Coinbase Fees [Complete 2022 Guide]

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With over 56 million verified users, Coinbase is one of the most popular crypto-related apps and services available.

However, many people are unaware of how the fees work with Coinbase and that in some cases, they are actually fairly expensive to use.

Let’s take a look at everything you need to know about the fees associated with Coinbase.


In This Post:


Does Coinbase Have Fees?

Yes, like most Bitcoin “wallet” services, there is a fee associated with buying and selling Bitcoin through Coinbase (currently 1%), as well as potential bank transfer fees from your bank if they decide to process the transaction (on top of Coinbase’s fee). 

These fees can vary depending on how much money you’re exchanging and which payment method you choose to use.

The good news is that these fees can be reduced or even waived with certain payment methods, but this varies by country and by how you’ve set up your account.

Also note that credit card purchases take a few days to show up, while bank transfers are the fastest way to buy and sell Bitcoin on Coinbase.

If you want complete freedom over how much fees you pay, then maybe other exchanges which offer lower or 0% fees would be better suited to your needs. 

But if not, it is not recommended to go with Coinbase which is considered one of the most trusted places to buy and sell cryptocurrency online today.

Who knows what the future holds as far as regulation goes? In any case, it’s worth knowing about all these details before you start investing in cryptocurrency anyways. This is because there are tons of options out there where you can exchange it from fiat currency into BTC. 

And if you’re going to buy a lot of Bitcoin or other cryptocurrencies, then it might be a good idea to compare the pros and cons with every single exchange.

How Much Are Coinbase and Coinbase Pro Fees?

Coinbase charges $1.99 to $2.99 for cryptocurrency transactions, but it can vary depending on your payment method and location. For example, the fee is only 1% using your bank account in the United States but up to 4% using a credit or debit card. 

Coinbase Pro has lower rates than Coinbase because it does not include payment processing fees or other charges that affect users’ wallets or accounts beyond trading itself.

Coinbase Pro is even cheaper with a 0% taker fee, 0% maker fee

Coinbase Pro is very cheap in terms of fees. It charges 0% for takers and 0.1% for makers who provide liquidity to the exchange or add orders that are not immediately matched by an existing order. 

For example, if you place an order which isn’t matched until much later when a matching one already exists, then your maker fee will be applied only at the time when it’s matched instead of when you placed the order. 

For Coinbase Pro, both market takers and market makers receive discounts on all their trading fees when they use limit orders because this increases liquidity in the exchange. 

The more people trade with limit orders, the less slippage occurs during price moves which mean reduced cost for traders overall.

Are Coinbase Fees Tax Deductible?

Coinbase fees are tax-deductible. It doesn’t matter what kind of transaction costs you paid, whether it was buying or selling cryptocurrency on Coinbase, or exchanging it for another coin or fiat currency. They’re all tax-deductible. 

It doesn’t matter if you bought Bitcoin and later exchanged it for Ethereum, either, as long as you didn’t sell your Bitcoin at a loss, the full amount is available as a deduction from taxable income your 1040 Schedule A.

The good news is that the IRS has stated that fees paid for cryptocurrency are tax-deductible. The caveat here is that there may be some other concerns to keep in mind, including the possibility of wash sales. 

So before you start deducting your Coinbase fees, it’s worth spending some time reviewing the potential implications.

How To Claim Your Deductible Fees

When you buy or sell cryptocurrency through Coinbase or any other provider like Gemini or Kraken, the fee should automatically show up on your confirmation screen. 

If not, don’t worry, calling customer service can help. Although you should make sure they apply to the right year by checking with a service rep.

Remember: Coinbase gives away free trades when using their platform. You can benefit from this as every time you make a purchase, the fee will be waived. You can set up trading alerts and limit orders to trade on your own time without worrying about trading fees.

Can You Avoid Coinbase Fees?

No. You can’t avoid Coinbase fees. Coinbase fees are taken from the total amount of currency that you exchange. The fee is based on what payment method you use and what type of account you have.

For example, if you withdraw $500 worth of bitcoin and the transaction cost (mining fee) to send it is $5, then your net withdraw will be $495. Coinbase charges a flat 1% for this withdrawing service.

If you want to avoid Coinbase fees, there are two ways to do so: 

1. Use bank wires as your withdrawal method, as these transactions incur no fees charged by Coinabase. 

Instead, they require a fixed fee paid by your bank (~$10). 

