- Does coinbase limit which cryptocurrencies
- It's Available for Android & iPhones
- Fees for Buying & Selling Cryptocurrencies
- Why do I see cryptocurrencies that aren’t supported by Coinbase?
- How Those Fees Apply When Buying
- How Those Fees Apply When Selling
- Other Fees for Buying & Selling
- Coinbase to soon list 17 new digital currencies
- Length of Time Before Funds Are Available
- Maximum Spending Limits
- Coinbase Review: Does It Compete In 2019?
- Coinbase Isn't Available Everywhere in the US
- They Can Suspend Your Account for Shady Transactions
- How to Easily Increase Your Bitcoin Purchase Limits to $100 on Coinbase
- You Are Responsible if Your Account Gets Hacked
- Can You Really Avoid Paying Coinbase Fees?
- Your Money Is Only Partly Insured
- How Do I Increase My Coinbase Weekly Limits?
- Coinbase Is Not Anonymous
- Contact Support
- The IRS Wants Its Fair Share
- There Are Sporadic Outages
- Have Any Coinbase Questions?
Does coinbase limit which cryptocurrencies
Coinbase is the primary go-to for many users when it comes to investing in Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Litecoin (LTC) due to its user-friendly interface. But before you join them, know that this ease of use comes with a price. Coinbase charges fees for each transaction, and your bank might even add fees on top of that.
Plus, there is some fine print to be aware of.
Though its user agreement may be easy enough to understand through careful reading, the fees charged by Coinbase for transactions can be a little confusing. And then there are imposed limits to be aware of, as well as regulations and important details that are not explained in the user agreement.
Understanding these fees, important terms, and hidden details are very important in order to minimize unpleasant surprises as you buy and sell digital cryptocurrencies.
So, we decided to delve into it a little deeper to make it easier to grasp, so you know everything you need to know before opening a Coinbase account on your smartphone.
It's Available for Android & iPhones
By far, the biggest reason for Coinbase's rise to prominence is its accessibility.
As one of the handful of bitcoin wallet apps that's available for both iOS and Android, Coinbase has high ratings from users of both platforms due to is reliability and intuitive interface. Coinbase is free to install, so give it a try if you hadn't already done so and see if this wallet is right for you.
It's important to note that the fees and other details listed below are for US-based transactions, which are subject to change at any time and may vary state by state.
Fees for Buying & Selling Cryptocurrencies
As far as fees go, Coinbase charges a small price for both buying and selling in a combination of both fixed and variable fees, depending on the total amount and method of payment or deposit.
For smaller purchases and sales, the app charges a flat fee, regardless of whether you're using USD stored in your wallet, a bank account, or a credit/debit card.
Why do I see cryptocurrencies that aren’t supported by Coinbase?
The fees for small transactions are:
- $0.99 for buying and selling at $10.99 and below
- $1.49 for buying and selling from $11.00 up to $26.49
- $1.99 for buying and selling from $26.50 up to $51.99
- $2.99 for buying and selling from $52.00 up to $78.05
The fixed fee of $2.99 also covers transactions up to $200 within Coinbase if you use either your USD wallet or bank account for buying and selling cryptocurrency, with a variable fee of 1.49% kicking in for purchases and sales made at $201 and above.
If you use your credit or debit card for purchases or sell and deposit your proceeds into your PayPal account, Coinbase will charge you a variable fee of around 3.99% for transactions starting from $78.06 on up.
How Those Fees Apply When Buying
When buying one of the three cryptocurrencies currently found in Coinbase, the app charges you a fee that's then deducted from the amount that you wish to buy.
For example, if you spend $100 to buy ether using your bank account, and the fee is $2.99, that fee will be included from that $100, so you'll only receive $97.01 worth of ether.
So to receive exactly $100 worth of Litecoin, you'll have to add that fee on top of it and pay $102.99.
Whatever your end fee may be, Coinbase will show you the amount on the confirmation page before you commit to purchasing bitcoins, bitcoin cash, ether, or litecoins, along with displaying the value in both USD and your target digital currency to give you a clearer picture.
How Those Fees Apply When Selling
If you decide to sell part or all your holdings on either bitcoin, bitcoin cash, ether, or litecoin, Coinbase will subtract the fees from the amount you wish to sell to arrive at the total.
For example, if you decide to sell $49 worth of bitcoin to add to your USD wallet, and the fee is $1.99, your total will actually be $47.01.
The full $49 worth of bitcoin will be subtracted from the bitcoin wallet in your Coinbase account and $47.01 will be credited to the account of your choosing. If you wanted to sell exactly $49 worth of bitcoin, you'd need to input $50.99 instead to account for the fee.
