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Trading made “simple”: a comparison between Coinbase and Robinhood
Trading made “simple”: a comparison between Coinbase and Robinhood
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Trading made “simple”: a comparison between Coinbase and Robinhood

By Eleonora Spagnolo - 17 Apr 2021

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Robinhood and Coinbase are two trading portals known for their ease of use. However, they have significant differences. In this article, we will look at some of them. 

First, it is worth mentioning that Robinhood is only available in the United States. Trading on Coinbase, on the other hand, is possible almost everywhere in the world, except in legislations where cryptocurrency trading is prohibited. 

And here’s another substantial difference: on Robinhood it is possible to trade stocks and cryptocurrencies, while Coinbase is exclusively a cryptocurrency exchange

Both, however, are very easy to use. 

As far as Robinhood is concerned, all it takes is to open an account and transfer funds. At that point, it is possible to start trading stocks, cryptocurrencies, ETFs and options. Simply choose what to buy (or sell) and head to the trading section. 

Coinbase can be used from both desktop and app. When signing up, customers also have to go through the KYC process which allows the exchange to identify them. Then they can start trading, choosing from around 50 cryptocurrencies available. To pay, it is possible to either make a deposit from a bank account, thus recharging the euro or dollar account, or pay by credit card (be careful: not all banks allow the use of debit cards for cryptocurrency trading). 

The other major difference is that Robinhood does not allow withdrawing cryptocurrencies. In essence, these have to be converted back into dollars. Coinbase, on the other hand, allows withdrawals to a custodial wallet. 

Robinhood’s strong point is its zero fees. Coinbase, on the other hand, charges fees that can be very high. 

Those who wish to continue to explore the similarities and differences between Robinhood and Coinbase can turn to Investopedia.

Why Coinbase and Robinhood are “famous”

Having said all this, one thing must be made clear: Coinbase is also aimed at institutional investors. It is no coincidence that Tesla bought $1.5 billion worth of bitcoin through Coinbase. So did Microstrategy. Robinhood, on the other hand, caters specifically to young people, making investments easy, without the need for a broker. However, it is precisely this ease that has brought Robinhood under fire. In June 2020, a 20-year-old man committed suicide, believing he had lost a lot of money investing with Robinhood. Since then, the company led by Vladimir Tenev and Baiju Bhatt has been increasing its efforts to explain trading and make its users more informed

The other episode that made it a celebrity outside the US was the Gamestop case. The traders on WallStreetBets are mostly young people who used Robinhood to “pump up” Gamestop’s stock price, triggering an event that shook up finance and especially a couple of hedge funds, which were suddenly at risk of bankruptcy. 

Coinbase, for its part, is enjoying its own particular moment of glory with its recent listing on the Nasdaq. It is the first cryptocurrency exchange to go public. There is also talk of an IPO for Robinhood, but as yet there are no dates. 

Regardless of how easy it is to use and how solid the company is, it is worth remembering that both apps are not games. Trading involves real money and is a risky business. So don’t get excited about an attractive interface, but make informed trades, studying your investments before putting them into practice. 

 

Eleonora Spagnolo
Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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