Coinbase is one of the world’s largest cryptocurrency exchanges, and although it’s based in the United States, many Canadians use the platform to buy and sell cryptocurrencies. Besides having such a high trading volume, Coinbase also offers a large database of cryptocurrency assets and has a comprehensive mobile app that makes trading easy. However, their fee structure can be a bit confusing. So I opened an account to test out the platform and see exactly how much it costs to fund your account, trade, and withdraw back to my account.
Another thing to note about Coinbase is that they have two tiers: Coinbase and Coinbase Advanced. Coinbase is the more simplified platform but supports fewer crypto assets and has higher fees. Coinbase Advanced has more trading options but will likely be too complex for beginner traders. I’m not a pro trader, so I decided to try out a simple trade using the basic platform. Here’s my Coinbase review.
How to open an account on Coinbase
Opening an account with Coinbase is pretty straightforward. When I signed up, I was prompted to enter my personal information and confirm my email address. I also needed to link my phone number since Coinbase requires SMS verification. Have your phone in hand, your email app open, and be prepared to provide the following:
Verification is basically guaranteed, as long as you can provide an adequate form of identification. I uploaded an image of my driver’s license. Verification was fast, and the total sign-up process took about 6-7 minutes for me.
Purchase Methods
Anyone in Canada with access to a Canadian online bank account can deposit funds into Coinbase using Interac e-Transfer. Canadian users can deposit using their bank debit card if the card supports “3D Secure” (3DS). You can also fund your Coinbase account by PayPal or by transferring in crypto from an external wallet. At the time of writing, Interac e-Transfers are free and almost instant, so they are the best way to fund your account. Coinbase does not currently support prepaid credit cards or wire transfers which are popular methods common with most of the top crypto exchange platforms in Canada.
Purchase Limits
Depending on the method of payment you choose, there may be a limit on how much you can buy per day, week, or month. In my case, there was no limit on the amount of crypto purchases made via eTransfer. However, my Visa-Debit has a $7,500 per week limit on crypto purchases.
To find your account limits, click on the profile icon on the top left of your dashboard, select Settings, and then select Account Limits.
Setting Up Payment Methods
Before you can start trading, you need to set up your payment methods. To do this, click on the profile icon on the top right of your dashboard. Select Settings, click on Payment Methods, then click on Add a Payment Method. Choose your desired payment method and follow the prompts.
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If you want to want to link a debit-credit or credit card, Coinbase may verify the card by performing two small debit transactions. To verify your card, you’ll have to enter the amounts of the two temporary debits. After that, you’ll be able to use it to buy cryptocurrency – assuming your card issuer allows crypto transactions.
However, some credit cards treat crypto transactions as a cash advance, which means it is subject to interest charges immediately from the time of purchase and not covered by the 21-day interest-free grace period. That’s something to keep in mind before using a credit card to buy cryptocurrency.
To deposit crypto from an external crypto wallet, first make sure that the coin is supported by Coinbase. On the top right of your dashboard, click on Send & Receive, select Receive, then follow the prompts.
Funding Your Account by eTransfer
In Canada, you cannot fund your account with Canadian dollars via credit card, but you can with an eTransfer. So I chose to deposit $50 CAD to my Coinbase account by eTransfer. It prompted me to sign into my bank account to authorize the transaction, which was quick and painless.
While Interac eTransfers are known to take up to 30 minutes to process, the money was deposited into my Coinbase account in less than 60 seconds! I was impressed by the speed. Plus, there are no funding limits on eTransfers, which is another bonus.
Trading Fees on Coinbase
On the downside, Coinbase has higher fees compared to other Canadian cryptocurrency exchanges, especially in its standard version. When you trade on Coinbase, you will be charged two fees:
1. Markup on buys/markdown on sells, roughly 1%
2. Coinbase transaction fee
A markup means you’ll be charged a higher price than the true market price. A markdown means that when you sell, you’ll get a lower price than the true market price. This is normal, but on Coinbase, you will only see it when you review your order before confirming the transaction. At this point, the fees are disclosed and Coinbase claims the markup/markdown is 1%, but I was charged more when I bought BTC.
In my case, I was charged 1.04% more than the live market price on Coinmarketcap plus another $1.49 to buy $20 CAD worth of Bitcoin. When you add the markup and the transaction fee together, it comes out to a total trading fee of about 8.54%. That’s insanely high, especially if you’re a previous Binance user who enjoyed dirt-cheap trading. Coinbase is notorious in my crypto community for being one of the most expensive platforms in Canada, and now I understand why. In order to avoid paying high transaction fees, make orders of more than $200.
Coinbase vs Coinbase One
If you want to get around the Coinbase transaction fees, you can upgrade your account to Coinbase One for $24.99 per month. This will give you access to no-fee trading, although the 1% markup/markdown will likely still apply. You’ll also get access to advanced crypto research and charting tools, higher yields on staking, and 24/7 priority support.
This article is the shortened version of an article originally published on Hardbacon.ca by Heidi Unrau under the title "Coinbase Review for Canadians: What You Need to Know in 2024".
