Coinbase and Gemini are two of the most popular cryptocurrency exchanges available. Many people who are interested in trading crypto find themselves wondering what their differences are and which would be best for them.
Both exchanges have a very positive reputation and are based in the United States. To take a closer look at the differences between Coinbase and Gemini, keep reading.
Exchange Founding Year
In the cryptocurrency world, Gemini is still relatively new. It was founded by Cameron and Tyler Winklevoss in 2015. By contrast, Coinbase is much older, founded back in June 2012. In fact, Coinbase was one of the very first cryptocurrency exchanges to pop up and among the first platforms to cater to cryptocurrency in general.
Gemini does not offer a summary of data such as how many users it has in an easily accessible spot on its website, unlike Coinbase. We know that since its founding, Coinbase has had over 10 million customers and exchanged more than $50 billion worth of cryptocurrency.
Additionally, Coinbase has received more than $200 million in funding from big-name investors such as Union Square Ventures, Alexis Ohanian (co-founder of Reddit), Y Combinator, Bank of Tokyo, Digital Currency Group and Blockchain Capital.
While many exchanges are based internationally, both Coinbase and Gemini have headquarters in the United States. Coinbase is based out of San Francisco, California, while Gemini is in New York.
Because of their locations, both companies are under the regulation of United States laws, which are known for being somewhat stricter regarding cryptocurrency and related platforms than in some other countries. However, keep in mind that there are no U.S. regulations regarding cryptocurrencies. Instead, each company is regulated and licensed for its financial services.
Both Gemini and Coinbase are exchanges with a strongly positive reputation in the cryptocurrency community. Both companies are fully compliant with regulations and laws where they operate. Since both operate in the United States, these are similar regulations (although they vary somewhat by state).
There is some overlap in terms of security features, as is to be expected. Both exchanges hold customer funds separately from company funds. Additionally, FDIC insurance covers USD funds stored on either exchange.
They also hold the majority of their cryptocurrency funds in secure offline cold storage. Gemini does not offer more specifics on this other than that it stores the “majority” in this way.
However, Coinbase states that 98 percent of the crypto funds are in this secure offline cold storage. It also has full insurance for the remaining 2 percent stored in other wallets. So far, neither of these exchanges has suffered from a major system hack.
In terms of personal account security, both Coinbase and Gemini offer the use of two-factor authentication with SS messages or Authy, but Coinbase adds the option of Google Authenticator.
Additionally, Coinbase requires verification for any new devices trying to log in and access your account. It also has time-delayed withdrawals, along with multiple approvers via its “Coinbase Vault.”
Methods of Payment
Coinbase and Gemini both have support for buying or selling cryptocurrency via wires and bank transfers. As this is the option that most regular traders will be interested in, either exchange will work for the average person who makes multiple trades on a regular basis.
However, those who want additional options will want to look at Coinbase instead of Gemini. While Gemini is limited to only the two options mentioned above, Coinbase has additional choices both for buying and selling.
If you want to buy cryptocurrency, you can do so on Coinbase with your credit or debit card. Additionally, Coinbase has the option of selling cryptocurrency and receiving payment via PayPal.
Both of these options help make Coinbase significantly more beginner friendly since those who are just beginning to trade crypto might feel more comfortable with those payment methods than a wire transfer.
If you are simply interested in fees related to these two exchanges, Gemini offers a strong advantage. There are no fees for deposits or withdrawals in USD or cryptocurrencies.
Trades on the exchange follow the maker-taker fee schedule, with fees always being at 0.25 percent or lower, depending on if you are the maker or taker and your trade volume. Those with high trading volumes can end up with 0 percent fees.
By contrast, Coinbase has a fee of about 1.49 percent for buying or selling cryptocurrency via a bank account and of about 3.99 percent for purchases made using a credit card. While those fees are certainly several times the fees from Gemini, the highest fees on Coinbase also come from payment methods not offered by Gemini, so you pay for the convenience of using a credit card.
Additionally, you should be aware that signing up for Coinbase automatically gives you access to its GDAX exchange. It has fees that are closer to Gemini’s but slightly different features.
Overall User Experience
The user experience for both Gemini and Coinbase is positive, with intuitive use that most people should be able to figure out. The feeling when using the two websites is very different. Gemini has a very professional feel with its black-and-white backgrounds, clean lines, and greater use of jargon.
By contrast, Coinbase feels more user friendly for beginners with a font and overall design that are less serious yet still professional. While Gemini sticks to black and white, Coinbase throws in blue and occasional other colors to keep things light and interesting.
Based on the design elements, Coinbase has a wide range of target audiences, from beginners to experienced traders. Gemini, on the other hand, targets institutional investors as well as more serious traders.
