Coinbase Pro: How to Buy Bitcoin and Ethereum
Coinbase Pro is a cryptocurrency exchange for more advanced crypto investors. It’s based in the United States and has over 35 million users.
Most people who know and use Coinbase Pro are likely to be previous users of their more beginner-friendly platform, Coinbase. That’s how it was for me and my circle of friends who are into cryptocurrency.
While Coinbase (the beginner-friendly one) is great for crypto newbies, it does come with a price.
Depending on the amount of currency being bought, fees on Coinbase would apply flat fees ranging anywhere from $0.99 – $2.99.
Here are the flat fees on their pricing and fees page:
After that, Coinbase has variable fees that are applied only if the flat fee is greater than 1.49% of the purchase. The variable fees rate changes depending on the location of the account holder.
Here are the variable fee rates for accounts based in the USA.
With both of the above fee tiers in mind, we can draw up a couple of examples of why and when they’d be used.
Example #1 – Placing an order of $100 for bitcoin (BTC)
Here’s how the math works out on a $100 order of bitcoin (BTC).
$100 (purchasing amount) – $2.99 (flat fee) = $97.01 USD worth of bitcoin
Now I’ll be honest, that’s not too bad for an investor who purchases say $100 a month.
Maybe this is a new investor seeking to get their feet wet in the cryptocurrency space and they don’t mind paying a little extra for their purchases. After all, Coinbase is the #1 platform for most users and it’s extremely easy to navigate.
But what about investors who want to buy with funds over $200, or $300, or more?
Example #2 – Placing an order of $300 for bitcoin (BTC)
If I bought on Coinbase, they’d get hit with a 4% variable fee (as shown in the image above).
Here is what a $300 order of bitcoin looks like.
$300 (purchasing amount) – 4% (variable rate) = $288 USD worth of bitcoin
The variable rate with this order would come out to be 4% of $300 which is $12.
In my opinion, this is a huge chunk of money taken out of the purchasing order. Multiple buys like this add up over time and really start to become a serious pain to deal with.
Fortunately, Coinbase has a Pro version called Coinbase Pro that is 100% free to use and charges fewer fees!
Coinbase Pro Fees
One of my favorite features of Coinbase Pro is that they have a transparent fee structure.
If you go into their app and click on the profile icon on the bottom right, you’ll bring up a menu that lists helpful account information including a fees page.
They make it readily available on display for anyone who wants to view their fees. No hidden fees!
To view Coinbase Pro fee breakdown is simple. Just click the Fees option and you’ll see a neatly designed table of fee tiers.
Understanding Coinbase Pro Maker and Taker Terms
A maker is an account holder who is making a purchase order available for a taker.
A taker is an account holder who is looking to take or purchase order.
For example, investor Bob wants to set a limit order to sell $100 worth of bitcoin. Bob is making a sale of bitcoin available. Investor Mark places a purchase order of $100. Mark is taking a sale of bitcoin to purchase.
Make sense? Cool.
Now, take a second look at the fee tier above. The fees are significantly less than Coinbase! Pretty neat, right?
How to Buy Bitcoin and/or Ethereum on Coinbase Pro Using USD (US Dollar)
Creating a Coinbase Pro account is essentially the same as making an account on Coinbase. In fact, if you started with Coinbase and open a Coinbase Pro account, you can transfer your cryptocurrency balances instantly. And for free, too.
- Download Coinbase Pro. Coinbase Pro is available for both Android and iOS users (and of course Windows and Mac).
- Verify yourself. It will ask you for personal identification information such as your social security number.
- Add your bank/payment method. They use a tool call Plaid that allows you to log into your bank directly from the app. This allows for secure and instant bank authentication.
- Transfer funds. Move funds from your bank to the Coinbase Pro app.
- Buy bitcoin (BTC-USD) and/or Ethereum (ETH-USD). This is the part that looks a little different from the beginner-friendly version of Coinbase. When buying bitcoin or ethereum, you’ll want to look for BTC-USD for bitcoin and ETH-USD for ethereum. Think of looking at this like, “I want to buy bitcoin (BTC) with my US dollars (USD)”.
If you’re interested in more flexible buying/selling options, as well as lower fees, check out Coinbase Pro. However, Coinbase (the beginner-friendly version) may be right for you if you’re just getting started and want something with a simple fool-proof design to work with.