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BlockFi vs. Coinbase

Coinbase is the better cryptocurrency platform for beginners

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While BlockFi and Coinbase offer some of the same services, the platforms have different business models. BlockFi’s main feature is to provide “crypto banking” while Coinbase primarily functions as a crypto exchange.

Founded in 2017, BlockFi provides a way for people to use their crypto as collateral for a loan, earn interest, and earn rewards with their Bitcoin rewards credit card. The platform lets users earn interest on their crypto as high as 7.5% APY and buy and sell cryptocurrency without trading fees. 

Coinbase is the most popular U.S.-based crypto exchange. Founded in 2012, Coinbase originally only let users buy, sell, and hold Bitcoin. Today, the exchange supports dozens of different cryptocurrencies and also provides automatic staking services for some proof-of-stake coins like Cosmos and Tezos. Users can earn interest on stablecoins too, such as 2% with DAI or 0.15% with USDC.  

We reviewed each platform based on supported currencies, fees, features, security, and more to help you decide which might be right for you.

On Nov. 28, 2022, BlockFi filed for Chapter 11 bankruptcy after suspending withdrawals from the platform earlier in the month. BlockFi's bankruptcy filing is related to the collapse of FTX, a separate crypto exchange. FTX extended a line of credit to BlockFi in July 2022 during a liquidity crunch and is BlockFi's second-largest creditor. Therefore, this review is out of date.

Unlike traditional brokerage firms, cryptocurrency exchanges are not members of the Securities Investor Protection Corp. (SIPC). Therefore, unless user terms specify otherwise, investors with cryptocurrency assets commingled on a custodial cryptocurrency exchange could potentially lose their funds as unsecured creditors.

Investing in cryptocurrencies, Decentralized Finance (DeFi), and other Initial Coin Offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by The Balance or the writer to invest in cryptocurrencies nor can the accuracy or timeliness of the information be guaranteed.

BlockFi


BlockFi

BlockFi

Pros
  • Fee-free trading

  • Offers high rates of interest on crypto holdings

  • Users can take out a loan using crypto as collateral

Cons
  • Risks of crypto lending are unclear

  • No insurance on deposits

  • Limited number of currencies

Coinbase


Coinbase

Coinbase

Pros
  • Deposits are insured against potential loss

  • Support for many different cryptocurrencies

  • Automatic staking for some proof-of-stake coins

Cons
  • Higher trading fees

  • Lack of customer support via phone call

  • Higher interest rate on crypto-backed loans

BlockFi vs. Coinbase: At a Glance

  BlockFi Coinbase 
Fees 0 Variable
Currencies  30+ 150+
Security  95% of funds in cold storage, no insurance  98% of funds in cold storage, fiat currency is FDIC insured 
Wallet  Hot wallets  Hot wallets and cold multi-signature wallets 
Transactions Supported  Buy, sell  Buy, sell, conversions 
Mobile App  iOS and Android  iOS and Android 

BlockFi vs. Coinbase: Ease of Use

Coinbase is built for new users. Getting started and placing trades is made as simple as possible. To buy crypto, for example, a user simply selects the “buy/sell” option, chooses a cryptocurrency from a dropdown menu, enters the amount they want to buy, then confirms the transaction. This might be a lot easier for beginners than some other exchanges that show their order books, which can look confusing.

When using a desktop or laptop, users can log in to the web-based version of the platform through Coinbase.com. On mobile, users can access their account through the Coinbase app. Signing up for an account on BlockFi is also quick and easy.

One potential upside for BlockFi is its customer support. Even if users run into difficulties, they can either live chat with a helper bot, submit email support tickets, or talk on the phone with an agent during weekdays. Coinbase has phone support, but it has been poorly received. In addition, the platform has been known to crash during times of market volatility.

BlockFi vs. Coinbase: Security

Coinbase has a reputation for being not only the longest-running and largest exchange but also one of the few that has never been hacked. The company claims to keep 98% of crypto funds held in cold storage, with only 2% being kept online. Cash deposits are also FDIC insured up to $250,000. All other assets held online are privately insured by Coinbase.

BlockFi also holds the majority of its crypto assets in cold storage, with 95% of crypto being held in cold wallets. The remaining 5% is held in hot wallets insured by Aron. It seems safe to assume that their assets are also secure, although Coinbase is clearly the leader in this area. It’s also important to note that BlockFi deposits are not protected by FDIC or other insurance.

BlockFi vs. Coinbase: Features

Coinbase also offers Coinbase Pro, an additional platform full of features for advanced users. While Coinbase makes buying and selling cryptocurrencies easy for anyone, Coinbase Pro is a platform designed for those who trade currencies often, offering advanced charting and other features for traders.

While both BlockFi and Coinbase offer crypto-backed dollar loans, BlockFi is clearly the leader in this area. BlockFi users can secure a loan and pay an interest rate as low as 4.5%. Rates for Coinbase loans are typically 8%.

Coinbase also requires users to deposit Bitcoin as collateral for a loan. No other currency is accepted. With BlockFi, users can take out loans using BTC, ETH, or the USDC or GUSD stablecoins. 

Below is a quick breakdown of the interest rate users can expect when taking out a crypto-backed loan with BlockFi. Note, the loan-to-value (LTV) ratio refers to the ratio of the value of the loan in comparison to the value of the crypto used as collateral. A 50% LTV loan would involve taking a loan worth 50% of the crypto deposit in dollar terms. 

For example, with $5,000 worth of crypto, a user could take out a loan of $2,500 at a rate of 9.75%. Or, with that same $5,000, they could take out a $1,000 loan, and their interest rate would only be 4.5%.

