Coinbase is one of the largest online cryptocurrency exchanges in the world. The exchange allows users to purchase Bitcoin, Ethereum, Litecoin and Bitcoin Cash directly via their bank account. Until recently, credit card purchases were supported, until many major banks banned credit card transactions involving cryptocurrency. It works in the same way as any online purchase, has a great user interface with interactive charts, and supports 2 factor authentication for enhanced security when logging in.
The problem with Coinbase however, is the fees you must pay when making a purchase. But there is actually a total legitimate way to avoid Coinbase fees altogether. This method will also allow users to buy bitcoin with no fees as well as the other cryptocurrencies offered by Coinbase.
What are the Coinbase Fees?
If you want to purchase any of their 4 supported cryptocurrencies with a credit or debit card for example, Coinbase charge a whopping 3.99%. The charge applies to all standard purchases of any of the aforementioned cryptocurrencies on the Coinbase website including some fees to cash out your crypto on top of that. (Full Fees List)
The good news however, is that you can avoid Coinbase fees altogether. Coinbase has a range of products now one of which is called Coinbase Pro, formerly known as Gdax. Gdax was rebranded to Coinbase Pro recently and although the services and platform is almost identical to Gdax, it appears to be part of a marketing plan to promote the Coinbase brand. Fortunately users are able to use Coinbase Pro to avoid Coinbase fees and purchase bitcoin with no fees.
While Coinbase Pro is a trading platform and therefore is not a straightforward to use as the regular Coinbase site, it is worth spending a bit of time to learn the platform as you can avoid the fess applied by Coinbase.
On a £1000 purchase, you would end up paying £39.9 in fees alone!
So how do you avoid Coinbase fees?
Because Coinbase Pro and Coinbase are owned by the same company, they use the same back end processes to handle transactions and store your crypto. This means that sending between the two is instant and free which.
Coinbase only charge fees on crypto purchases, meaning you can deposit fiat currency for free, allowing you to buy Bitcoin with no fees.
Step 1. Deposit your Coinbase account with whatever fiat currency you use.
Step 2. Send the fiat from Coinbase to Coinbase Pro
Step 3. Buy your desired cryptocurrency on Coinbase Pro using a limit purchase. They charge an albeit much smaller fee for a simple market purchase, but a limit buy is also very easy to do and most importantly, completely free! *
Step 4. Send your crypto back over to Coinbase if desired, again completely free!
Buy Bitcoin with no fees!
*A limit purchase will make you a “MAKER” which has no fees, whereas a market purchase will make you a “TAKER” which comes with a slight fee.
- Maker – A market maker is when you make or add liquidity, therefore you add a buy or sell order to the order book. In other words your order is not settled immediately as it is not at the current market price.
- Taker – A market taker is when you remove or liquidate some of the order book. In other words you will either buy or sell to a trade which is already listed within the order book, therefore your trade is completed immediately.
And there you have it, a simple way to avoid paying potentially thousands in Coinbase fees.
Sign up to Coinbase Pro here
Sign up to Coinbase here
Check out our official video for a demonstration of this: