Coinbase Fees (Complete 2022 Guide)

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With Coinbase’s recent acquisition by the New York Stock Exchange, this could be the next big thing in crypto. But even with all of that commotion, Coinbase remains a popular cryptocurrency exchange among experienced traders and inexperienced newcomers alike. 

One of the most popular features of the exchange is its fees which can be as low as 0.15%! All fees are calculated based on the payment method chosen by customers, and they can also make purchases using U.S. Dollars or Euros.

Coinbase fees are incurred when buying or selling virtual currency using Coinbase, a major wallet and cryptocurrency exchange. Coinbase charges fees depending on which type of transaction you’re placing and how you’re paying for it. This article will discuss the Coinbase fees for each transaction type and answer various questions that will make you understand better.

In This Post:

Does Coinbase Have Fees?

As a cryptocurrency exchange, Coinbase charges fees for every transaction on the exchange. In addition to bitcoin, customers can trade in Ethereum, a second blockchain-based cryptocurrency that offers additional features beyond Bitcoin.

These fees are designed to offset operating an online business, covering overhead costs like bandwidth and providing 24/7 customer support to users. Fees are based on the payment method used to buy or sell a given cryptocurrency.

Several Coinbase Fees apply; let’s take a look at them:

Coinbase Fees, USD

Coinbase charges a set of fees for each payment method. These fees are:

For purchases with a credit card or bank account, Coinbase charges either 1.49% + $0.15 or 2.99% + $0.30, depending on the payment method and country you live in (example: 1.49% + $0.15 if you live in the USA but 2.99% + $0.30 if you live in Japan).

Coinbase fees for bank transfers

For bank transfer payments, Coinbase charges a fixed per-transfer fee of $5. It is regardless of the amount you’re sending.

Coinbase fees for wire transfers

For wire transfer payments, Coinbase charges a fixed per-transfer fee of $10. It is regardless of the amount you’re sending. Note that your payment provider may charge additional fees on top of these two if they are charged as such by your bank.

Coinbase fees for credit and debit cards

Coinbase charges a flat fee of 2.99% + $0.30 per purchase for credit and debit card payments. The fee depends on the country that you live in, with a fixed fee of 2.99% + $0.30 in the USA, for example, but a variable fee of 1.49% + $0.15 in Japan due to currency rates between both countries (exchange rates are updated each month).

The flat fees charged by Coinbase are shown in the following table;

Total Transaction amount                                    Transaction Fee

For $10 or less$ 0.99
For $10 or more or less than /equal to $25$1.49
For $25 or more or less than/equal to $50$1.99
For $50 or more or less than/equal to /equal to $100$2.99

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For Users in the U.S., the variable fees incur as follows,

For purchases with a credit card or bank account, Coinbase charges either 1.49% + $0.15 or 2.99% + $0.30, depending on the payment method and country you live in (example: 1.49% + $0.15 if you live in the USA but 2.99% + $0.30 if you live in Japan).

Coinbase charges a flat fee of 3.9% for purchases with a credit or debit card.

For Users using U.S. bank accounts, Coinbase charges 1.49%, and for those using Coinbase USD wallet, a fee of 1.49% + $0.15 is charged.

Therefore, the minimum purchase amount which can be made using Coinbase USD wallet is $1.49

Can You Avoid Coinbase Fees?

No. Coinbase fees are unavoidable. The costs charged by Coinbase are deducted from the total number of coins you exchange. The cost is determined by the payment option you choose and the account type you have.

Does Coinbase Always Charge a Fee?

It is one of the most common questions asked. The answer is no, and they don’t always charge a fee. If you buy bitcoin and store it in your Coinbase account, there won’t be any fees involved, but if you decide to sell your bitcoin and convert it back to another cryptocurrency or USD, then a fee will apply.

However, withdrawal fees will be charged when you withdraw money from your Coinbase account.

Is There a Way to Avoid Coinbase Fees?

Fortunately, there is, the most preferred way to avoid Coinbase fees is to understand Coinbase Pro.

Coinbase Pro is Coinbase’s professional trading platform, which offers its traders more advanced features than those available on the standard Coinbase exchange. These features include:

Advanced Charting

While the standard Coinbase trading platform offers a basic level of technical analysis via candlestick charts, data from additional exchanges can be added to the charts on a Pro account, making them useful for more serious investors.

Advanced Trading Tools

Coinbase Pro employs specialized trading tools which are free to use and give traders a better way of looking at historical data and charting. These include the options for continuous buy and sell orders, stop-loss orders, and trailing stops.