LTV Interest Rate  Origination Fee 
50% 9.75% 2%
35%  7.9%  2% 
20%  4.5%  2%

BlockFi vs. Coinbase: Currencies

When it comes to the broadest selection of currencies, Coinbase wins hands down. This is somewhat to be expected considering Coinbase is generally thought of as a place to trade or store assets while BlockFi is generally thought of as a place to borrow, lend, or deposit assets for yield.  

Coinbase offers 150+ different cryptocurrencies while BlockFi offers six plus a few stablecoins. Users can trade fractions of any coin on either platform (you don’t have to buy an entire Bitcoin, for example).

Currency supported Coinbase  BlockFi 
BTC Yes Yes
ETH  Yes  Yes 
LTC  Yes  Yes
LINK  Yes  Yes 
PAX  Yes  Yes 
PAXG  Yes  Yes
USDC  Yes  Yes 
ATOM, XTZ, BAT, and about 140 other cryptocurrencies  Yes  No

BlockFi vs. Coinbase: Fees

The fees for BlockFi vs Coinbase are quite different. Here is a quick summary of Coinbase’s fees. Note that the Coinbase fee schedule detailed below is for U.S. users. Fees may vary depending on location.

  Coinbase BlockFi 
Debit card purchases 3.99% N/A
Crypto conversion  2% spread margin  N/A 
Crypto purchases/sales  $0.99–$2.99 or 1.49% (whichever is greater)  Free
Staking services  25% of rewards  N/A 
ACH transfer deposit  Free  N/A 
PayPal deposit  2.5%  N/A 
Wire transfer deposit  $10  N/A 

BlockFi only lists fees for withdrawing deposits from the platform. Because they don’t offer staking services and don’t accept deposits of fiat currency, many of the fees listed for Coinbase do not apply. Here are BlockFi’s withdrawal fees:

Currency Withdrawal Limit  Fees 
BTC 100 BTC per 7-day period 0.00075 BTC
ETH  5,000 ETH per 7-day period  0.02 ETH 
LINK  65,000 LINK per 7-day period 0.95 LINK
LTC  10,000 LTC per 7-day period  0.0025 LTC 
Stablecoins  1,000,000 per 7-day period  $10.00 
PAXG  500 PAXG per 7-day period  0.015 PAXG 

BlockFi gives users one free withdrawal per month and with only one currency. There are also no minimum balances required to earn interest. Accounts are subject to a withdrawal minimum of 0.003 BTC and 0.056 ETH. Trying to withdraw amounts smaller than that could take up to 30 days to process.

When it comes to frequent buying and selling of BTC, LTC, ETH, LINK, or PAXG, there’s no question that users might prefer BlockFi with its total lack of trading fees.

BlockFi vs. Coinbase: Mobile App

Both BlockFi and Coinbase offer a mobile app for their platforms, but Coinbase is the clear winner. 

The Coinbase app has excellent reviews on third party sites, and consistently remains one of the most downloaded finance apps. Some things users like include ease of use and a simple design. Some things users complain about include high fees, lack of charts/graphs, and potentially having transactions placed on a 24-hour or longer hold as a fraud prevention measure.

BlockFi app has not generally been as popular, though it still retains decent metrics. Users like that the app is secure and simple, but others complain that the app doesn't work, fails to verify identities, automatically signs users out, and lacks support.

BlockFi vs. Coinbase: Access

BlockFi is accessible anywhere in the world except for residents of New York state: 

Coinbase is accessible in more than 100 countries around the world including the U.S., Canada, Mexico, and much of Europe.

Final Verdict

Coinbase and BlockFi are very different platforms intended to serve different types of users. It can be hard to pick one over the other because much of the selection will depend on individual goals and preferences.

That said, most newer users are likely to find Coinbase to be the better option, unless they are specifically searching for crypto-backed loans or to earn interest on crypto.

Those involved in frequent trading might prefer BlockFi since there are no fees. Then again, these same users might also prefer Coinbase due to a much broader selection of currencies. 

Frequently Asked Questions

What Are BlockFi and Coinbase?

BlockFi is a crypto lending or crypto banking platform. Users can deposit crypto and earn interest, or they can take out a fiat currency loan using their crypto as collateral. Coinbase is a cryptocurrency exchange, allowing users to buy, sell, and trade cryptocurrency.

How Do BlockFi and Coinbase Work?

BlockFi and Coinbase require users to first create an account, verify their identity, and then make a deposit. From there, users can use the platform as it suits their needs. For Coinbase, this might include buying and selling different cryptocurrencies and earning staking rewards for holding certain proof-of-stake coins. For BlockFi, this might include taking out a loan or doing nothing but earning interest on deposits. 

Who Should Use BlockFi vs. Coinbase?

Those who want to earn interest on their crypto or take out a loan using their crypto as collateral might want to consider BlockFi. On the other hand, those looking to trade a variety of cryptocurrencies might want to consider using Coinbase. Beginners may also prefer Coinbase for its ease of use. 

Does BlockFi Work With Coinbase?

Using BlockFi and Coinbase together is definitely a possibility. Users could choose to do the bulk of their trading on Coinbase while depositing a portion of their crypto at BlockFi to earn interest on it. This is just one example of how users could potentially take advantage of the features of both platforms. 

Methodology

To review BlockFi vs. Coinbase, we compared each platform based on currencies offered, security, fees, and features.

While Coinbase is a crypto exchange that also has the option for users to take out crypto-backed loans, BlockFi is a crypto lending platform that also has the option to trade crypto. Accordingly, Coinbase could be a better choice for those only looking to buy, sell, or hold crypto. Those looking for crypto-backed lending or to earn interest on their crypto, however, might find BlockFi to be more appealing.

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