If you’re looking to trade digital currencies from the UK, or USA, chances are that you’ll settle for Coinbase. Over the years, the platform has established itself as the best exchange platform with a high number of users. Additionally, there have been no security issues reported on the platform up to this point.
On the downside, Coinbase charges high fees. In spite of being a reliable cryptocurrency exchange platform, Coinbase charges a fee of 4% on all transactions. It is vital to note that the exchange still attracts many customers due to its market reputation. Apart from the high charges affecting crypto-to-crypto trading, fiat conversions are expensive on Coinbase.
Nonetheless, there are many ways that you can avoid paying these fees by taking advantage of Coinbase Pro. Also, note that Coinbase and Coinbase Pro are owned by the same company with the former not charging any fees for specific transactions. Both have fees that are covered in detail below and then this guide will show how to avoid paying Coinbase fees.
When Buying Digital Currency
The fees charged are added before calculating the total of the order. For instance, if you are planning to purchase Bitcoin worth $100, the fee is $1.49, hence your total for the transaction will be $101.49. This fee will be charged based on your payment method, and you’ll receive Bitcoin worth $100.
Selling Digital Currency
The fees are subtracted from the amount while calculating the total for the transaction. For instance, if you’re planning to sell Bitcoin worth $100, you’ll be charged $1.49, hence the total for that transaction will be $98.51. Bitcoin worth $100 will be removed from your account and $98.51 will be transferred to your preferred method of payment.
A confirmation screen will always pop up to show you the total transaction amount that has been denominated in digital currency and local currency transactions, as well as the transaction fees.
Evidently, these fees are quite high, but Coinbase knows that users prefer the platform thanks to its reputation. The platform charges high fees for both crypto-to-crypto transactions, as well as fiat conversions.
However, you’re in luck! Because there is a method you can dodge these fees. A YouTuber, going by the name, Coin Mastery, found a method which allows you to avoid these fees, and the good news is that it’s very easy!
How To Avoid Paying Coinbase Fees
As stated above, Coinbase and Coinbase Pro are owned by the same company. As such, you can avoid paying the fees by taking advantage of Coinbase Pro’s lack of fees on certain trades.
First, you should understand that Coinbase Pro mainly targets experienced traders. The client base uses Coinbase Pro to exchange digital currencies alongside informative technical analysis with other helpful tools.
The first step is to sign up through the Coinbase website. If you already have an account, log in. With access to your account, you are then required to link your bank account with Coinbase.
Next, create an account with Coinbase Pro. Notably, you’ll have to verify some documents on your new account as part of security measures. Before you start trading, you should first transfer funds from the bank to your Coinbase account. Once the funds reflect, immediately transfer them to your now verified Coinbase Pro account.
Check your funds on the dashboard of your Coinbase Pro account. Move to the left side and place your order. In this case, Coinbase Pro provides the “Market order” option by default at a fee of 0.3%.
To avoid this fee, place a “Limit order”. This option enables you to put in the purchase bid for your order. This maneuver will keep you free from Coinbase fees.
Under Coinbase, “Limit Selling” entails placing orders with some conditions. Before you put this order, explain the amount and price point the order should be executed.
To use Coinbase Pro, you’ll need to verify your account first, which is done before you start trading or even deposit funds. To complete the verification process, you must upload an official document. Customers from the United States are required to upload a state ID or driver’s license. You must also provide Coinbase Pro with your residential address as well as the final four digits of your Social Security number.
Users from the UK must upload a government-issued ID card and answer a few verification questions based on the national identity database.
Users from other countries must upload two identification documents, namely, ID cards, driver’s licenses, and passports.
Difference Between Coinbase and Coinbase Pro
Coinbase evidently provides a user-friendly interface to allow all traders, experienced and newbies, to conduct their transactions without any hassle. On the other hand, Coinbase Pro mainly aims at attracting more experienced traders who want more control over their trades and advanced functionality.
Coinbase Pro is available in fewer regions as it offers more features.
Coinbase interface is very clean and foolproof, allowing users with zero experience of cryptocurrency trading to trade at a set price as easily as they would make a purchase on Amazon. Nonetheless, this simplicity comes at the cost of information and options.
Coinbase Pro user interface is at the other extreme, when you first load the screen you may feel overwhelmed due to the massive amount of information. The account provides access to detailed price charts, depth charts, order books, and more trading options.
While reviewing an order on the account, you can set a price in the middle section. The selected price should be placed in your account, and no charges will be incurred. Additionally, you’ll also be free from commissions. Coinbase will then show you an open order for the set price.
However, your order will not initiate by default.
Even though this may seem like a perfect solution, there are many disadvantages as well. The main downside of using Coinbase Pro to avoid paying fees on your Coinbase is that the process will take longer to complete, and you’ll have to switch between two different accounts, which is quite a hassle.
Cons Of Using Coinbase Pro
Moreover, using Coinbase Pro has some drawbacks as listed below.
Non-professional charts. The main goal of the platform is to provide professionals charts to experienced traders for in-depth analysis. However, the charts on the platform are far from being professional.
Ineffective customer support. The support team has failed many times to provide conclusive answers to customer concerns. Additionally, questions and answers in the FAQ section lack clarity and relevance.
Limited device support. The platform is yet to have a mobile application. Moreover, sometimes the website freezes when many customers are using it at a go.
Growing currencies. The number of digital currencies being added to the platform continues to increase, this may lead to complexities in the blockchain in the future. If you’re looking for a larger number of coins, try Binance.
Despite all these issues, Coinbase is working hard to ensure that all the complaints are handled effectively on the platform.
Additionally, when compared to most exchanges, Coinbase Pro is quite effective and can be used by both newbies and professional traders.