eToro and Coinbase are both popular cryptocurrency exchanges that will appeal to different types of traders. In this eToro vs. Coinbase comparison, we take a deep dive into everything from security to available cryptocurrencies and wallet options. Read on to find out which platform will work best for you.
eToro vs. Coinbase: Fees
Comparing crypto fees can be difficult because each exchange structures its fees differently. And they aren’t always transparent about how much they charge.
For example, eToro doesn’t charge customers to deposit money, whether by bank transfer, debit or credit card, or another payment method. However, it does charge a higher spread (between 0.75% and 5%, depending on the crypto) than other exchanges.
Other eToro fees could add up quickly. It charges a 0.5% fee (capped at $50) if you want to withdraw your assets to the eToro wallet. There’s also an inactivity fee of $10 a month for those who haven’t logged in for a year or more. Non-U.S. clients will have to pay to convert deposits into U.S. dollars, as well as pay a $5 withdrawal fee.
In contrast, Coinbase does not charge customers to move funds to its wallet, but most deposits do incur fees. It costs at least 1.49% to buy directly from your bank account, though an ACH transfer is free. Debit card crypto purchases cost 3.99%, and users will pay an additional spread of around 0.5%. Coinbase isn’t completely transparent about its spread: it says it calculates cryptocurrency trading fees when you make the transaction.
Buying $200 worth of Bitcoin (BTC) on Coinbase with a debit card would cost $7.98, plus a spread of about 0.5%. The same transaction on eToro would only cost the 0.75% spread.
But eToro’s spread to buy Ethereum (ETH) is 1.90% and Tezos (XTZ) costs 5%, so it could be more expensive to buy Tezos on eToro. You may also find you pay other fees further down the line.
Overall, the fees are probably lower on eToro, depending on the type of crypto trading you want to do, though there’s also a minimum deposit of $50 for U.S. customers. But it is worth thinking about how you plan to use the trading platform and understand what fees will be involved. Otherwise, unexpected charges may eat into your profits.
eToro vs. Coinbase : Cryptos available
Coinbase’s recent efforts to expand its cryptocurrency selection are reflected in the 90 supported cryptocurrencies on the exchange. Its selection includes almost all the coins in the top 30 by market capitalization, with a couple of exceptions like Binance Coin (BNB) and VeChain (VET).
eToro lists almost 30 cryptocurrencies. Top major coins like Bitcoin, Ethereum, Binance Coin, and Cardano (ADA) are there, but recent risers like Solana (SOL), Terra (LUNA), and Polkadot (DOT) are not available. eToro users might struggle if they want to trade newly popular coins.
eToro vs. Coinbase: Wallets
Some crypto investors don’t want to leave their assets on the trading platform and prefer to move funds to a wallet that they control. Both Coinbase and eToro have standalone wallets, but they don’t work in the same ways.
Here are the main differences:
1. Anybody can open a Coinbase wallet, including non-Coinbase customers. The eToro wallet is only available to eToro customers.
2. Coinbase allows users to move money between the wallet and the exchange, though there are some restrictions. eToro only works one way — once you move coins to the wallet, you can’t put them back on the exchange.
3. Coinbase doesn’t charge you to move crypto from one Coinbase wallet to another. eToro charges a 0.5% fee.
4. eToro’s wallet only supports Bitcoin, Bitcoin Cash (BCH), Ethereum, Ripple (XRP), Litecoin (LTC), and Stellar Lumens (XLM). The Coinbase Wallet supports any ERC-20 (built on the Ethereum network) as well as Bitcoin, Bitcoin Cash, Litecoin, Ripple, Stellar Lumens, and Dogecoin (DOGE).
eToro vs. Coinbase: Security
Security is an important consideration when choosing a cryptocurrency exchange. You want to know the people you trust with your investments will actively protect your assets.
In the U.S., if your bank or stock broker fails, you’ll likely be protected by FDIC or SIPC insurance. While both eToro and Coinbase say money held in U.S. dollars is covered by FDIC insurance for U.S. residents, that coverage doesn’t extend to cryptocurrencies.
As such, it’s good to check whether the exchange has its own third-party insurance. Unfortunately, eToro has additional insurance, but only for cash, all CFD positions, and securities — not crypto assets. If the exchange went bankrupt, the only protection crypto investors would have is that funds are kept in a segregated account. That also means there’s no insurance against crime, such as hacking.
Coinbase carries crime insurance to protect cryptocurrency assets against theft, including hacking. In a 2019 blog, it gives a lot of detail about the thinking behind its $255 million hot wallet insurance policy — though the amount may have changed since then.
Both exchanges store the majority of assets in cold storage, so it’s harder to hack. They have multi-factor authentication at a user level and participate in bug bounty programs to encourage ethical hackers to uncover any flaws in the system.
However, it would be nice to see more transparency from eToro about its security. It says it takes the issue seriously but can’t say more for security reasons. In contrast, Coinbase explains how it splits up sensitive data and stores it in different geographical locations. It also gives details on organizational security such as employee security checks.
Conclusion
When you compare eToro vs. Coinbase, they are both solid crypto exchanges. But they shine in different ways and will appeal to different types of investors.
Both have separate platforms (Coinbase Pro and eToroX) with more advanced features. They also allow users to stake a small selection of coins. Staking means you can earn rewards by tying up coins for a set period of time.
eToro is probably better suited to more active traders who might appreciate its lower fees. It also boasts unusual social trading features like copy trading, where clients can mirror the trades of top-performing traders. It has a demo account where people can test out trading strategies without risking any capital. Plus, non-U.S. clients can use the platform to trade stocks, which could make up for the limited number of cryptocurrencies offered.
Coinbase is a great option for first-time cryptocurrency traders, even though its fees are slightly higher. It has excellent educational resources, and its interface is extremely easy to use. It will also offer a Coinbase Visa debit card in the U.S. that pays crypto rewards. It has a wider range of cryptocurrencies, and the way the exchange interacts with the wallet is more flexible.
One additional factor to take into account is that eToro is not available in every U.S. state. Residents of Delaware, Nevada, Minnesota, Tennessee, New York, and Hawaii won’t be able to access eToro. Hawaii is the only state not yet supported by Coinbase.
If neither of them feels right, check out our list of top cryptocurrency apps and exchanges for more recommendations. And don’t be afraid to open accounts with more than one crypto exchange. Sometimes the best way to find out which one is right for you is to test them out. Just make sure you know what fees you’ll have to pay before you transfer your hard-earned cash.