Are you someone that is looking to dive into purchasing some Bitcoin and thinking about purchasing it through Coinbase? Without a doubt, Coinbase is the most secure and stable exchange for purchasing Bitcoin and cryptocurrencies.

The company is reliable and secure, however it comes with heavy fees for both buying and selling. This includes sending Bitcoin or other cryptocurrencies to your friends and family.

Let’s take a quick look at their fees.

Base rate of 4% for all transactions**

Payment Method for Purchase Effective Rate of Conversion Fee (after waiver)
U.S. Bank Account 1.49%, with a $0.15 minimum
Coinbase USD Wallet 1.49%
Credit/Debit Card 3.99%***

 

Payout Method for Sale Effective Rate of Conversion Fee (after waiver)
U.S. Bank Account 1.49%, with a $0.15 minimum
Coinbase USD Wallet 1.49%
PayPal 3.99%

 

USD Deposit Method Fee
ACH Transfer Free
Wire Transfer $10 ($25 outgoing)

 

I’m not sure about you, but we think that’s quite expensive especially if you’re only looking to invest a small amount to diversify your portfolio.

The good news is that there are actually ways that you can avoid paying those heavy fees.

So what’s the trick to avoid Coinbase fees?

Basically, the method involves taking advantage of the fact that GDAX and Coinbase are owned by the same company, and GDAX doesn’t charge fees for certain trades.

GDAX is the more “professional” version of Coinbase that allows you to trade cryptocurrencies with in-depth technical analysis charting tools and more.

What Coinbase doesn’t tell you is that you can avoid fees by leveraging GDAX.

At the end of the day, which company would tell you that right?

So you would sign up for Coinbase like you would normally through their site. If you already have an account on there, then you can login.

Next step would be to link your bank account with your Coinbase account. Then, you sign up for GDAX and go through their verification process.

Once your bank transfer is in your Coinbase account, you can instantly transfer it to your GDAX account since they’re both connected.

Once you have access to your funds from your GDAX dashboard, you can go to the left-hand side of the screen and place an order,

The default option that they provide for you is a “market order”

We want to avoid this and only place a “limit order” That is the trick to avoid the Coinbase fees. It looks like this

limit order GDAX

Incase you aren’t familiar with what a limit order is.

Limit Buy is placing an order with conditions. Here you can specify the quantity and at what price point, it should execute.

Say, current ETH price is $1100

Buy 2 ETH when ETH vs USD price comes down to $1000

In this case, you are making an offer and it gets executed only when someone takes it. It’s quite straight-forward.

So, which price should you pick?

Look at the scrolling list of orders, then pick a price in the middle. Put that price in, and you’ll pay zero fees. You’ll end up with an open order for that price, however this does not mean that your order will be filled for sure.

The downsides to using GDAX to avoid Coinbase fees

Even though this might sound like the perfect solution, there’s a downside to it as well.

Nothing in this world is perfect.

One of the downsides to using GDAX to avoid Coinbase fees is that it takes a lot longer for you to purchase Bitcoin and you have to switch between two different platforms even though they are under the same company.

As for the downsides to using GDAX itself:

Cons

  • The depth analysis charts used are not yet professional
  • The support team has a tendency of providing shallow answers, even when clarifications are absent in the FAQ list
  • The lack of mobile applications presents an analog approach as well as promotes the tendency of website freezing due to many users
  • The increasing of the number of compatible currencies could lead to a complex blockchain, in the near future

However Coinbase is a legit company and they are working hard to improve their platform including GDAX.

GDAX is a successful digital transactions platform when compared to most of its competitors. Considering the presentation of this website, it is relevant to both the beginners and professionals.

You can always sell your Bitcoins and transfer it back to Coinbase when you are ready to withdraw your earnings back into your bank account.

Are there any alternative options to avoid Coinbase’s fees?

If you are a casual investor and you’re just looking to get your feet wet in the cryptocurrency space, you can always use Robinhood. Robinhood recently released their cryptocurrency trading with zero fees for people who live in the USA.

All you have to do is sign up for an account directly on their site. You can do so here.  If you use that link, you’ll receive a free stock (Apple etc.) through their referral program.

What we love about buying Bitcoin through Robinhood is how there are no transaction fees and you can take advantage of Robinhood’s instant which means unlike Coinbase, you won’t need to wait for your bank transfer to come in before you can buy Bitcoin.

Just initiate the bank transfer and the funds will be there for you as soon as you initiate the transfer. Win-win.

Another option is to use an upcoming company called Uphold, which also doesn’t come with any fees.

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Author: Wilson

Wilson is a 3x Startup Entrepreneur. He is passionate about the cryptocurrency space. You can catch him tweeting about cryptocurrency often @itswilson8

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