Last Updated On January 29th, 2019
When deciding on your first cryptocurrency exchange there are several important factors to best keep in mind. Unless you’re already an experienced trader you probably want something that is intuitive and easy to get started on. Coinbase and Gemini are two exchanges that market themselves to crypto newbies as a secure place to get started. The big question is, which one is better? Use this guide to find out who wins in our comparison of Gemini vs Coinbase.
Gemini vs Coinbase Overview
Coinbase has been around since 2012 and was founded by Brian Armstrong and Fred Ehrsam. It’s a California based cryptocurrency broker and was the first cryptocurrency exchange to reach a market valuation at a price of over $1 billion. It works entirely as a brokerage type exchange. There is no user to user trading of cryptocurrency whatsoever, with every transaction being processed by Coinbase itself.
Since its creation, it has established itself as the best exchange to get started in cryptocurrency. It works hard to maintain its user-friendly appearance and has always tried to comply with US and international financial regulations. Coinbase is one of the only cryptocurrency exchanges that meet the strict requirements needed to get a US Bitlicense.
Gemini was founded in 2015 by the Winklevoss twins who are famous for suing Facebook. Early proponents of and investors in Bitcoin, the Winklevoss twins founded Coinbase with the goal of legitimizing cryptocurrency exchanges. It was built from the ground up to follow full US regulatory compliance. This includes very strict KYC and AML requirements when compared to most other cryptocurrency exchanges.
A major selling point for this platform is its relationship with a New York state-chartered bank. This means all US dollars held on the exchange are FDIC insured. For a lot of crypto newbies, this is a reassuring feature. Gemini has been growing steadily but is still a relatively small volume exchange.
Account Creation and Verification
Coinbase doesn’t require you to provide ID verification to create an account or use its wallet services. To get started trading though you’ll need to verify. You’ll have to provide a form of government ID, verify your phone number, and upload a selfie to prove your identity.
This process had been taking several weeks during the latter half of 2017 but these bottlenecks have since been cleared up.
Because of Gemini’s high level of regulatory compliance, creating an account can get complicated. You have to provide ID verification and proof of citizenship before you can begin trading. It offers one of the fasted ID verification processes though. Once you provide the necessary information you can expect a rapid response.
You’ll also be required to secure your account during the creation process, something we’ll cover more in depth in the security section.
Funding and Withdrawal Methods
One of the most important considerations when comparing Gemini vs Coinbase is available funding methods. If you don’t already hold cryptocurrency like Bitcoin, it’s important that you have the option to buy with a fiat currency using a credit card, debit card or bank account. Let’s see how these two exchanges compare.
Coinbase allows fiat transactions using a wide variety of payment options. Currently, you can use your credit card, debit card or a bank account to fund your Coinbase account. You can either buy cryptocurrency directly or transfer money through depositing in your account for trading.
The only downside to its support of fiat currency is that there is currently no method to offer a crypto to crypto exchange. You have to first sell one currency like Bitcoin then use the proceeds to buy another like Litecoin.
Gemini accepts fiat funding through ACH bank transfer or wire transfer. At this time, it doesn’t accept any debit card or credit card transactions. It also has some pretty strict deposit and withdrawal limits in place. Individuals can deposit up to $500 per day while institutional investors are allowed up to $15,000. Withdrawals are similarly capped at $10,000 and $100,000 respectively.
Trading fees can significantly affect your overall return on an investment. Any good trader will look for the lowest possible trading fees while still getting the best services they need. Check out what Gemini and Coinbase can offer when it comes to their fee structures.
Coinbase charges a range of fees that go from a price of 1.49% to 3.99% based on your location, transaction type, and amount. For US users there is a 4% fee across the board.
Gemini offers a fee schedule based on monthly trading volume. The price starts at 1% for those trading less than $20,000 per month and drops as low as 0% for maker orders placed by users trading more than $15,000,000 per month. It only gets more complicated from there, with different discount offers for a range of trading activities. Suffice it to say that overall Gemini has lower fees than Coinbase.
Neither Coinbase or Gemini are designed with altcoin traders in mind. Both exchanges carry a select number of carefully chosen cryptocurrencies like Bitcoin. Let’s see how they compare.
Coinbase currently supports seven cryptocurrencies. These are:
- Bitcoin Cash
- Ethereum Classic
- USD Coin
These represent some of the highest value cryptocurrencies in existence today and are a good starting point for new traders.