As when purchasing, Coinbase will show you all fees on the confirmation page so you can adjust accordingly before committing.
Other Fees for Buying & Selling
In addition to fees by Coinbase, it's very important that you check with your bank, as it may tack on additional fees on top of what Coinbase is charging.
For instance, some users report being charged with a 3% foreign transaction fee for trades made using a debit or credit card, which is a standard fee for international conversions.
As it turns out, Coinbase has been known to use a London-based company to process debit and credit card-based transactions.
Coinbase to soon list 17 new digital currencies
Though these reports are sporadic and don't seem to affect everybody, it's still worth double-checking with your bank with regards to international fees to minimize headaches.
Length of Time Before Funds Are Available
Depending on which method you use to buy and sell bitcoins, bitcoin cash, litecoins, and ether, transaction times can vary from near-instantaneous to a couple of days. Whatever method you use for buying and selling, you lock in the rate at which the digital currency is going for — even if it triples in value or gets cheaper minutes after making a purchase or sale.
Though buying digital currencies using your bank account can take up to one week to complete, Coinbase has rolled out some changes on the way to shorten the time frame.
Once complete, any cryptocurrency you buy using a bank account will instantly post on your wallet as long as you've verified your identity.
While you're free to buy and sell digital currencies within the app, you won't be able to take funds out of Coinbase until your initial payment clears.
For instant transactions with fees comparable to buying and selling using your bank account, you can use cash from your USD wallet to either purchase bitcoins, bitcoin cash, litecoins, or ether, or deposit sales proceeds directly into it.
You also have the option depositing USD from your bank account directly into your USD wallet free of any fees, though this takes 4–5 business days to complete.
If you don't mind the higher fees, you can use either a debit or credit card to purchase digital currencies and/or deposit your proceeds from selling them into your PayPal account.
These transactions are executed almost instantly, so if you need some ether in a hurry but have no funds in your USD wallet, this is the only route to go — just be ready to eat a hefty 4% fee for purchases and deposits over $78.
Maximum Spending Limits
Coinbase places limits on how much you can purchase and sell on a weekly basis.
Coinbase increases spending limits based on the length of time and volume of trading you've done, along with identity verification such as providing your phone number, personal details, and a government ID.
For instance, if you've used Coinbase for at least three years and have your identity fully verified, but only trade sporadically in small amounts, it's not unreasonable to have weekly transaction limits of $50,000 combined for all of the wallets you have within Coinbase, $10,000 for bank accounts, and $3,000 for debit or credit cards.
Soon, however, spending limits imposed by Coinbase will be increased for users who've had their identities verified.
The most significant change involves the weekly maximum limit of $25,000 for bank account transactions. This limit has now become a daily limit, giving heavy users of the platform a lot more access to buy and sell cryptocurrencies.
Even if the changes in spending limits doesn't apply to you, however, you can still further increase your weekly limits by adding in more bank accounts and credit or debit cards, especially if you plan on heavily investing on digital currencies.
Doing so will increase your daily and weekly limits as your trading volume get higher.
Your weekly spending limits are fully refilled every seven days at a rate of 1/7 a day.
So if you sold bitcoins at your maximum limit of $49,000, your limit would slowly refill by $7,000 each day for seven days until it's fully replenished.
These limits are only regarding Coinbase itself.
Coinbase Review: Does It Compete In 2019?
Your bank may have limits that are lower, so read the fine print in your banking contract or call your bank to find out what those limits are.
Coinbase Isn't Available Everywhere in the US
Unfortunately, not everyone in the in the United States can use Coinbase for their cryptocurrency needs.
As of June 2016, Coinbase and other bitcoin services like Coinmama are no longer available for use for residents of Wyoming due to strict regulations regarding bitcoin wallet services.
Coinbase has argued that the need to obtain a license under the condition of having cash reserves equal to the face value of all bitcoin held on behalf of customers is not only impractical but very expensive and inefficient for Coinbase to implement in order to please the state.
Because of this, Coinbase has opted to suspend operations in Wyoming, indefinitely.
They Can Suspend Your Account for Shady Transactions
Unlike private cryptocurrency wallets that gives you total freedom to use your bitcoins or ether as you see fit, Coinbase has placed some limitations with regards to spending and receiving digital currencies.
Under Section 6.4 of the user agreement, for example, Coinbase reserves the right to monitor your account and keep track of where you send and receive cryptocurrency to make sure you're not using it for purposes that fall under what's prohibited.
