Coinbase is an extremely popular online platform for obtaining and handling digital currency. Many people choose to use Coinbase but are taken back by the higher fees for using their services.
Coinbase may have higher fees, but they offer more than other digital currency sites. In this article, you will see a breakdown of why Coinbase may have higher fees than other services out there.
Why Are Coinbase Fees So High?
1. Buying Fees
The most common fee that you will find when using Coinbase is the buyer fee. Anytime you are buying something there will be a fee associated with it, digital money is no different.
The fee to buy digital money using Coinbase is a percentage of what you are buying. Typically, the higher amount of digital money you are buying means the higher the fees will cost you.
Fees that are associated with the purchase of digital money will be automatically deducted from the money you are buying. You will not be required to pay extra money upfront.
Some people get around these fees by trading money right out of their bank accounts. Check before buying or trading money to see how the rates differ from each other.
2. Selling Fees
Paying to sell money may seem strange if you are not familiar with the digital money works but it is quite common. Any time money is bought or sold there are fees to be expected.
Any selling fees will be taken out automatically so there will be no extra payments needed. If you are wondering what amount to expect from the fees when selling digital money, they are always listed.
Before submitting the sale of any digital money there will be a small breakdown of the amount you are selling along with any fees associated with that sale.
The fees to buy and sell are sometimes the same but can change over time. The more you buy or sell the higher your fees will always be to use Coinbase as a digital money service.
3. Marketing Costs
Fees associated with using Coinbase also are caused by Coinbase needing to market its brand. Ads cost a lot of money as does building websites. Creating a brand is not don’t overnight.
Companies spend thousands of dollars to market themselves to get more customers. Customers will eat the cost of marketing and the cost it takes to keep the company running.
The cost behind creating the software that allows Coinbase users to have one place for anything they need with digital currency takes a lot of money. The software needs to be able to keep up with users.
4. Mining Cost
The fees for Coinbase to get crypto are expensive. The cost for this has to be made up somehow which is why there are many fees associated with using Coinbase or buying any digital currency.
Mining crypto takes time and an advanced computer network which costs a lot of money. Coinbase figures out all of these costs and turns them into a flat fee for you.
Any service that allows you to buy or sell digital money requires a fee even if the part is waived. Mining requires a company to spend far more money than you may think so the lower fees are worth the cost.
5. Bank Fees
Depending on what bank you are using there may also be fees tacked on to the already higher fees. Coinbase works with a bank and a company out of London. When this happens there are additional fees.
Coinbase has no control over the fee, and it will only be up to your bank to change the fees paid. Many banks charge a three percent fee which will add up quickly. It is best to talk to your bank first.
Your bank may waive the fees associated with Coinbase if not you can shop around for different banks that will. This is an important fee to take into consideration when using Coinbase and a bank account.
6. Withdrawal Fees
Taking money out of your Coinbase accounts will be no different than buying or selling your digital currency. ATMs charge fees for using their services and Coinbase will be no different.
The fees will change based on the amount you are taken out, unlike an ATM that has flat rates. Some people will choose to withdraw their money by transferring it to a different account such as PayPal.
When PayPal is used it can transfer instantly while other banks may take a few days. The delivery date will visible before you hit confirm. You will be able to decide if those dates will work for you.
The keep transfers cost money no matter where you bank, anytime money is instant sent there are fees involved.
7. Transfer Fees
Coinbase allows you to transfer funds within several sites all in one place. You will be able to send digital money to anyone with their phone number or username.
There are fees associated with this cost but to be able to transfer digital money. Safely being able to transfer funds is worth the fees that come along with the process.
Receiving money from someone is not any different, you will pay fees. Coinbase makes a good amount of money on transfer fees as the buyer and seller will have fees taken out of their transfers.
To learn more, you can also read our posts on why your Venmo is not working, why people buy NFTs, and why stocks spike after hours.
When using Coinbase to handle your digital currency do not let their higher fees worry you. In some cases, you can work around Coinbase’s higher fees to make them more affordable.
Keep in mind that Coinbase may have higher rates but what they offer is more than worth the cost. Their site states they are a “One Stop Shop” for handling and spending any digital currency you have.