eToro versus Coinbase: Which Should You Choose?

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eToro vs Coinbase: which is better? When it comes to choosing a cryptocurrency exchange, these two prominent names often come to mind.

eToro vs Coinbase, these two popular platforms often come to mind if you are looking to venture into the world of cryptocurrency trading or investing.

Surely you have come across the two trading platforms eToro and Coinbase. But which of the two providers is better for you?

eToro vs Coinbase: what are the differences?

As part of our comparison between Coinbase and eToro, we will focus in particular on the fees, the trading offer and the deposit and withdrawal methods of both trading platforms. First of all, we will explain to you what the two providers are and what makes them different.

What are eToro and Coinbase?

eToro is a social trading platform that, after its inception, focused primarily on forex trading. A social trading platform – also known as a social broker – is a trading platform where you can discuss the latest market events with other users. So you are among like-minded people.

eToro is now a so-called multi-asset broker. This means that eToro offers different asset classes. eToro offers real cryptocurrencies and real stocks, among other things, but the trading offer consists mainly of CFDs.

CFDs are highly speculative derivative products. They reflect the price of a basic product. A base product can be a stock, a cryptocurrency or any other asset. They are particularly risky in combination with leverage. When you trade CFDs, you’re not investing in the underlying product, you’re betting on whether the asset’s price will rise or fall. You can even lose more money than you originally wagered.

Coinbase, on the other hand, is a crypto exchange. On Coinbase you can only trade digital assets. In addition to cryptocurrencies, these are now non-fungible tokens (NFT).

How do Coinbase and eToro work?

So eToro is a broker, Coinbase is a crypto exchange. But what is the difference?

With a crypto exchange like Coinbase, you trade with other users of the trading platform. This means that another Coinbase user has to sell their cryptocurrencies on Coinbase in order for you to buy them. You do not communicate directly with the other participants. Instead, trading takes place via an order book.

With eToro, on the other hand, you always trade with the trading platform itself. eToro offers you a buy and a sell price for CFDs, which should reflect the current market value as closely as possible. If you buy real shares, however, it runs quite normally via a regulated trading venue. eToro still keeps a narrow spread. It is not known where Etoro acquires the cryptocurrencies that you can buy on the platform.

Coinbase also has a broker-like user interface for beginners. However, the Coinbase exchange is integrated in the background. Therefore, in this case too, the cryptocurrencies are obtained from the deposited coins of the users.

eToro vs Coinbase – the range of cryptocurrencies in comparison

eToro now offers more than 70 cryptocurrencies. All cryptocurrencies are available in “physical” form and are also available as CFDs.

At Coinbase you can currently invest in 235 cryptocurrencies. So the choice is much larger. If we compare trading pairs on Coinbase and eToro, the difference is even bigger. Because Coinbase offers more than 500 trading pairs.

eToro and Coinbase – the fees and costs

Coinbase fees are either higher or lower than eToro, depending on which interface you trade through.

eToro does not charge a direct fee. Instead, cryptocurrencies have a fixed spread of one percent. The spread is the difference between the buy and sell price of an asset.

With Coinbase’s beginner-friendly crypto app or the beginner’s version of the desktop version, you pay a fee of 1.49 percent of the invested amount plus a spread of 0.50 percent. In our opinion, the fees at Coinbase are not broken down transparently on the website.

But there is a way to trade significantly cheaper cryptocurrencies on Coinbase. With the “Coinbase Advanced” function, you pay a maximum fee of 0.50 percent of the investment amount. As the trading volume increases, the fee decreases. Previously, this feature was available as a separate trading platform called “Coinbase Pro”.

But beware: Even if it seems as if eToro is cheaper for beginners, this is not necessarily the case. While it is true that you will pay lower fees if you keep your cryptocurrencies on the trading platform. But what about the case if you want to use them technically? For this you have to pay them off.

