Contributor, Benzinga
February 9, 2022

Want to jump straight to the answer? Coinbase is better for new investors, and Gemini is better for traders looking to minimize fees.

Picking the best cryptocurrency exchange has become much more difficult in recent years because there are just so many to choose from. Most top exchanges have all the most important features, including impressive security measures to keep user funds safe. At the end of the day, the best crypto exchange for you will depend on your needs as an investor. Learn more about the differences between Coinbase and Gemini to decide which exchange is better for you.

When comparing cryptocurrency exchanges, you should consider what you value in an exchange. All investors should value an exchange's security –– both Gemini and Coinbase are industry leaders when it comes to security. Other factors you may want to consider are altcoin offerings, user interfaces, and accessibility from both mobile and desktop applications.

What is a Cryptocurrency Exchange?

Cryptocurrency exchanges pair buyers and sellers of digital assets to facilitate cryptocurrency trading. Exchanges are comprised of order books where buyers can bid at a certain price and sellers can ask at a certain price for a digital asset. Users can then buy or sell shares at market price for either the highest bid or the lowest ask. Some cryptocurrency exchanges, including Gemini, let investors earn interest on their cryptocurrency as well. Depending on the digital asset you provide, you can earn close to 10% annual interest on your holdings without taking on much extra risk.

Most exchanges today are centralized, like Coinbase, Gemini and Voyager. However, innovation in the crypto sphere has made way for decentralized exchanges (DEXs) which operate much differently than traditional trading platforms. Instead of using order books, DEXs use liquidity pools to provide liquidity to crypto investors. And, instead of making an account, you simply connect your crypto wallet and begin trading. If you chose to use a DEX on Ethereum, be prepared to pay high transaction fees to execute your order on-chain. At peak times, these fees can surpass $100 per transaction.

Important Cryptocurrency Exchange Features

One of the most important features of any cryptocurrency exchange is its security. Both Coinbase and Gemini offer industry-leading security, but due to Coinbase being a public company, many investors trust the exchange to hold their funds. If you want to hold your crypto in the most secure way possible, you should consider using a hardware wallet. Depending on your trading experience, you may want to consider order types, derivative offerings and trading indicators when considering which exchange is best for you. Gemini has candlestick charts, making it more suitable for day-traders. Coinbase has a simple layout, making it a great option for new investors.

Of course, the exchange will also need to support the tokens that you want to buy. Coinbase and Gemini have extensive lists of supported cryptos, but some exchanges like Binance have even longer lists. Additionally, 2 features that traders might want on their exchange are learning resources and advanced trading tools like technical analysis indicators. Each platform has its own resources to help beginners learn crypto basics and more. Gemini has a slight edge on trading tools over Coinbase, but both have enough to do simple technical analysis and research. 

Coinbase Overview

Coinbase was founded in 2012 with the ultimate goal of creating an open financial system in which anyone anywhere can purchase digital currencies. Originally the platform only offered Bitcoin, but it has listed more than 100 cryptocurrencies since its launch. Coinbase is actively speeding up the listing process, providing its customers with diverse investment opportunities. 

On June 24, 2021, the team launched a tool called Solidify to help list certain new tokens even faster. While the platform has listed more cryptos than some exchanges, its largest advantage over many other exchanges is its security. Coinbase has all the security bells and whistles that top exchanges should have and more. 

One downside of Coinbase is that it doesn’t support as many countries as Gemini. Its full services are available in Australia, Canada, Singapore, the United States, the United Kingdom and a long list of European countries. It also allows more than 100 countries to convert between cryptocurrencies, but residents of many of these can’t deposit or trade with fiat money on the platform. Coinbase plans on expanding its services to more countries in the future.

  • securely through Coinbase's website
    securely through Coinbase's website
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    Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.

Gemini Overview

Gemini is a popular crypto exchange founded by a pair of revolutionary investor twins, Tyler and Cameron Winklevoss. The Winklevoss twins have been a part of the cryptocurrency community since they bought up 1% of the entire supply of Bitcoin (at the time), reportedly for less than $10 per coin. Only a few years later in 2014, the twins founded Gemini, and it quickly became known as one of the safest platforms to trade cryptos. 

Gemini says it operates with a safety-first mentality and has implemented extensive security measures to prove it. It was one of the first crypto exchanges to be licensed by the New York State Department of Financial Services (NYSDFS). New York has stricter regulations than most states on cryptocurrency services, and Gemini and Coinbase are 2 of a shortlist of NYSDFS licensed exchanges. 

