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Exchange Account Options for Beginners

When it comes to buying and selling Crypto, there are two main options. Coinbase and Gemini, however, we need to keep a clear mind and state the pros and cons.

Today we will discuss their key differences, as well, as their advantages so you can get started into this space.

Coinbase is a user-friendly, straight forward, and, well-established fiat portal exchange that gets your first foot in the door. You can easily connect your bank and/or credit or debit card information to buy the regular staple coins such as Bitcoin, Ethereum, Litecoin and much more to be determined as newer altcoins are on-boarded on their platform.

You can also use Pay pal as a method to purchase the currencies directly without any delay. However, this will come at a partially hefty cost when it comes to fees. Unlike Gemini, when we compare the buy rates, it is made clear that Coinbase charges significantly higher.

Coinbase receipt example

Payment Methods

 Here you can link your Paypal, bank account, or credit card, and you are all set up. You can buy any of the assets listed on their website, usually, transaction time depends on the method of payment, while an ACH transfer may take a couple of days if you use a credit card the transaction will be instant.

ACH transfer typically takes 5-7 business days to get the crypto deposited. The upside in this option of payment is that you are getting a significant reduction in fees.

Another downside to ACH transfers is that you don’t have access to our funds for about a week. The problem with this is that you will be at risk of losing value very quickly if in the event of volatility towards the downside persists and you are stuck at the whims of the market and the exchange due to it being already locked in from your purchase confirmation. This also can run towards volatility towards the upside where you make money on any volatile direction towards the upside.

The key goal, however, is to be able to be liquid as quickly as possible so you can act if in any risk that shows up and not have your crypto stuck in limbo. To each there own but this is the main points to keep in mind when purchasing in those two methods on Coinbase  

Buying Cryptocurrencies with a credit card on Coinbase

  1. Create and verify your account.
  2. Buy Bitcoin, Ethereum, and Litecoin at their set price and receive it instantly.

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Buying Cryptocurrencies via Bank Transfer on Coinbase

  1. Create and verify your account.
  2. Buy Bitcoin, Ethereum, and Litecoin at their set price.
  3. You will receive the agreed-upon amount of cryptocurrency that you purchased after a few days of processing time.

When it comes to Gemini, the Winklevoss twins certainly did a great job in creating a direct competitor against Coinbase giving another option that is cheaper for Crypto traders to enter the space without breaking the bank of constant buying and selling.

One big key difference is that unlike Coinbase, Gemini is a proper exchange and not just a fiat portal.

You can actually as a U.S citizen buy-in but also trade against other users all in one making it more of streamlined experience and less of a hassle of waiting for confirmations. Unlike Coinbase as you are just holding the funds and can’t trade against other users.

Gemini only offers direct ACH or wire transfers as the deposit method for fiat. Meaning you can’t use traditional debit or credit cards to make a purchase nor use PayPal. 

Gemini Registration

Just like Coinbase, all you must do is verify your email with the account along with connecting your selected ACH method banking account to have a direct fiat connection to purchase on the exchange and you are good to go.

Gemini falls somewhere in the middle between traditional exchanges and Coinbase. 

While Gemini is a cryptocurrency exchange, they allow users to immediately trade for cryptocurrency when depositing via bank transfers.  In other words, you can start trading before your deposit is fully processed.  However, you won’t be able to withdraw your cryptocurrency before your deposit is fully processed.

Register on Gemini and earn 10$ usd for free HERE

Buying Cryptocurrencies via Bank Transfer on Gemini

  1. Create and verify your account.
  2. Deposit fiat currency to the exchange, that will be instantly available for trading.
  3. Place an order on the exchange’s market.
  4. When your order has filled, you receive your cryptocurrency.
  5. You can withdraw your cryptocurrency once your bank transfer has been fully processed.
Gemini UI to purchase Bitcoin

Verification on Gemini

When it comes to both Gemini and Coinbase, due to United States AML (Anti-Money Laundering) laws and the need to track and tax individuals. It is required for anyone who signs up to give out personal information and be allowed to trade.

Think of it as similar to opening a brokerage account for trading stock. Regulatory bodies oversee and have both these companies follow the law to be compliant. This in a way helps to garner trust for these two exchanges and legitimizes the operations of both companies.

Purchasing Limitations

Coinbase does not have set limits on the site for new users, but it varies based on how much verified personal documents, purchases or account age relates to the account. Whereas Gemini limits bank transfers up to $500 a day.  Both companies allow large sum wire transfers, however, they require either direct contact to apply for this method.

Fund Safety

Rest assured that both companies segregate customer funds from their own operational funding along with industry-standard procedures of protecting crypto wallets securing the coins offline within cold storage.

Fees

If you are trying to save the most when it comes to fees, Gemini is the best option, Coinbase I will have to personally denounce due to the eye-gouging charges that take place.

Coinbase: typically, will charge 1.5% when it comes to the slower method of bank transferring and locking in your crypto rates. 4% is charged for instant credit or debit card purchasing.
Gemini does not charge deposit or withdrawal fees but rather makes charges when you are trading on the platform at about 0.25% or below. (Recommended)

Who is the winner?

This really depends on how you intend to use the platform, and, what features the user prioritizes. If you are looking to quickly buy a cryptocurrency without too much limitation and do not mind the fees associated with it, then we would recommend Coinbase.

However, if you are looking for significantly lesser fees, but also would like to trade with other retail investors, Gemini will fulfill that need.

However, in my opinion, Gemini would be best fit all around to sustainably not break the bank but also get your foot in the door in the volatile space of crypto. Regardless, as traders, we must look for what is best for us as individuals but also what keeps us liquid enough to maneuver and navigate as best as we can without regulatory limits hindering our assets along with providing all the options needed to take advantage. 

To all CryptoCue traders and beginners, hopefully, this information will help you weigh your options for choosing between these two companies to access the crypto-asset space.

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