Coinbase and Bitstamp are two of the largest and oldest exchanges in the world of cryptocurrency. Each exchange has its advantages and disadvantages.
It is always best to do research before investing funds in any exchange. Total fees can vary from 4-10% depending on what methods you use.
Coinbase is possibly the most well-known exchange in the world. It is run much like a bank with a lot of scrutiny from US regulators.
It is the most secure exchange on the market and cryptocurrency deposits have third party insurance with dollar deposits being FDIC insured. 90% of user funds are stored offline and the funds that are stored online are protected by AES-256 encryption. The site runs entirely on SSL.
Coinbase allows bank transfers, credit cards, debit cards and cryptocurrency deposits and purchasing methods. It also buys and sells Bitcoin (BTC), Bitcoin Cash, Litecoin, and Ethereum.
The company is based in California and has been around since 2011, essentially since the very beginning of cryptocurrencies. Coinbase is an excellent site for those who are just getting started on cryptocurrencies as it has a variety of different payment methods.
It also has a neat and streamlined interface that makes it easy to buy and sell. It is a very smooth and intuitive experience. Coinbase verification is easier than the vast majority of other platforms, where it can take weeks simply to get verified. Coinbase operates a full cryptocurrency exchange called GDAX – a platform that allows users to trade a wide variety of digital assets and serves as a direct exchange of Bitcoin and Ether for fiat currency.
Coinbase also has its own complete cryptocurrency exchange known as the Global Digital Asset Exchange (GDAX). This exchange is really for traders and the graphs and functions can seem quite technical and off-putting for new users.
But it can make it far less expensive if you know what you are doing as trading fees are small. Fees on GDAX are between .1-.3% depending on the volume. You can transfer to Coinbase via SEPA/ACH and transfer the funds to GDAX to avoid paying fees entirely. ACH transfer usually takes between three to five business days.
If you use a credit card on Coinbase you can get your Bitcoins instantly, though this does come with a 3.99% fee. Bank transfers cost 1.49% from the US. ACH transfers from the USA are free and wire transfers cost $10. All you need to do to start buying and selling is to link your bank account to your Coinbase account.
There are no fees when depositing from SEPA to Coinbase. Coinbase is the ideal site for beginners and it extremely safe and legitimate. It is the most trusted exchange in the world and in seven years it has never been hacked due to its strong security measures, though GDAX did experience a flash crash.
Coinbase is also suffering due to an update to the credit card network which resulted in overcharging its customers who paid by credit card. But it is in the process of refunding those affected.
Like Coinbase, Bitstamp is also well regarded and became the first nationally licensed cryptocurrency exchange in the world. Bitstamp is based in Luxembourg and was started in 2012.
Similar to Coinbase, SEPA deposits are free with Bitstamp. Deposits via credit card or wire transfer incur a fee. In contrast with Coinbase, Bitstamp is entirely self-regulated. Bitstamp currently accepts the following cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Ripple.
The UK’s financial conduct authority (FCA) informed the company, at the time incorporated in London, that because cryptocurrency was not a currency that it was not subject to regulation.
Bitstamp is audited by an accounting firm every year to ensure it complies with rules and regulations and it implements KYC and AML procedures. Bitstamp’s verification procedures are a little more stringent than Coinbase, requiring users to submit a front and back picture of government ID along with a bank or utility statement.
In January 2015, Bitstamp suffered a security breach that resulted in a loss of 19,000 BTC. This put quite a dent in its reputation, but the company took the loss and refunded the money to its customers.
Bitstamp has not had any security issues since. What is more unfortunate is that Bitstamp is currently overloaded and it is not possible to join them right now. They have a policy of not onboarding more clients that they have the capacity for so expect huge verification delays going beyond a month.
Some users can get verified within 24 hours and others can wait for a response for over a month. But their site is not often down, and people do get accepted eventually. This can be contrasted with Coinbase which takes on a lot of customers but experiences more site maintenance to keep up.
Bitstamp is adding SegWit compatibility, which is a good sign for those interested in Bitcoin. It makes transactions in Bitcoin far faster. Bitstamp recently started supporting Bitcoin Cash.
Bitstamp fees are ok for European residents as long as they are not paying with credit card. Fees start at 8% for credit card deposits which is far too costly, though for large orders this can be reduced to 5%.
But you can deposit and withdraw via SEPA for free. International wires are low too with only a 0.05% deposit fee and 0.09% withdrawal fee. Direct cryptocurrency deposits and withdrawals are also free.
While the Bitstamp interface may not be as smooth or user-friendly as Coinbase, it is still of a very high quality and is easy to use. But it is not what could be called beginner friendly.
Coinbase v Bitstamp Review Summary
There is not all that much separating Coinbase and Bitstamp. If you live in the US, then Coinbase will be more convenient for USD transfers.
If you live in Europe with a European bank account, then Bitstamp is probably a better option. Just make sure not to purchase via credit card on Bitstamp, and avoid it on Coinbase, even if the fee is halved. Both exchanges are highly secure but Coinbase offers the ultimate in terms of cryptocurrency security.
All in all, it has to be said that Coinbase is a little more secure and a little cheaper, but ultimately it depends on what bank account and the currency to determine the fees. Bitstamp does have the added advantage of trading Ripple, which is difficult to get a hold of and Bitstamp is also supported worldwide, while Coinbase only supports 33 countries right now.