In this case, eToro will cost you significantly more. First you have to transfer your coins from eToro to the eToro Money Wallet – but this is only possible with six cryptocurrencies. At least 2 percent of the amount to be transferred is retained as a fee. In addition, there are the network fees, which you can only see shortly before the transfer order. In most cases, the fee for transferring from eToro to the eToro Money Wallet is around five percent. This is extremely high compared to many other trading platforms such as Coinbase or Kraken. If you then want to transfer the coins from the eToro Money Wallet to your own wallet, the network fees apply again.

Whether eToro or Coinbase is cheaper depends on how you want to store your coins.

Coinbase vs eToro – deposits and withdrawals

When it comes to deposits and withdrawals, eToro is ahead of Coinbase in most cases. This is mainly due to the many deposit methods that eToro offers. On the other hand, when it comes to depositing and withdrawing cryptocurrencies, we think Coinbase is better positioned.

Coinbase and eToro deposit methods compared

eToro supports all common online payment methods. You can deposit money via PayPal, credit card, Sofortüberweisung, Giropay, Skrill or Neteller. Of course, the Sepa transfer is also available.

It’s more difficult with Coinbase. You can deposit by Sepa transfer, credit card and instant transfer. However, the immediate transfer takes eight working days. Coinbase also states that it will no longer accept new credit cards from European users.

Deposit and withdraw money at Coinbase and eToro: fees and duration

The fees that are incurred if you want to deposit money with a crypto broker or a crypto exchange are also particularly important. eToro handles this very simply and user-friendly. There are no deposit fees whatsoever. However, the withdrawal fees are quite high at $5.

If you want to deposit or withdraw money from Coinbase via Sepa transfer, a flat rate of $0.15 applies. It becomes significantly more expensive if you deposit by credit card or direct transfer. Then the fees amount to 3.99 percent of the amount to be deposited.

In our experience, Coinbase processes payouts much faster. At Coinbase, these are usually executed on the next working day. With eToro you can count on one to two working days more.

eToro vs Coinbase: Cryptocurrency Deposit and Withdrawal

The differences in deposits and withdrawals are particularly noticeable in cryptocurrencies. At eToro, the process to withdraw a cryptocurrency takes up to 5 business days. As described above, the fees can amount to up to five percent. With Coinbase, on the other hand, you only have to wait a few moments to a maximum of a few hours. There are network fees, but these amount to a few cents.

In addition, you cannot deposit cryptocurrencies at eToro. This means that on eToro you can only sell cryptos that you bought on the platform and did not send to the eToro Money Wallet. With Coinbase, on the other hand, you can deposit all tradable cryptocurrencies and sell them on the stock exchange.

Features of eToro and Coinbase

As a social trading platform, eToro not only allows you to interact with other users of the platform, but also copy trading. Copy trading allows you to copy the trades of public traders. You can see the risk profile and previous trading profits of the so-called copy traders. However, you also take a high risk, because you cannot influence the trades yourself.

Nevertheless, we see Coinbase ahead in terms of functions. This is mainly because Coinbase offers crypto savings plans. You can also stake your coins at Coinbase.

eToro offers Ethereum and Cardano staking in other countries. However, this is not possible in Germany. Coinbase’s NFT marketplace and the Coinbase Visa Card are other features that eToro does not offer.

Coinbase vs eToro Review – Support and Customer Service

Coinbase and eToro both offer responsive customer support, with Coinbase excelling in its timely responses to user queries and concerns. On the other hand, eToro provides a comprehensive customer service system with educational resources to aid traders.

While both platforms demonstrate commitment to user assistance, Coinbase’s efficient support sets it apart, whereas eToro’s emphasis on educational resources contributes to a well-rounded customer service experience.

Coinbase vs eToro – Ease of Use and User Experience

Both trading platforms want to offer beginners and advanced investors an easy-to-use user interface without missing the most important functions.

In our view, Coinbase is much better at this than eToro. As a beginner, it is more difficult to find your way around eToro. This is mainly because eToro offers a single interface to trade CFDs and real stocks as well as cryptocurrencies. For you as a beginner it could be more difficult to see whether you are about to open a CFD position or whether you are buying real assets.

