What is Coinbase?

Coinbase is a publicly traded American company most known for its eponymous cryptocurrency exchange that allows users to buy, sell, trade, stake, and store various cryptocurrencies.

Founded in San Francisco in 2012 by Fred Ehrsam and Brian Armstrong, who is currently the company’s CEO, Coinbase sought to broaden participation in the cryptocurrency market by offering a simple and intuitive platform for new users to buy and sell a selection of cryptocurrencies. Since its founding, Coinbase has expanded to become a household name in the crypto ecosystem and now hosts hundreds of assets to be exchanged by tens of millions of users in over 100 countries around the world.

Coinbase has less cryptocurrencies available for trading than other leading exchanges such as Binance, Kraken, or Bybit, but still features most of the world’s best known cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).

What services does Coinbase offer?

Coinbase offers several products and services, including:

• Coinbase Exchange: The primary platform for trading cryptocurrencies.
• Coinbase Advanced (formerly Coinbase Pro): A more advanced trading platform with lower fees and additional trading tools for experienced traders, such as charts and advanced order types.
• Coinbase Wallet: A mobile wallet that allows users to manage their private keys and store cryptocurrencies securely.
• Coinbase Card: A debit card that allows users to spend their cryptocurrency holdings like traditional currency.

As it is a centralized exchange, the storage of crypto assets on Coinbase’s main exchange bears with it certain custodial risks and privacy concerns, but there are also some advantages to holding crypto on centralized platforms, such as the ease of swapping tokens in a market with a high amount of liquidity, and customer support for more inexperienced users. Users who prioritize security and don’t seek to actively trade or exchange could instead look to use Coinbase’s Wallet, which is self-custodial.

What’s required for a Coinbase account?

To open a Coinbase account, you’ll need: 

• To be at least 18 years old
• Have a valid photo ID
• A passport, medical card or driver’s license
• A phone number connected to your smartphone
• The latest version of your internet browser

After signing up with Coinbase, the final step is connecting a payment method to your account, which varies from country to country.

What fees does Coinbase charge?

Coinbase does not charge fees for opening an account, storing crypto or cash on the account, or for sending crypto from one user’s primary balance to another. 

Coinbase does however charge fees for the purchase, sale, withdrawal or exchange of crypto. These fees vary depending on the payment method used, order size, market conditions, and jurisdictional location. Additionally, when using Coinbase’s main exchange, a spread is included to lock in the price while the transaction is being reviewed. 

On Coinbase Advanced, no spread is included as the user is interacting directly with the order book. Coinbase Advanced also features lower, more traditional exchange fees based on the amount of trading volume a user generated in the past 30 days and order type. 

Orders placed at market conditions on Coinbase Advanced that are immediately matched are considered “takers” and will pay a fee ranging from 0.05% to 0.60%, depending on the user’s previous 30 days of volume traded.

Orders placed in the books that are not immediately matched are considered “makers” and will pay a fee ranging from 0.00% to 0.40%, again depending on the user’s previous 30 days of volume traded. Since fees are also based on volume traded by the user, they are subject to change. 

How Coinbase has grown over the years

Since its establishment in 2012, Coinbase has achieved rapid growth along with the cryptocurrency industry and has become a major player in the sphere. Below are some major milestones in the history of the company:

• 2012: Founded by Brian Armstrong and Fred Ehrsam in San Francisco, California.
• 2013: Raised $5 million in Series A funding from Union Square Ventures.
• 2015: Launched GDAX (later rebranded as Coinbase Pro) for professional traders.
• 2017:
  • Reached 10 million users.
  • Raised $100 million in Series D funding, valuing the company at $1.6 billion.
• 2018: Launched Coinbase Custody for institutional investors.
• 2019: Launched the Coinbase Card in Europe.
• 2021: Went public via a direct listing on the NASDAQ under the ticker symbol COIN.
• 2022: Launched Coinbase Pay for easier account funding.

Data from Coinbase’s company filings show clear growth in monthly transacting users, starting from 2.7 million in Q1 2018 up to 8 million in Q1 2024, with the apex reached during the previous market cycle peak at 11.4 million in Q4 2021.

Coinbase’s revenue follows a similar pattern, with $66.11 million reported in Q1 2019, a $2.5 billion high reached during the previous market cycle peak, and $1.64 billion reported in Q4 2024.

Since Q3 2023, these metrics have continued to rise in tandem with Bitcoin's price rising. Unsurprisingly, Coinbase’s stock price has also risen significantly from its lows.

Coinbase's regulatory battles

Coinbase’s prominent place in the cryptocurrency world has also caught the eye of US regulators. 

The US Securities and Exchange Commission (SEC) submitted a Wells notice to Coinbase over alleged securities law violations, and sued Coinbase in June 2023, claiming that the company had been effectively working as an unregistered broker, exchange and clearing house without registering. 

Coinbase in turn sued the SEC and asked the regulator to provide clearer regulations for cryptocurrencies. Coinbase’s Chief Legal Officer Paul Grewal claimed that “We received no ‘thorough explanation’ of the evidence of what assets supposedly gave rise to securities transactions.  We weren't told what assets were at issue at all,” Grewal added. “Why would the government not follow its "typical" process in our case, and what does that say about its claims?”

The SEC has in turn rejected Coinbase’s petition to develop a new regulatory system for crypto, arguing that the current law is sufficient for pursuing the case. The dispute remains ongoing.