Gemini is even more selective than Coinbase. It currently only supports:
- Gemini Dollar
Gemini stands out from Coinbase slightly because it offers its own stablecoin, the Gemini Dollar. This allows users to transfer funds quickly, securely, and without the volatility which the crypto market is famous for.
Account and Fund Security
At their core, cryptocurrency exchanges are financial services providers. As such you should expect and demand that they have excellent, well thought out security procedures in place to protect your investment. Find out how well Coinbase and Gemini do on security below.
Coinbase has an excellent reputation for security. It keeps 98% of user funds in offline cold storage. All actively traded funds are kept separate from brokerage funds to prevent any mishaps. Coinbase uses AES-256 bit encryption for all communication and requires two-factor authentication on all user accounts.
There are currently no known hacks related to Coinbase.
Gemini shares Coinbase’s dedication to security and user protection. Because of its banking connections, Gemini’s security and data privacy is governed by the Banking Secrets Act. The vast majority of user funds are kept in offline, air-gapped storage. These funds are stored in geographically separated areas and have strict access control protocols in place. All ‘hot wallet’ funds are kept on a system hosted in Amazon Web Services (AWS) and benefit from Amazon’s resources and commitment to security.
Gemini also requires the use of two-factor authentication and uses banking-grade encryption for data at rest and in motion.
It’s no secret that the cryptocurrency world doesn’t have the best reputation for customer service. The bar is set pretty low on this one, but both Gemini and Coinbase are trying.
Coinbase is trying hard to improve its customer support. At the moment though, it’s not the greatest. Coinbase has a full library of articles and FAQ’s but doesn’t currently have a live chat feature. It’s possible to contact them via email or phone but reports have stated that response times are slow.
Gemini does a pretty good job on customer support overall. It has a dedicated customer service line, a monitored email address, and a comprehensive library of articles. Response times to emails are reported to be extremely rapid, with most users reporting a useful response within a matter of hours. In the crypto world, this level of customer support can only be described as excellent.
Interface & Features
Both Coinbase and Gemini have been built by experienced teams with large resources. You can definitely tell that they didn’t skimp on developer fees. Both exchanges have excellent interfaces but they definitely have a different range of features. Let’s see how Gemini and Coinbase do here.
You can tell immediately that Coinbase wasn’t set up to be a true trading platform. As a cryptocurrency broker, Coinbase doesn’t allow any complex trade types, margin trading, or other sophisticated moves. The information presented includes price history and current buy/sell price. If you’re looking for candlestick graphs or sophisticated analysis tools, Coinbase isn’t for you.
Gemini only allows basic trades of select cryptocurrencies. Because of this, it lacks many of the features other exchanges boast. It offers multiple order types including market orders and limits but doesn’t support any margin trading or the ability to short cryptocurrencies.
An interesting feature is the daily Gemini Auction. It allows users to buy crypto with an instant settlement and better overall price discovery than what is usually available.
Let’s face it, we use our phones for everything these days. Research shows that with internet users, more than half are on smartphones rather than desktops. If an exchange doesn’t have an effective and elegant app that provides a full range of services, it’s missing out.
Coinbase has both IOS and Android apps available. They provide full trading functionality and work just as well as the full desktop version of Coinbase.
At this time Gemini doesn’t offer a mobile app. It states that its website is mobile and tablet friendly but that doesn’t really make up for the lack of an app.
Our Overall Pick
Comparing Gemini vs Coinbase, both market themselves as ultra-secure and easy to use cryptocurrency exchanges. They both boast impressive regulatory compliance and are built around the idea of making cryptocurrency more widely accessible. Despite these similarities, it quickly becomes apparent which exchange is more successful at this.
Gemini has lower fees than Coinbase but doesn’t allow the same range of payment options. Coinbase offers easy funding by credit card, debit card or a bank account. Coinbase provides access to several major cryptocurrencies like Bitcoin and Litecoin with minimum hassle. It’s extremely easy to use, it lets you create and verify an account rapidly, and has an intuitive interface. It also has significantly more volume and daily liquidity than Gemini does.
Gemini is trying to be a cryptocurrency trading platform that still appeals to the beginner or institutional investor. Coinbase wants to be the best exchange for cryptocurrency and is doing a pretty good job of it. For newbies who want to buy their first Bitcoin, our recommendation is definitely Coinbase.
For a more in-depth look at these two exchanges, check out our full Gemini review and Coinbase review.