There are so many cryptocurrency exchanges to choose from in the crypto space at the moment. Each exchange offers a different list of functionalities. When trying to choose the right exchange for you, it really all depends on what you’re looking for in your trading experience. Whether you’re a beginner, or a veteran trader, you will be able to find an exchange that works for you. In this article, we will compare two of the biggest crypto exchanges in the market: KuCoin and Coinbase.
Disclaimer: We want to emphasize that this is not financial advice. Cryptocurrencies operate in a volatile market, where values can drastically fluctuate in a blink of an eye. It is imperative to conduct thorough research and seek guidance from a qualified financial advisor before investing.
What is a Crypto Exchange?
Before we take a look at how KuCoin and Coinase compare with each other, it is crucial to understand what a crypto exchange is.
A crypto exchange is a platform for buying and selling cryptocurrencies. In addition to trading services, crypto exchanges also offer price discovery through trading activity, as well as storage for crypto. Before crypto exchanges, people were only able to acquire crypto through mining or by organizing transactions in various online and offline forums. Today, there are hundreds of crypto exchanges offering an array of digital assets and varying levels of security and associated fees. It’s up to you to find the exchange and digital assets that suit your particular needs, price range, and security expectations.
Crypto exchanges play a vital role in the crypto ecosystem by providing crypto users an onramp into, and offramp out of, the crypto space.
Background and History
Launched back in 2017, KuCoin is a global crypto exchange that provides a number of trading options to its six million users. These include spot, margin, futures, and P2P trading, along with lending, and staking. KuCoin claims to offer the most advanced level of security and a selection of nearly 400 cryptocurrencies. Despite its variety of features, it is a beginner-friendly exchange, with a sleek and easy-to-use interface.
Coinbase is a cryptocurrency trading and investing platform that offers users the ability to buy, sell, and exchange over 100 tradable cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin. Coinbase is a large company with over 89 million users and $278 billion in assets on the platform.
Beginners will likely prefer the original Coinbase platform for simple buy and sell orders. More advanced users can access additional features and order types through Coinbase Pro, available to any Coinbase user.
When you buy cryptocurrency there are three main types of fees you should be aware of, and they are deposit fees, trading fees, and withdrawal fees.
Every platform has a different fee structure, so before you set up an account, think about how you plan to deposit money, how often you want to trade, and how you will make withdrawals. For example, if you want to keep your assets in an external wallet, check out the costs involved in doing this.
Coinbase actually has two platforms, one that's designed for beginners and Coinbase Pro, which is aimed at more experienced traders. Trading fees are much lower on Coinbase Pro, so if you plan on trading semi-regularly, it's a good idea to learn how it works.
It is free to deposit cryptocurrency on KuCoin and this does not require KYC approval. However, the only way for U.S. users to buy crypto on the platform with fiat money is via third-party transfers such as simplex or banxa. KYC-verified customers from other countries may be able to deposit money via bank transfer, depending on where they live.
Once you've got crypto assets on the platform, the trading fees are lower than a lot of exchanges, including Coinbase. KuCoin uses a maker-taker system and discounts fees if you pay with and hold its native token, KCS. Level 0 (the entry pricing tier) charges a maker-taker fee of 0.1%. Fees are also slightly higher for less common cryptocurrencies.
Coinbase makes it extremely easy to convert dollars into Bitcoin or any other popular crypto. However, it isn't so easy to understand how much you're paying in fees. Coinbase charges depend on your payment method and the transaction amount.
For example, to buy $500 of Bitcoin by debit card, you'd either pay a 3.99% processing fee or a $2.99 set fee - whichever was higher. In this case, the $19.95 processing fee.
You'll also pay an unspecified spread that should be around 0.5% of each transaction, which is built into the rate quote you see before you buy.
Fees on Coinbase Pro are not only lower than on the main platform, but they are also more transparent. For starters, you can deposit money via bank transfer for free.
To trade, you'll pay a maker-taker fee which decreases for higher monthly trading volumes. The basic level for people who trade less than $10,000 a month, charges a maker-taker fee of 0.5%. So it would cost just $2.50 to buy the same $500 worth of Bitcoin.
For anyone who wants to buy using fiat money, Coinbase Pro comes out ahead in terms of fees.
One of the main reasons people choose KuCoin is because it has a lot of smaller tokens that are harder to buy on other platforms. At the time of writing, there were over 650 cryptocurrencies on the platform, but it lists new coins almost every day. In comparing KuCoin vs. Coinbase, KuCoin wins the available cryptocurrency section.
Coinbase's policy is to list as many coins as it is legally able to. However, its range of cryptocurrencies is much more limited because the platform is fully licensed in the U.S. It has about 90 tokens available for U.S. customers. These include popular coins such as Bitcoin, Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE), and Solana (SOL). It trades almost all of the top 50 tokens in terms of market capitalization.
Both KuCoin and Coinbase operate custodial wallets for their customers. If you keep your coins in a custodial crypto wallet, the exchange manages the keys to your crypto. This means your assets are at risk in the event of a platform hack, but it also means the platform will help if, for example, you forget your password.
Some people prefer custodial wallets because they don't want to worry about things like safeguarding their passwords. Others want total control of their crypto assets, which is why they move them to an external non-custodial wallet.
If you have an external hardware wallet (one that's not connected to the internet) or a hot wallet, both exchanges will let you move funds into it. But they'll both charge withdrawal fees too.
Coinbase has a separate, standalone Coinbase Wallet that's even available to people who don't have a Coinbase account. It's easy for Coinbase customers to connect to their Coinbase Wallet. KuCoin does not have a separate wallet feature.
Security is important when you're entrusting your money to a cryptocurrency exchange. Look out for things like cold storage (keeping funds offline where they're difficult to hack), third-party insurance, and good user-level security features.
Coinbase keeps 98% of funds in cold storage and has third-party insurance to give extra protection, it also lists various other features on its site, such as background checks on employees and paper backups stored in vaults in various different locations.
KuCoin partners with a crypto asset custody platform called Onchain Custodian to ensure the safekeeping of its assets. Like Coinbase, it also has third-party insurance. This deal helped considerably when KuCoin was hacked in 2020. It recovered a large portion of funds and the insurance covered the rest, so customers did not lose any of their cryptos.
KuCoin vs Coinbase: Verdict
Perhaps one of the most important things to keep in mind when dealing with crypto is the fees that a platform charges for using its services. In this case, Coinbase, even with its beginner-friendly trading experience, is a bit unreliable. The reason is that Coinbase’s fees vary too much depending on what type of transaction you’re making and how big your transaction is. This is a stark contrast to KuCoin where it is free to deposit fiat or crypto to the platform, and relatively cheap to trade on the KuCoin exchange compared to other platforms, including Coinbase.
Apart from better platform fees, KuCoin offers a wider range of cryptocurrencies. This is because Coinbase is restricted as to the cryptos it can offer its users due to it being registered in the United States.
Overall, KuCoin gets our vote. Even though Coinbase may offer a more straightforward trading experience than KuCoin, KuCoin does have a lower and more stable fee structure. The access to a wide array of cryptos really sets KuCoin apart from Coinbase as users can trade everything from one platform. Furthermore, KuCoin also offers other features that Coinbase doesn’t, including automated trading bots, staking, etc.
A crypto exchange is a platform for buying and selling cryptocurrencies, and plays a vital role in the crypto ecosystem by providing crypto users an onramp into, and offramp out of, the crypto space. When comparing Coinbase and KuCoin, KuCoin gets our vote because of its lower fees and more stable fee structure compared to Coinbase. KuCoin also offers more trading pairs than Coinbase.