Coinbase vs eToro 2020 – Fees, Features, Security Compared

On first sight, Coinbase and eToro should not have too much in common and won’t be mentioned in the same sentence too often. One is the leading on-ramp into the world of cryptocurrency and the other is a well-known platform for trading different kinds of financial products and derivatives.

But there lies the common denominator: financial assets of all kind are interesting to eToro. Consequently, digital assets like bitcoin and other cryptocurrencies are also subject of interest to eToro that branched out into this new financial vertical in late 2018 and early 2019. And judging by their announced plans and launched products (eToroX exchange and eToro wallet), they are going to play even bigger role in the nascent blockchain industry.

Coinbase needs little introduction: it is THE place, the most popular crypto exchange, where newcomers go to buy their first crypto and enter the magic world of cryptocurrencies.

So, having said all of this, it is a natural sequence of events to compare these two platforms as their paths have crossed already and I have hunch are gonna meet each other ever more frequently in the future.

eToro vs Coinbase: General info

Coinbase was launched in 2012 in San Francisco, California. As a company operating in the United States, Coinbase is required to comply with U.S. laws and regulations, including state money transmission laws and regulations, the USA Patriot Act, the Bank Secrecy Act, and is registered with FinCEN as a Money Services Business. These laws and regulations force accountability onto Coinbase. This is something that may be lacking from some of their offshore competitors in other countries with less strict regulations. It is widely considered as one of the best crypto exchanges in the market.

Since its launch in 2006, eToro has become a multinational sensation and is now active in over 140 countries.

eToro is a well established financial platform offering a wide range of financial trading services. They have expanded their offering to include crypto currencies with some unique benefits such as fee-less trading and margin trading. It is also one of the rare services where you can buy crypto with PayPal.

One important note: eToro sells you both CFDs or actual coins. With CFDs, it allows you to speculate on their price by giving you IOUs instead of real coin. So in that case, if you want to withdraw bitcoin from eToro, you need to sell it for fiat currency, withdraw that fiat money and go to some other crypto exchange to buy “the real bitcoin”. If you choose to buy actual coins, then same rules of withdrawal apply like with any other exchange.

eToro vs Coinbase: Fees

Coinbase charges around 3.99% for credit/debit card purchases and 1.49% for bank transfer purchases.

Purchase MethodCoinbase Fees
U.S. Bank Account1.49%
($0.15 minimum)
Coinbase Wallet (U.S. Dollars)1.49%
Credit Card or Debit Card3.99%

Although eToro does not charge any fees for opening or closing trades, it does charge a spread that varies depending on the instrument, e.g. 0.75% for Bitcoin (BTC) and up to 3.45% for certain trading pairs, such as ZEC/ZHF.

In addition to this eToro charges a flat $25 payout fee while deposits are free.

Buying Limits

Coinbase does not clearly define limits for new users on their site. Instead, limits can vary depending on your country, account verification, buying history, and account age. To apply for higher limits you will have to verify your identity. Once you do, a fully verified US residents can transaction up to $50,000 per week, while verified customers from EU may have a maximum of $30,000 in their account at any time. You can check their limits through their account.

There are no upper limits how much you can buy but there is a minimum deposit amount you need to put in on eToro. You must have $200 to participate in CopyTrading and make a minimum investment of $5,000 for CopyPortfolios. The minimum quantities for manual positions are based on the instrument. For currencies (such as cryptocurrencies) and commodities, it is just $25 (or $50 if you are from the US). For stocks, it is $50. Finally, for ETFs and indices, it is $200.

Supported Countries

Coinbase serves customers in the following countries:


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Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Finland, Greece, Hungary, Ireland, Italy, Jersey, Latvia, Liechtenstein, Malta, Monaco, Netherlands, Norway, Poland, Portugal, San Marino, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and the United States.

eToro is available in the majority of the globe, with the exemption of Canada, Cuba, Japan, North Korea, Iran, Syria, Turkey, Serbia, Albania, and Sudan.

Supported coins

Currently, coins listed on its non-Pro interface include BitcoinBitcoin Cash, Ethereum, Ethereum Classic, USD Coin, XRP, Stellar, Zcash, 0x, Litecoin, and the Basic Attention Token.

As a multi-asset brokerage, eToro allows users to trade thousands of financial instruments, including over a dozen crypto currencies (all major coins such as Bitcoin, ETH, XRP, IOTA, EOS, XLM, ADA, EOS etc). Based on the concept of social trading, eToro is designed to be suitable for both new and experienced traders.

Deposit and Withdrawal methods

Coinbase offers 3 payment methods: Debit card, bank account, or wire transfer. In this guide we will cover purchasing with a debit card or with a bank account.
As for withdrawal methods – you have one additional way to get your money from Coinbase by using PayPal.

Among crypto currency platforms, eToro stands out as one of the few platforms that offer users the ability to purchase crypto currencies via PayPal in combination with various other payment options. Other deposit and withdrawal options include: wire transfer (Swift and SEPA), Giropay, Skrill, Neteller, Credit Card.

Customer Support

Coinbase customer support is handled through email, and in our personal experiences, we’ve typically received responses from support within 24-72 hours. They also have an extensive FAQ for general questions.

eToro has a thorough help center that provides basic information about trading as well as answers to the most common user problems. In addition, eToro only offers a simple ticket system for the majority of its user complaints and the answers are often slow. Beyond the traditional support lines, eToro also answers customer queries via social media. As a beginner-friendly platform, eToro also offers a variety of training materials and customer support for users, ensuring that help is at hand when it’s needed.


Read our comprehensive guide on best cryptocurrency exchanges.