Therefore, Transfers between them are quick and free because they are both controlled by Coinbase. It is noteworthy since the costs charged for the same activity on Coinbase Pro are significantly lower than on Coinbase.

These transactions between Coinbase and Coinbase pro follow a systematic procedure of the Maker-taker model.

Here are the types of transactions followed;

Taker orders: These are orders immediately executed against existing order books. The “Taker” orders are those that are placed at market pricing and completed instantly, and they are charged a fee of 0.04 percent to 0.50 percent.

Maker orders: This order type lets users decide to place an order at a particular price, which would then be considered a maker order that waits to be matched and executed at another user’s taker order.

For example, you want to sell your bitcoin and decide to place a limit sell order for $3500. The market falls, and you cancel your order. However, the price rises again, and someone wants to buy your bitcoin for $4000. Now your order goes through and is filled at $4000.

Maker orders are placed in books, or in some cases, “off-the-books” at the current ask or bid (the price where offers and bids are currently located) and only executed when a taker places an order at the same price, making them filled partially.

Makers are also known as “book traders,” while takers are “market makers.” Taker orders let you profit from market movements, while makers’ orders act as a safety net if there are adverse moves in the market.

3. Partial Orders: Coinbase Pro allows you to place stop-loss and limit partially filled orders if they don’t execute immediately.

When you sell bitcoin on Coinbase pro, the difference between the amount of bitcoin sold and your USD amount is minus the fees charged.

As a result, the “taker” side is evaluated for the first section. The rest of the orders will be filled as “maker” orders.

These are all of the Coinbase fees charged on any transaction type. Remember that you wouldn’t necessarily pay these fees in full in the case of a sale. You may pay part of them and get credit for the rest, which you can use towards other purchases or withdraw to your bank account.

Then, go to Coinbase.com and click the “Send” button to the corresponding USD wallet.

When Are Coinbase Wallet Fees Lowest?

Coinbase charges transaction fees when you buy or sell digital currency using your linked bank account, debit card, or credit card. Coinbase also charges a fee when you withdraw funds to your linked bank account. 

However, Coinbase has the lowest fees when using a U.S. bank account or Coinbase wallet; they charge a 1.49 %, unlike other Debit cards that charge a fee of 3.99%

Some exchanges use a taker fee structure, where the exchange charges more if you take liquidity from the market than if you provide it. However, Coinbase doesn’t take liquidity and is unable to offer such deals.

Therefore, if your transaction is an exchange transaction (i.e., not a withdrawal), the fees are based either on taker-maker methodology or market-based maker fees.

How Much Are Coinbase and Coinbase Pro Fees?

Coinbase Pro trading fees are generally very low and depend on the asset being traded, whereas many of its scaling solutions are free. Coinbase pro charges 0% on both takers and markers fees.

For example, Coinbase charges a fee from 0.10 percent to 0.25 percent for moving money between Coinbase accounts or sending money to a friend’s Coinbase wallet. It applies regardless of the amount transferred, although Coinbase Pro does charge lower fees for smaller amounts.

Coinbase also has some scaling solutions that are free. Users can send and receive money for as little as 0.01 percent, although transferring between Coinbase accounts generally costs around 0.5 percent.

The highest fee you will pay is 3.49% when moving money within a Coinbase account and 1.49% to withdraw funds to your linked bank account or Coinbase Wallet.

Coinbase Pro offers the same transaction fees it charges on the website, but the “fees” are significantly lower.

Are Coinbase Fees Worth It?

For individuals with merely a passing interest in cryptocurrencies or beginners, the cost is justified for the convenience of trading in fiat currency and using a user-friendly interface. Coinbase is the most preferred way; however, it is not worth it with the high transactional fee since Coinbase pro offers lower rates. 

Additionally, Coinbase Pro offers advanced trading tools and high liquidity, letting you trade bitcoins on margin, take advantage of 24/7 trading on a wide range of order books, and buy or sell bitcoin almost instantly with a credit card or bank transfer.

Are Coinbase Fees Tax Deductible?

Coinbase calculates your trading commissions in dollars for financial advisors and brokers when you place an order. However, the actual fee is labeled in bitcoin. When someone pays you with a dollar bond, Coinbase will convert that payment into bitcoin for tax purposes. It is one of the reasons why Coinbase also charges lower transaction fees on trades than other exchanges.

Therefore, Taxes on Coinbase fees are deductible. Whether you bought or sold bitcoins on Coinbase or exchanged them for another coin or fiat currency makes no difference. Everything is tax-deductible.

How to Claim Your Deductible Fees?