"Prohibited Use and Prohibited Business," which can be found under Appendix 1 of the user agreement, covers a wide array of activities and businesses, such as online abuse, gambling, high-risk businesses, illicit drugs, pornography, and pyramid schemes, to name a few.
How to Easily Increase Your Bitcoin Purchase Limits to $100 on Coinbase
Violating this can result in the sudden suspension or termination of your Coinbase account.
While these prohibitions seem reasonable on the surface, It's still worrisome as it technically prohibits us from using our bitcoins on businesses Coinbase deems high risk.
This is a slippery slope in and of itself since cryptocurrency exchanges can very well fall under this umbrella. So if you transfer bitcoins to an exchange site like Poloniex to purchase other less popular cryptocurrencies like stellar, Coinbase can potentially suspend or terminate your account without notice and freeze any in-app assets you may have in the process.
You Are Responsible if Your Account Gets Hacked
Another disclosure worth noting is Section 6.9, which basically states that you are solely responsible for keeping your wallets and other vital information as secure as possible.
This means using various measures such as strong passwords and two-factor authentication to keep thieves out.
Keeping your wallet as secure as possible can't be stressed enough because once your bitcoins, bitcoin cash, litecoins, or ether are gone, your chances of getting them back are almost impossible.
Can You Really Avoid Paying Coinbase Fees?
To back this up, Coinbase's insurance policy won't cover any losses you suffer due to your account being hacked and compromised. That said, Coinbase does offer some protection with regards to your both your USD and cryptocurrency wallets.
Your Money Is Only Partly Insured
According to Coinbase, any cash that you have in your USD wallet is stored in a separate bank account.
As such, your USD wallet is insured by the FDIC up to a maximum of $250,000 from theft, fraud, or if Coinbase closes up shop.
On the other hand, because digital currencies like bitcoin are neither considered legal tender nor backed by the government, protection by the FDIC doesn't extend to your cryptocurrency holdings. Coinbase, however, offers some protection against fraudulent activity and theft and fully insures all digital currency that's "stored online." So if Coinbase ever gets compromised as a whole, any bitcoin, bitcoin cash, litecoin, or ether you have that were stored online and stolen will be returned to you.
There is a massive catch to this: Coinbase only has less than 2% of customer funds stored online.
How Do I Increase My Coinbase Weekly Limits?
This means that more than 98% of all the funds that it stores offline aren't protected from theft or fraud. So if anyone ever got into the company's offline storage and cleaned it out completely, any digital currency that you lost as a result will likely never be returned.
Coinbase Is Not Anonymous
Long before it gained mainstream popularity, bitcoin was widely regarded as the cybercriminal's currency of choice due to its security and supposed anonymity.
In truth, however, bitcoins are nowhere near as anonymous as you'd think. According to Bitcoin.org:
All bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any bitcoin address.
However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why bitcoin addresses should only be used once.
Always remember that it is your responsibility to adopt good practices in order to protect your privacy.— Bitcoin.org
Coinbase, with its requirement of identity verification, strips these layers of privacy even further, and firmly attaches your identity to your wallet addresses. So if you decide to buy illegal items such as drugs on the dark web using your coinbase account, don't be surprised if you wake up one day and not only find your account and assets frozen, but also find federal authorities knocking on your door with a warrant.
The IRS Wants Its Fair Share
Where there's tons of money to be made, the taxman will surely follow, and bitcoin exchanges like Coinbase aren't immune to this fundamental truth.
In November 2017, Coinbase was forced by the federal court to comply with the IRS and divulge information on at least 14,000 accounts that were responsible for 9 million transactions between 2013 and 2015.
In its request, the IRS originally demanded that Coinbase identify and report more than a million accounts, but later scaled it back to only report high-volume traders with accounts that are worth $20,000 or more and only focused on bitcoin.
With one bitcoin now worth close to $20,000 and rising, significantly more Coinbase account holders will come under the scrutiny of the IRS as it prepares to investigate transactions for 2016 and 2017.
There Are Sporadic Outages
Coinbase seems to be struggling to keep pace with demand as the cryptocurrency hype train continues to gain momentum. New users are flooding in and that has congested Coinbase so much that it temporarily halts trading from time to time to relieve the pressure.
Because of high-traffic volume, don't be surprised if you experience intermittent service while trading digital currencies in Coinbase.
Hopefully, this issue will be resolved soon as Coinbase works on its network to better handle a significantly higher number of users. We'll be sure to keep you posted as more information comes in regarding outages.
Have Any Coinbase Questions?
As always, we welcome any thoughts or questions you may have about buying and selling cryptocurrencies on Coinbase.
Just reach out in the comments section below.
Cover photo and screenshots by Amboy Manalo/Gadget Hacks
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