2. Purchase a high amount of bitcoin at one time. Each time you purchase $150 or more of bitcoin, Coinbase waives the fees.

For example: If the withdrawal fee for $100 worth of bitcoin is $1 and you buy $300 in bitcoin during one transaction, then once your account processes the transaction, it will show that you bought $301 worth of bitcoins. 

This trick lets you get around their 1% per transaction fee, by completing multiple transactions.

Why are Coinbase Fees So High?

Coinbase has high fees because Coinbase charges a spread of about 0.5% for cryptocurrency sales and purchases

Rates may be higher or lower depending on market fluctuations. If you buy $1000 worth of Bitcoin (BTC), for example, the spread will likely cost you about $1 per coin, making regular withdrawals costly if you sell regularly.

Why is this bad? This means that regular users get ripped off by Coinbase’s draconian fee structure; especially when utilizing Coinbase Pro (GDAX) to buy/sell coins at a stable price to maximize profits. 

It also makes it difficult for new investors to use their platform without being discouraged from selling coins they’ve purchased because of exorbitant fees.

Is there a solution? Fortunately, for investors who want to take advantage of the cryptocurrency industry without being slammed by Coinbase’s ludicrous fees, there is a way around it: GDAX and Coinbase Pro. 

Even though these platforms offer the same service as traditional Coinbase- they’re not the same when it comes to fees. 

GDAX offers significantly lower transaction costs than its exchange predecessor; in fact, if you’re using your Coinbase wallet on GDAX then you can trade with no transaction fee at all! This makes the spread less significant when trading larger sums of money.

How Can I Reduce My Coinbase Fees?

You may have noticed that Coinbase charges high fees for using their platform. These are some steps you can take to reduce these fees on your account when dealing with Coinbase transactions.

Step 1: Sign in to your account at https://pro.coinbase.com/.

Step 2: Click on the “Accounts” tab and the “USD Wallet.” This should be near the top on a blue background on some devices and at the bottom on others. If you have a different version, please search for the USD Wallet.

Step 3: Click on ‘Deposit’ near the top of this section. 

Step 4: Select ‘Coinbase.com’ if it’s not already selected, and select the type of currency you would like to transfer (USD, BTC, etc.). Please note that if you are transferring a different type of currency than what is listed, you will need to select its deposit option in Coinbase Pro instead. 

That’s all there is to reducing those annoying fees from Coinbase.

Do Coinbase Fees Change?

Coinbase fees do not change. This means that Coinbase will always charge you the same amount of flat fee for every transaction and this will not be dependent on how much you buy or sell (if any at all).

This is because Coinbase, like other exchanges, make their money from trading volumes rather than currency prices. Their main income comes from trading volumes and currency pairings rather than currency prices. 

They need to match buyers and sellers, so they will be making more money if they charge very small fees per trade.

Are They Going Up Anytime Soon?

No, that isn’t something that seems likely or practical anytime soon. However, their fee scale may change over time as they begin to charge more per trade. 

This wouldn’t be surprising given how competitive cryptocurrency exchanges are right now and Coinbase appears to use this as a selling point to attract future investors.

But for the time being, they are unlikely to do so. You can check on their site or support pages for any new updates, but it seems that the market is opening up with more competition and this will likely drive them to continue keeping their fees relatively low.


Wrapping Up

Coinbase has some generally fair fees for the most common transactions. However, the fee is over 1% for sending BTC to another wallet. 

The more you put in, the worse it gets. For example: if you buy $100 worth of ETH on Coinbase Pro, your fee will be under 0.15% but if you buy $1000 worth of ETH with ETC at Coinbase Pro then your transaction fee is over 2%, that’s 20 times higher than buying $100 worth of ETH.

So be mindful when sending BTC or other coins to wallets outside Coinbase. This is because chances are by sending more coins you’ll get hit harder with more fees. Also please note that these fees are subject to change depending on the status of Coinbase.

References

  1. https://help.coinbase.com/en/coinbase/trading-and-funding/pricing-and-fees/fees
  2. https://www.investopedia.com/coinbase-vs-coinbase-pro-5120704
  3. https://www.gobankingrates.com/investing/crypto/coinbase-fees/
  4. https://www.quora.com/Why-are-Coinbase-fees-so-high-What-does-it-offer-to-justify-this
  5. https://help.coinbase.com/en/pro/trading-and-funding/trading-rules-and-fees/fees

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