If you have trading transactions on your Coinbase account and you want to deduct fees from your taxes, follow the steps below;

  • Step 1: Log in to your Coinbase account on your computer or mobile device.
  • Step 2: On the left-hand corner, click “Account Settings.”
  • Step 3: Click on the “Fees” tab. You can also use the drop-down menu under “Fees.”
  • Step 4: On the left side of the page, click “Deduct Fees Form W-2.
  • Step 5: You can choose the financial year you want to deduct your trading fees.
  • Step 6: Enter the relevant details, such as your name, address, and tax identification number.
  • Step 7: Click “Next.”
  • Step 8: Input information about all transactions that incorporate trading fees from this financial year.
  • Step 9: Before you submit the form, click on “View Report” to check the details of your deductions.

Why Are Coinbase Fees So High?

Coinbase charges a 1% margin for cryptocurrency transactions and purchases, resulting in excessive costs.

Therefore Coinbase has a high fee since they only have 1% in profit from advertising, and there 8 % taxes on their wallets.

In addition to the high fees, Coinbase charges higher transaction fees to withdraw funds through a bank account than they do when withdrawing funds through a credit card. However, users can choose Coinbase pro, as they have lower fees and access to advanced trading tools 7 days a week, 24/7.

How can I reduce My Coinbase Fees?

To minimize withdrawal fees, back in the years, you traders sent their funds to their Coinbase USD wallet to Coinbase; however, this was banned a few years ago. Therefore you will be charged a transaction fee if you use Coinbase or Coinbase Pro.

I propose choosing a speedy and low fee currency to decrease your fees during your withdrawal. However, keep taxes in mind while trading cryptocurrencies to get them out of your Coinbase wallet. Please note market swings and think about retaining your cryptocurrency for a longer period.

To reduce Coinbase Fees using Coinbase pro, follow the steps below;

  • Step 1. Sign in to Coinbase Pro with your Coinbase credentials.
  • Step 2. Under the wallet balance column, select “deposit.”
  • Step 3. Select the currency you want to send (USD, BTC, etc.).
  • Step 4. Choose Coinbase.com from the drop-down menu.

You’ll be able to see the balance in your Coinbase wallet for the coin you selected at this point. Transactions on both platforms are free and quick, and deposits for digital assets are unlimited.

  • Step 5. Click the “Deposit to Coinbase” button.

You’ll see a screen that says “Confirm,” You’ll see another screen with an address to send your deposit to.

  • Step 6. Copy that address and send your BTC or other stored currency on Coinbase Pro directly to the corresponding Coinbase account for USD or any supported digital currency.

Do Coinbase Fees Change?

Coinbase and Coinbase Pro fees do not change. Coinbase is free to use, but it charges high fees because of its liquidity. Coinbase pro provides higher liquidity and advanced features and allows you to trade bitcoin with a free account.

In general, fees are subject to change all the time. They depend primarily on how much the network is congested at any time, which can be difficult to predict. The price may also factor in determining the final fee amount, depending on who your transaction involves, i.e., the person sending the funds will have a higher say over the final fee than someone sending to another Coinbase user.

Are They Going Up Anytime Soon?

No, Coinbase and Coinbase Pro are not going to change their fees soon. Coinbase does not want to be unable to process a transaction because of a fee. The fees will probably go up when the market becomes more volatile, low-fee coins become more popular, and Coinbase Pro becomes a reputable exchange with an extended platform. Until that point, it is best to use Coinbase.

Wrapping Up

Coinbase charges a 1% fee on cryptocurrency transactions and purchases. The transaction fees do not apply to users paying with a bank account or credit card. Transaction fees vary as per the product you’re using and may be higher in some cases, but they will never be more than your original cost of purchasing the coin if you were buying it for free.

Premium Features: Coinbase Pro offers advanced trading tools, such as tight spreads, charts and analytics, and flexible order types that optimize your experience. However, Coinbase .com remains the best place to start a free account. Feel free to contact customer support via phone or email, or visit the support center to learn more about our products and services.

References

  1. https://www.gobankingrates.com/investing/crypto/coinbase-fees/
  2. https://www.gobankingrates.com/investing/crypto/coinbase-fees/
  3. https://www.atimeforcash.net/coinbase-fees/#:~:text=Withdrawals%20(Complete%20Guide)-,Are%20Coinbase%20Fees%20Tax%20Deductible%3F,’re%20all%20tax%2Ddeductible.
  4. https://www.nerdwallet.com/reviews/investing/brokers/coinbase#:~:text=Coinbase%20charges%20a%20spread%20of,purchased%20and%20the%20payment%20type.