In addition, we find it somewhat confusing to sell a stock or cryptocurrency on eToro. Because behind the button ” Sell Bitcoin ” hides a short position using Bitcoin CFDs. If, on the other hand, you want to sell purchased bitcoins, you must close the open ” Buy Bitcoin ” position in your portfolio.

Security and Trust at Coinbase and eToro

Coinbase and eToro are trading platforms that you must trust your money to when you use them. Therefore, they should be as safe as possible and act transparently and seriously.

While eToro was founded in 2007, Coinbase has existed since 2012. However, Coinbase is much more experienced when it comes to cryptocurrencies. Because Etoro only added Bitcoin CFDs in 2014 before real cryptocurrencies were tradable in 2017.

Coinbase states that cryptocurrencies are partially insured. eToro does not have such insurance. Although customer deposits are insured up to one million dollars, this does not apply to cryptos. How eToro stores cryptocurrencies is also not known.

According to the FAQ, both companies now have a license to offer crypto custody business in Nigeria. We rated this positively on both trading platforms. Other large crypto exchanges such as Kraken or Binance do not have this license.

eToro Pros & Cons

Before we conclude our comparison between Coinbase and eToro, let’s take a look at the pros and cons of both trading platforms.

eToro benefits

The main advantages of eToro over Coinbase are the numerous deposit methods. It is very easy and free to start buying cryptocurrencies right away.

The ability to buy real stocks and cryptocurrencies through a single provider is also an advantage.

eToro cons

However, eToro remains predominantly a CFD broker in our opinion. If you want to buy your cryptocurrencies on eToro in order to later transfer them to your own wallet, you have some disadvantages.

For one thing, not all cryptocurrencies can be withdrawn. You can only pay out six of the more than 70 cryptocurrencies offered and thus use them technically. You also have to reckon with horrendous fees for the transferable coins.

So there are the following advantages and disadvantages of eToro

eToro advantages and disadvantages at a glance

Advantages Disadvantages
✔️  In addition to cryptos, shares and CFDs can also be traded   Not all coins can be paid out
✔️  Many payment methods (e.g. Paypal, Giropay or credit card)   High fees for crypto withdrawals
✔️  Deposits are all free   Sometimes confusing for beginners (when selling assets)
Source: MarketsXplora research as of August 5 2023

Coinbase Pros & Cons

The US crypto exchange Coinbase meanwhile has significantly more properties that we can book as an advantage. The disadvantages, on the other hand, are particularly noticeable in the trading fees.

Coinbase advantages

Unlike many other international crypto exchanges, Coinbase has a crypto custody license and can therefore offer its service. Telephone customer service is not available on most crypto exchanges.

In addition, Coinbase convinces with additional functions such as an NFT marketplace or staking to receive interest on its cryptocurrencies.

Coinbase cons

The biggest disadvantage of Coinbase is the non-transparent fee policy and the high costs that you will incur if you trade cryptocurrencies in the entry-level version.

We can therefore summarize the advantages and disadvantages of Coinbase as follows:

Coinbase advantages and disadvantages at a glance

Advantages Disadvantages
✔️ Over 200 cryptocurrencies tradable Higher fees compared to other platforms
✔️ Professional version available with lower fees Fees partially non-transparent
✔️ Staking available Delayed response during high traffic
✔️ Detailed learning and explanatory content
✔️Responsive customer service
Source: MarketsXplora research as of August 5, 2023

Conclusion – Who is Better: Coinbase or eToro?

Which of the two providers performs better in the comparison between eToro vs Coinbase? Since we can only compare eToro and Coinbase in terms of cryptocurrencies, the US crypto exchange comes out of this comparison with an advantage.

We think Coinbase is for those who:

  • want to buy real cryptocurrencies
  • attach great importance to storing their coins themselves
  • want to stake their coins

eToro, on the other hand, is suitable for users who:

  • want to speculate on crypto CFDs
  • only sometimes want to buy cryptos without using them technically
  • do not want to take care of storing their coins in a wallet themselves

In the end, it always comes down to why you want to invest in cryptocurrencies.