Coinbase Fees vs. Gemini Fees

Coinbase and Gemini have complex fee structures with a few distinct differences. Both exchanges charge nothing for cryptocurrency deposits and instant ACH bank transfers. If you plan on funding your account with wire transfers, you may prefer Gemini. It doesn’t charge a fee whereas Coinbase charges $10 for wire transfer deposits and $25 for outgoing wires. 

Gemini splits its fees depending on the size of the transaction — it charges a flat fee for orders below $200 and 1.49% for larger transactions. Coinbase has a slightly more complicated fee structure that depends on payment method and region. In the United States, using a linked bank account or Coinbase’s USD wallet to make a purchase incurs a 1.49% fee while using a debit card or PayPal costs 3.99%. It has a useful guide that breaks down fees for each region and payment method on its help center.

Coinbase and Gemini each have another free platform dedicated to more active or experienced traders — Coinbase Pro and Gemini ActiveTrader. These platforms use a maker-taker model that charges lower fees than the main platforms. The model is designed to charge more fees on trades that take liquidity off the market than make liquidity. For example, if you open a trade that is filled immediately then you are taking liquidity off the market and are charged a slightly higher fee. These fees also decrease as the size of the order increases. Gemini ActiveTrader charges slightly less for trades smaller than $50,000, and above $50,000 Coinbase Pro is cheaper. If you are looking to lower your fees as much as possible, either of these maker-taker models could be the cheaper option depending on the size of your trades. 

Security Features on Coinbase vs. Gemini

Coinbase and Gemini are both about as secure as possible for large cryptocurrency exchanges today. The platforms store most user funds in cold storage (offline) and completely insure the small percentage in hot wallets (kept online for day-to-day liquidity). Coinbase says it keeps 98% of the users’ cryptocurrencies it controls in geographically separated cold storage locations (in vaults, safe deposit boxes etc.). Gemini hasn't announced what percent of user cryptos are stored in cold storage, but it insures all funds in hot wallets. 

Your USD is also safe on Coinbase and Gemini. The Federal Deposit Insurance Corporation (FDIC) insures USD on the platforms up to $250,000 per user. The exchanges have few vulnerabilities, and most of those are insured in case of a malicious attack. The main danger that affects all exchanges is login security, which is another priority for Gemini and Coinbase. For example, 2-factor authentication can (and should) be enabled on each platform, adding an extra layer of security that keeps malicious attackers from accessing user accounts.

Coinbase Custody (the platform built on top of Coinbase to custody funds) completed System and Organization Control (SOC) 1 and 2 examinations in 2019. Gemini was also one of the first cryptocurrency exchanges to complete SOC examinations 1 and 2. These exams audit a company for key issues like security, processing integrity, privacy and availability. These audits only further enforce the notion that the companies are secure and running properly. 

Altcoins on Coinbase vs. Gemini

Coinbase and Gemini each support an extensive list of altcoins. The platforms are careful with what cryptos are listed to make sure that customers don’t lose their money to scam coins. However, that doesn’t mean you can’t lose money trading there. 

Coinbase has a significant edge with over 150 supported cryptocurrencies including Bitcoin. Gemini supports 99 cryptos, including a few that Coinbase doesn’t. Both support major altcoins including Ethereum, Aave, Dai, Polygon, Chainlink and Uniswap. Below are shortlists of popular altcoins on Coinbase or Gemini that are not listed on the other exchange. 

Altcoins on Coinbase

  • Cardano (ADA)
  • Ripple (XRP)
  • Solana (SOL)
  • Stellar (XLM)
  • EOS (EOS)
  • Dash (DASH)

Altcoins on Gemini

  • Gemini Dollar (GUSD)
  • Pax Gold (PAXG)
  • The Sandbox (SAND)
  • Fantom (FTM)

So, Coinbase or Gemini?

Coinbase and Gemini are secure exchanges with slightly different fees and features. Your preference may depend on where you are (in case one doesn’t support your country), which cryptocurrencies you want to trade and how your trading strategy will fit into the fee structures of each exchange. Large traders who plan on buying or selling cryptos worth more than $50,000 might lean towards Coinbase Pro for the lower fees. On the other hand, traders in South Korea or the Philippines would likely want to choose Gemini because most of Coinbase’s services aren't available in their countries. Either exchange will probably be a great option, but slight details may make one better than the other for you.

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