eToro vs Coinbase

Posted by: Freddie NorthMay 16, 2021 Updated: May 16, 2021

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This post is also available in: Indonesia Português

On these famous exchanges, investors buy and sell cryptocurrencies online. Members’ funds are stored in secure wallets, and both systems are praised for convenience. However, they have slightly different missions. Here is an overview of the Etoro vs Coinbase offerings in 2021. 

Etoro vs Coinbase

Basic Information

eToro is not a crypto exchange per se. Users do not own real coins as the broker acts as the custodian. The wallet may only be used within the system. Cryptocurrency trading is not the key focus, as there are many other financial instruments like: 

  • currencies,
  • CFDs, 
  • commodities, 
  • indices, 
  • ETFs. 

Coinbase, on the other hand, is focused on the direct exchange of Bitcoin and altcoins like basic attention tokens. These are the only instruments you can buy, sell, and exchange on the platform. The wallet officially belongs to you, so you are free to use it on other exchanges.

Cryptocurrency trading

History and Status of Etoro and Coinbase

Coinbase was founded in 2012. The broker is headquartered in San Francisco and operates in the United States and dozens of other countries. As a registered provider, it complies with US laws. It is also officially recognized as a Money Services Business by the FinCEN. Overall, this exchange is regarded as one of the best and most trusted in the world. 

eToro is much older — it was established in 2007. However, it only added crypto to its offerings in 2018. The geographic coverage is much broader. You can learn more in our eToro review.

At the moment, the broker has operations in 140+ countries. It is widely regarded as a trustworthy intermediary. The company is not registered in the US, but it is licensed by reputable organizations in the EU and Australia. These are: 

  • the FCA, 
  • the CySEC, and 
  • the ASIC. 
Etoro and Coinbase

What Can You Trade?

In terms of range, Coinbase wins hands down. It offers over 50 options, and the collection is ever-growing. eToro with its 15 coins pales in comparison. Beyond Bitcoin, it only focuses on the most common choices, i.e., Ethereum or XRP. With either broker, you do not have to purchase whole coins — fractions are allowed. The smallest trade size is: 

  • $25 on eToro, 
  • $2 on Coinbase. 
InstrumentseToroCoinbase
Forex
CFDs
Stocks
Cryptocurrencies

How Much Do You Need to Deposit?

The size of the minimum deposit on Etoro depends on the country. Traders from Australia and the USA can start with the lowest investment — only $50. Elsewhere, the requirements vary between $200 and $5,000. Residents of countries like Algeria are the unluckiest. Clearly, the company’s policy is quite stringent. 

Coinbase instructs clients to transfer at least $50 to their Prime USD wallets. This is the lowest amount that will let them verify your account. 

What Are the Costs?

eToro works as a market maker — it gains revenue from spreads, not commissions. The costs depend on the type of instrument. The general range is between 0.75% and 5%. 

By default, any operation on this platform is more expensive than on Coinbase. The rival charges a fixed commission of 0.50%. However, extra fees may apply based on the payment method. Both companies have relatively high rates if you compare them to other exchanges. Now, let’s compare the value you get from both providers.

eToro vs. Coinbase: Ease of Use

Overall, Coinbase is more suitable for novices than eToro. Its system does not include any sophisticated margin or trading features. User-friendliness is an important advantage, as beginners may find the eToro platform quite daunting. For them, more intuitive and less complex systems are the best. 

The sign-up process is similar. Users are asked to upload basic documents (a photo ID) for identity verification. eToro also requires proof of your address. The entire registration process is online.

eToro vs. Coinbase

Comparison of Unique Features

Each of the systems is unique. The brokers do not rely on standard software. Instead, they have created special proprietary platforms. Here are the highlights of Etoro vs Coinbase.

eToroCoinbase
Proscopy trading; trading with leverage (margin); access to instruments across marketsdeposits, withdrawals and trading of crypto;a wider range of coins;wallet compatible with other systems;free educational resources
Consno deposits, trades, or exchanges in crypto;wallet only used on eTorohigher fees for credit/debit card transactions

Strengths of eToro

First, this platform is built around communication, with social trading at its core. Users can follow and copy each other’s strategies easily. They can choose high performers and have the trades replicated automatically. Secondly, the broker offers popular derivatives — CFDs. These instruments are linked to cryptocurrencies as underlying assets. Other possibilities are:

  • commodities,
  • stocks,
  • market indices, 
  • ETFs, etc. 

You do not have to own any coins! Traders make a profit indirectly, by speculating on price movements. Outside the US, CFDs may be traded on margin — i.e., with a portion of borrowed capital. This increases risks as well as potential profits, and the broker warns clients that some accounts lose money. 

This shows that the company cares about its reputation and emphasizes the importance of education. Finally, it does not charge any fees for deposits. Clients may use different payment methods: bank wires, debit and credit cards. 

Strengths of Coinbase 

Your Coinbase ERC-20 wallet may be used outside the system. It is accepted by decentralized exchanges and Ethereum-built apps. This is an important advantage over eToro, whose wallet is only usable within the original system. The biggest strengths are the following:

  • You can easily convert one cryptocurrency into another. 
  • The platform allows quick exchange. 
  • Clients also save on fees for direct operations. 

Finally, there is more educational content. The company produces its own tutorials covering most of the supported instruments. These are very good for beginners. Users may also complete a test to get rewards.

Security

Both brokers protect their clients’ funds using the latest technologies. They comply with all applicable regulations. With both Etoro and Coinbase, traders unlock FDIC insurance on dollar deposits worth $250,000. Two-factor authentication is another similarity. Other systems vary.

eToro has biometric access to mobile apps and offline storage (‘cold storage’) for most of its coin. The size of the storage is unknown. Coinbase, on the other hand, specifies it (98%). Its vault does not allow withdrawals until multiple approvals are obtained.

To sum up, both platforms are safe to use. In this regard, Etoro vs Coinbase are comparable. Their clients can be sure their deposits are safe. Compliance with industry regulations is essential for the trading of any assets. 

The Bottom Line

So, what is the conclusion of our Etoro vs Coinbase analysis? If you are looking for a platform to trade currencies, Coinbase is an obvious choice. Not only will you access more coins, but the company’s wallet may be also used freely outside the system. Meanwhile, if cryptocurrency is just an element of a diverse multi-market portfolio, eToro is more suitable. Both companies are licensed and offer sufficient fund protection. As a CFD broker, eToro informs its clients that some accounts lose money and allows them to copy proven strategies. However, its deposit requirements are relatively high, as you can see from this Plus500 review.

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