Coinbase is an online service that allows users to buy, sell, and trade cryptocurrency, including popular options like Bitcoin, Ethereum, and Bitcoin Cash. The service has been gaining popularity as the market for cryptocurrency remains lucrative.
Coinbase can be beneficial for trading crypto, but is it good to use for long-term investing?
Coinbase is a good service to use for long-term investing as long as you have more than a basic understanding of cryptocurrency. At an advanced level, you will be able to use Coinbase’s Pro Account to maximize your investment in the long term with the extra features that the service offers.
This article will first explain what Coinbase is, how it works, the difference between the account types, and why Coinbase Pro is great as a long-term investment. There are also resources you can use to go from beginner trader to a higher level.
Why we like Coinbase:
Coinbase is a secure platform that makes it easy to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more.
Fees: 1.49% per trade
Account minimum: $0
Promotion: Offers $10 free bitcoin to new users
What is Coinbase Used For?
Coinbase is a great service for cryptocurrency beginners. The website has an entire section dedicated to teaching beginners the basics of cryptocurrency, what the most popular currencies are, and how to buy and sell currencies.
Beginners will also earn some free currency as they complete the educational lessons.
Once you learn about cryptocurrency and Coinbase itself, you will be able to buy your own currency, have your own virtual wallet for any currency you purchase, and monitor prices.
When you buy cryptocurrency on Coinbase, you can use various payment methods depending on your location. Most people can use credit cards, Paypal, or bank accounts.
A great feature of Coinbase is their insurance policy. If their platform is hacked, your currency will be secure, similar to how banks secure your assets. The exception to this is if your account is hacked or someone gets your password.
In this case, you are responsible for any losses, and your currency may be unrecoverable.
Coinbase makes money by charging its users fees on nearly all transactions completed through the site. These fees vary depending on your account type, your purchase method, and what type of transaction you are making.
The platform offers three different types of memberships: a free account, Coinbase Pro, and Coinbase Prime. Coinbase Prime is made for institutions, and the other two are for personal use. The next section will explain the difference between the free account and the Pro account.
Coinbase vs. Coinbase Pro
A standard Coinbase account will accomplish a lot for beginners. However, for long-term, high capital investments, a Coinbase Pro account will have extra features that advanced cryptocurrency traders will benefit from.
Both Coinbase and Coinbase Pro are free to sign up for, but there is a difference between the fees. A Pro account has lower fees, but the people who use Pro will be trading more currency than most beginners on a standard account.
A Pro account also charges a flat fee for withdrawals and deposits, so if you leave your money in your account for a long time, you will not have to worry about these too often.
On a standard account, you will be paying a percentage of your purchases in fees which can add up if you are purchasing a lot of currency.
The standard account has an easy-to-understand platform that will make trading and buying easy for you. Everything is laid out using simple terms and basic features, so you will not be confused.
There is also an app you can use to buy cryptocurrency on your phone anywhere you go.
On the other hand, the Pro account has many more features, which can, unfortunately, mean a much more complicated layout.
You will need to understand cryptocurrency and how the trading and buying process works before you are successful with the Pro layout. There is also no app to accompany the Pro account, so you will need a computer to access your account.
Why Is Coinbase Pro Good for Long-Term Investing?
If you are considering using Coinbase for long-term investing, Coinbase Pro will be your best option given its extensive features.
A great feature of the Pro account is that you will trade a few more types of cryptocurrencies than a standard account. Having more options will let you trade between more currencies and have a more diversified cryptocurrency portfolio.
So, even if your value in one cryptocurrency decreases, you can have others that will increase to minimize any losses.
Finally, the low fees will be a great benefit over the long term. The Coinbase fee on every transaction is less with Pro than a standard account, which can add up over time for a long-term investment.
As an advanced trader, you will want to have the ability to trade, buy, and sell as much as you want without having to worry about high fees adding up and taking away from your net gain.
You can still benefit from long-term investing with a free account, but the lack of features and higher fees will be a downside. The fees for converting your purchases can be up to four percent higher with the free version, and as you grow as a trader, you will want the extra features that Pro offers.
It is important to remember that you need to keep your cryptocurrency in a digital wallet, such as TrustWallet or a hardware wallet like Ledger, to keep it safe. Otherwise it will be subject to theft or complete loss if there is a security breach or a system-wide hacking.
If your long-term investment is solely on Coinbase, it will not be completely secure.
Coinbase is a great long-term investment, but only if you are an advanced crypto investor. If you are new to cryptocurrency, you should spend time learning and practicing smaller currency purchases and trades before committing your money to a long-term investment.
Once you are ready to start trading large sums, a Pro account will give you many benefits that will enhance your investments. The low fees, extra trading options, and the additional currency to trade can give you a strong, profitable long-term investment with Coinbase Pro.
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A secure platform that makes it easy to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more.