In fact, at the bottom of its homepage, Gemini even has two options for registration: personal accounts and institutional registration. By contrast, Coinbase has just a single registration section.
For those who will only be using a cryptocurrency exchange on their desktop computer, either Coinbase or Gemini will do well. However, if you prefer having the option to manage your funds and make buy or sell orders on the go, only Coinbase has a mobile application. While you could access either website via your mobile device, these are not necessarily optimized for mobile use.
By offering a mobile application, Coinbase is able to appeal to those who want the option of managing their assets on the exchange just like they would in any other account, on the go from wherever they are. With the Coinbase mobile application you get full functionality, including buying, selling and sending cryptocurrency.
How They Work
The two exchanges operate in slightly different ways. Gemini functions in a way that you might expect from a traditional cryptocurrency exchange.
To use Gemini, you must create an account and then verify it. From there, you must deposit funds into your personal account on Gemini. After the funds clear, you are ready to begin trading.
Coinbase uses a somewhat simpler method that beginners are likely to appreciate to a greater degree. You do not need to deposit funds into an account to buy crypto.
Instead, you just select the cryptocurrency to purchase, the quantity and your payment method. If you buy with a credit card, the purchase is instant. Some users will also get instant purchases through bank accounts, but this feature is being rolled out slowly.
To summarize these differences in use, think of Gemini as a regular cryptocurrency exchange and Coinbase as a retail store where the product you buy is cryptocurrency.
One important buying difference between Gemini and Coinbase is that Coinbase will lock in your rate when you initiate a purchase with a bank account, even though the money takes several days to clear. Coinbase also has the option of instantly purchasing cryptocurrency with a credit card, something Gemini does not offer.
However, Gemini does offer an interesting option you will not find on most other exchanges. When you make a deposit with a bank transfer, you can immediately trade the funds for cryptocurrency instead of waiting for the money to clear.
You do still need to wait for the bank deposit to process completely before withdrawing the crypto, meaning there is still a waiting period before you can use your new crypto.
If you are in search of an exchange that offers dozens and dozens of cryptocurrencies, then neither Coinbase nor Gemini will be the right choice for you. Many of the exchanges with support for an extensive list of currencies only have crypto-to-crypto exchanges, and neither of these will be the way to go.
In fact, Gemini only supports Bitcoin and Ethereum in addition to USD. This means that the ideal user for Gemini will only need to deal with these two major currencies since trading with anything else would require first using Gemini and then a crypto-to-crypto exchange.
While Coinbase does support more cryptocurrencies than Gemini, the choices are still limited. In addition to Bitcoin and Ethereum, you can buy and sell Litecoin or Bitcoin Cash on Coinbase.
This does expand the appeal of Coinbase somewhat, although not to a significant enough degree to make a difference for the average user.
If you require a different cryptocurrency, either use a single different exchange or use Coinbase or Gemini to trade into cryptocurrency, then exchange it on another platform to your crypto of choice.
If you want a clear idea of the limits for users without registering, Coinbase will be somewhat frustrating. It does not outline the limits on its website, instead calculating limits based on the age of your account, whether you have verified your account (and to what extent), and your buying history.
You can see your personal limits via your account verification page. There will be different limits for different payment methods, such as your USD wallet, bank account and credit or debit card.
Most users find that the bank transfer limit is set to as high as $5,000 weekly within a short amount of time, but credit card limits remain very low (at about $60 weekly) at first.
By contrast, Gemini defines its purchasing limits right from the start. The limit is set to $500 daily. If you want to know your limit before signing up, Gemini will be the way to go, but go with Coinbase if you want a limit of more than $500 quickly.
Both websites have larger limits for wire transfers, although you might have to contact the exchange directly to take advantage of these limits.
All cryptocurrency exchanges are experiencing longer than normal wait times in recent months as they struggle to adjust to the increased interest in crypto trading. That said, both Gemini and Coinbase tend to have above-average customer support ratings with relatively prompt support.
Both have FAQ sections with the most common questions and detailed answers that should be enough for the average user.
If you want additional support, both exchanges have the option to contact support via an online form, to which you will receive an emailed response. Coinbase also offers phone support, which some users may prefer to take advantage of.
Using either Coinbase or Gemini will give you access to a trusted cryptocurrency exchange that is based out of the United States and has a strong reputation. Coinbase has a simpler interface that users will appreciate, a few more cryptocurrencies and the ability to buy crypto with credit or debit cards. By contrast, Gemini has much better fees than Coinbase.
With so many advantages to each exchange, the typical user would be happy using either of these platforms for their crypto buying and selling.