbase supports GBP too.
Coinbase and Bitstamp are one of the longest-running exchanges in an industry constantly plagued by hacks and scams. Throughout the years, they have cold-headedly faced these challenges, and have tried to stay ahead of the curve when it comes to the newest security measures and avoid serious security breaches (e.g. the Mt. Gox hacking attack).
Both platforms include the common precaution steps like the two-factor authentication process which asks for two different authentication factors, such as your email and mobile device, to verify each transaction. It is the companies’ storing policy to segregate the customer funds from the operational funds to avoid any misunderstandings or money violations from staff members. It was actually Bitstamp that first began utilizing the “air-gapped” cold storage for storing 80-90% of all customer currencies offline. This makes the funds physically isolated from unsecured networks. The remaining funds are kept in online hot wallets for easy access.
Coinbase offers insurance on its US customers’ wallet by the FDIC (Federal Deposit Insurance Corporation), up to a maximum of $250,000. The platform has overtly stated that it takes no responsibility if your account has fallen victim to a phishing attack or has been compromised in any way. However, if you follow their security guidelines you’ll have nothing to worry about. Your wallet and private key are further protected with AES-256 encryption, established by the U.S. National Institute of Standards and Technology.
Bitstamp faced hacker attacks in 2014 and 2015, which is why they take security even more seriously now. During the second breach, some of its virtual wallets were compromised, resulting in more than 19,000 BTC being stolen from users. Bitstamp immediately suspended all transactions and the website was down for a week. Having resolved the issue, the platform has been back since then at full steam.
The high trading fees are the reason behind high-volume traders avoiding Coinbase as their exchange network. The calculation process takes into account the trade amount and the method of payment, with flat fees for transactions under $200, regardless of how you pay for the service.
The fees are as follows:
- $0.99 for a transaction worth up to $10.99 and below
- $1.49 for a transaction worth from $11.00 up to $26.49
- $1.99 for a transaction worth from $26.50 up to $51.99
- $2.99 for a transaction worth from $52.00 up to $78.05
Transactions over $201 are charged at a variable fee of 1.49%, added to the transaction total. The deposit fees for debit cards are on the higher end of the scale, with a variable of 3.99% for transactions starting at $78.06 and moving up. Bank deposits (ACH) come at no charge, while withdrawals cost $0.15.
It’s good to keep in mind that certain countries like Australia, Canada, and Singapore for example, can only use debit cards to complete the payment.
Bitstamp, on the other hand, uses a different fee schedule which is volume-based and looks at your cumulative 30-day volume. The Bitstamp fees when buying or selling start at 0.25% and can get as low as 0.10% if you had a trading volume of over $20 million in the last month.
With Bitstamp, EUR SEPA deposits are free, while withdrawals have a 0.90€ fee. For users trading outside of the EU, the international deposits come with a minimum fee of 7.5 USD/EUR or a 0.05% fee applied. The withdrawals have a higher fee of 0.09%. Bitstamp also allows you to pay with credit cards, but, naturally, the fees that go with this payment method are much higher, around 5%.
If you’re a newbie trader, you’ll love Coinbase! The platform was designed with the intention to be as user-friendly as possible. The layout is seamless and inviting, with calming blue tones and engaging illustrations that make cryptocurrency trading appear less intimidating.
Placing an order is super easy – it literally takes a few minutes! You just open an account and fill in the details, upload some money and voila, your transaction is on its way.
Bitstamp, in comparison, wasn’t primarily made to suit the needs of crypto-beginners. The interface is more advanced, with sophisticated performance charts. Even though the layout itself has a serious feel to it, the website is not burdened with clunky half-functioning walls of data. Beginners can always choose the Simple trading options until they feel ready for some more advanced crypto business such as margin trading.
As is common for the crypto industry, the customer support on these exchanges is lacking on many fronts due to the great number of queries they have to attend to daily. Most of the correspondences go via emails with customers submitting the support tickets on their websites. Users find both exchanges quick and responsive, and their queries answered within a 24-72 hour frame. Both sites feature a “Support” button at the bottom of their website that opens up with an elaborate FAQ section.
The exchanges go the extra mile to make sure the customers are satisfied with their services. Coinbase, for instance, has added a chatbox and telephone services for more urgent queries. Bitstamp is known to hire additional staff when it’s busier and things could easily go out of hand without full team support.
Coinbase and Bitstamp are definitely state of the art and have even developed mobile apps that both iOS and Android users can download. In this way, the companies get traders to communicate and engage with the platforms even more, in an era when apps are the dominant form of digital interaction.
Pros and Cons
- Two-factor authentication plus offline storage
- Encrypted data and segregated funds
- Customer service offers support via email, phone, and chatbox
- User- and mobile-friendly
- Link your bank account to pay via bank transfers and debit cards
- Higher trading fees from 1.49% to 3.99%
- Doesn’t support a lot of cryptocurrencies
- The first nationally licensed exchange
- Has a maximum trading fee of 0.25%
- Offers fiat-to-crypto exchanges and international wire transfers
- Supports credit cards
- Has offline fund storage
- Has a mobile app
- Security issues in the past
- No live chatbox
- Not the best choice for beginners
Who’s going to be then? Coinbase or Bitstamp? It’s always a tough decision to make. Here’s what we think you need to keep in mind.
In our humble opinion, newcomers should go for Coinbase as the more practical choice. You’ll start with the essential trading coins in a safe user-friendly environment. You’ll be quick to learn how to navigate a website that is well-organized and keeps it clean and simple.
Coinbase is perfect if you’re in a hurry. It accepts, sends, and verifies your transaction in record time. The only drawback is that it charges higher fees but you definitely get your money’s worth. New traders are unlikely to have an outstanding volume right away, so this shouldn’t be a problem.
Bitstamp, on the other hand, has lower fees by far, which makes it appealing for high-volume traders. In the past, it has had a couple of security breaches but they were all solved promptly and with utmost transparency. They’ve improved a lot since then and even introduced security measures previously not used by any other exchange. They also offer an additional coin for purchases – Ripple.
Choosing a crypto exchange that suits you makes all the difference to both new and seasoned traders, especially if the latter ones have had some disappointing experience with a former platform. Take a moment to sit down and weigh out the pros and cons.
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Disclaimer: Digital currencies and cryptocurrencies are volatile and can involve a lot of risk. Their prices and performance is very unpredictable and past performance is no guarantee of future performance. Consult a financial advisor or obtain your own advice independent of this site before relying and acting on the information provided.