Trust and reputation

Coinbase enjoys an excellent reputation and trust as a registered and regulated company with well-known VCs as investors, transparent team and immaculate track record (with minor, anecdotal complaints from individual customers).

Coinbase is a Bitcoin company based in San Francisco, which means that is required to comply with US laws and regulations, at both a federal and state level.  Here are some of the regulatory bodies, laws, and regulations that Coinbase complies with:

  • It complies with state money transmission laws and regulations.
  • It complies with the USA Patriot Act.
  • It complies with the Bank Secrecy Act.
  • It is registered with FinCEN as a Money Services Business.

As a regulated platform, eToro is governed by the highest standards of accountability and transparency and is licensed to offer its services to large parts of the world. Currently eToro is regulated by the Cyprus Securities & Exchange Commission (CySEC).

Security

Coinbase segregates customer funds from company operational funds.  These customer funds are held in custodial bank accounts.  This means they will not use funds of yours to operate their business.  They also claim, “Even if Coinbase were to becomes insolvent, the funds held in the custodial bank accounts could not be claimed by Coinbase or its creditors.  The Funds held in those accounts would be returnable to Coinbase’s customers.”

98% of customers’ cryptocurrency funds are stored in secure offline cold storage.  These cryptocurrencies are held on multiple hardware wallets and paper wallets.  The physical cryptocurrency wallets are then stored in vaults and safety deposit boxes around the world.  These measures protect customers’ funds from being lost or stolen by hackers.

The remaining portion of cryptocurrency, that is stored online, is fully insured by a syndicate of Lloyd’s of London.

In terms of cyber-security, EToro platform is extremely safe and never had any issues with hacking attacks or user fund losses. eToro also takes precautions to ensure the funds and personal information of clients are safe. Traditional funds remain secure in European banks of tier 1.

With all that in mind, you should remember that there are no regulations for cryptocurrencies. Because of this, if you engage in cryptocurrency trading or other crypto-related investments, there is no insurance from the investor compensation schemes within the UK or Cyprus. The lack of regulations also means that if you have a complaint, you cannot file it with your financial ombudsman service.

Despite this, eToro takes pride in working to resolve issues as seamlessly as possible. In addition, there are numerous social platforms where you can register complaints, which may influence other users.

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Other features

Coinbase has seen a rapid growth and branched out into different sectors of cryptocurrency world with most of their new services being geared for institutional clients. Those new services are Coinbase Custody, Coinbase Prime, Coinbase Staking.

Additionally, Coinbase has their Coinbase Pro platform designed for day-traders and their own wallet that is also a Web3.0 browser.

eToro is, as we already mentioned, a comprehensive platform for trading financial products of all kinds. Their crypto division has grown to include eToroX exchange and eToro wallet, two separate products to the main platform of eToro.

eToro’s next generation investment product CopyPortfolio is also a feature not found on any other crypto currency platform. CopyPortfolios allows eToro users to easily invest in top trader portfolios so they can copy the trades of the best traders on the website. eToro users who invest in a CopyPortfolio let eToro manage their capital professionally and avoid the guesswork of trading.

In addition, eToro also offers a unique social feature known as CopyTrading which allows users to automatically copy the trades of other successful traders based on specific conditions.

Currently eToro also offers margin trading and lets its users trade crypto currencies with up to 2 times leverage.

eToro vs Coinbase: PROS and CONS

Coinbase Pros

  • Excellent Reputation
  • FDIC Insured
  • Easy to Use
  • Very Secure
  • Accepts Credit / Debit Cards

Coinbase Cons

  • Slow Customer Support
  • Limited Currencies Available

eToro Pros

  • Well-Designed Interface
  • Trustworthy & Secure
  • Variety of Options
  • Large range of Markets

eToro Cons

  • No cryptocurrency deposits
  • Not many cryptocurrencies
  • Don’t hold the assets

eToro vs Coinbase: Conclusion

So who wins the battle between eToro and Coinbase?

  • In terms of fees – eToro is nominally free but they do charge you a spread and earn money that way. Coinbase is charging pretty high fees but not all of those charges go to them but to the third party services you use to fund your Coinbase account (for example Visa and Mastercad). If you plan to trade a lot, eToro is cheaper.
  • In terms of supported currencies – almost a complete tie as both have around 15 coins listed on their main platforms. Coinbase Pro and eToroX will have much more coins listed.
  • In terms of regulatory compliance and licensing: both are legit and well-regulated companies with a slight edge to Coinbase that has multiple layers of regulatory security.
  • In terms of customer support: Both are of similar quality so it is a tie.
  • When it comes to security in the eToro vs Coinbase battle: both are top notch so it is another tie.
  • Trading features: eToro clearly wins this one as it has more advanced charting interface with margin trading, social trading and other copy trading features.
  • Overall reputation: another tie since both enjoy fairly good reputation in crypto community with sporadic complaints by individual customers.

If you are not fond of neither of these exchanges, here is a list of potential alternatives: Cex.io, Binance, Changelly, Bitpanda, Bitfinex, PrimeXBT, PrimeBit, Deribit. Since February 2020, Coinbase Pro has announced they are entering the margin trading arena as well.

In case you want to compare Coinbase with other exchanges, have a look at our guides where we do just that:

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eToro Risk Warning: 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

 

CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

Torsten Hartmann has been an editor in the CaptainAltcoin team since August 2017. He holds a degree in politics and economics. He gained professional experience as a PR for a local political party before moving to journalism. Since 2017, he has pivoted his career towards blockchain technology, with principal interest in applications of blockchain technology in politics, business and society.

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