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eToro vs. Coinbase

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Both eToro and Coinbase are cryptocurrency exchanges that let investors buy and sell Bitcoin and other popular crypto coins and store them securely in built-in digital wallets. 

eToro is a popular online social trading platform founded in 2007 that lets investors participate in copy trading by copying the portfolios of successful investors. The company launched its cryptocurrency platform in 2017 and it became available to U.S. customers in 2018, giving users the ability to invest in Bitcoin as well as other popular cryptocurrencies.

Coinbase was founded in 2012 as a cryptocurrency exchange that lets users directly buy, sell, and trade crypto. It has grown into one of the largest exchanges by volume and went public in April 2021 via a direct listing, using the symbol COIN. The platform offers simple onboarding and access to over 225 cryptocurrencies for trading.

eToro and Coinbase serve different purposes in the crypto marketplace. While eToro lets users buy and sell cryptocurrency as part of their investment strategy, Coinbase is a true crypto exchange, allowing you to purchase, trade, exchange, and withdraw your cryptocurrency. Similarly, eToro acts as a custodian for the crypto they sell. Coinbase also acts as a custodian of your private keys if you only store coins on the exchange. However, they also offer a digital wallet that allows you to control your private keys.

We’ve reviewed both platforms based on their supported currencies, security, fees, features, and more to help you decide which platform is best for your crypto investing style.

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.

eToro does allow users to withdraw their crypto into their eToro wallet, but this wallet cannot be used on any decentralized exchanges. Crypto must be transferred to an external wallet for additional functionality.

eToro


eToro

 eToro

For a limited time, you can earn a bonus of $10 when you deposit at least $100 in your eToro account. This promotion is in select U.S. states. Terms & conditions apply.

This review promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd.), UK (eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in some EU countries and the UK, no EU or UK consumer protections & not supervised by the EU or UK regulatory framework. Investments are subject to market risk, including the loss of principal

What We Like
  • Copy trading portfolios

  • Simple mobile app

  • Margin trading (not available to U.S. residents)

What We Don't Like
  • Withdrawing crypto requires multiple steps

  • Can’t deposit, trade, or exchange crypto

Coinbase


Coinbase

Coinbase

What We Like
  • Allows deposits, trading, or withdrawing of crypto

  • Supports 225+ currencies

  • Free educational videos

What We Don't Like
  • Exchange fees for trading are on the high side

  • $2 minimum order

eToro vs. Coinbase: At a Glance

  eToro Coinbase
Features Access to copy trading portfolios; available in over 140 countries; simple-to-use mobile app Simple-to-use mobile app; buy, sell, and trade crypto; store crypto in Coinbase Wallet
Fees 1% flat fee for buying and selling crypto; no commissions or fees for deposits; $5 withdrawal fee (learn more at eToro fees) For trading maker-taker fees are as high as 0.60%. Other fees such as for purchasing with cards are not disclosed online, but will be displayed at transaction time
Cryptocurrencies supported 75+ cryptocurrencies 225+ cryptocurrencies
Security features 2FA via SMS only; cold storage of trading platform crypto assets; USD balances FDIC insured up to $250K; KYC requirements for access; biometric access 2FA via SMS or Google Authenticator app; cold storage and multi-signature wallets; USD balances FDIC insured up to $250K; KYC and anti-money laundering protections
Types of transactions Trading crypto - buy and sell with various order types Buy, Sell, Exchange, Send, Receive

eToro vs. Coinbase: Ease of Use

While eToro makes it easy to sign up with an email, username, and password, the platform is not the most user-friendly for brand new crypto investors. Between multiple trade options and its own assets, eToro can feel overwhelming to beginners. 

Users who sign up for eToro will be required to prove their identity by submitting a picture of a photo ID and proof of address, which can be as simple as a screenshot of a utility bill. You can then add a payment method (bank account or credit/debit card) and start buying and selling crypto.

Coinbase has a similar easy sign-up process and requires users to verify their identity with a photo ID. The user experience overall on Coinbase is much simpler than eToro, however, making it easy and intuitive to buy, sell, or trade currencies.

Crypto purchases on deposited funds may not be available for withdrawal until the deposited funds have cleared. This may take up to 5-7 business days on either platform.

eToro vs. Coinbase: Security

eToro and Coinbase take security very seriously and adhere to country and local regulations closely. Here are a few of the security features available on each exchange:

eToro Security Features

Two-factor authentication: eToro allows users to enable two-factor authentication (2FA) via SMS.

Biometric access (mobile apps): eToro supports biometric verification via fingerprint scanning through its mobile app.

Cold storage: eToro states that cryptocurrency assets on the trading platform are stored in cold storage.

FDIC insurance (up to $250K): eToro protects all USD funds with FDIC insurance up to $250k. This does not insure your cryptocurrency holdings. 

Coinbase Security Features

Two-factor authentication: Coinbase takes authentication security a bit further than eToro by offering 2FA both via SMS or the Google Authenticator app.

FDIC insurance (up to $250K): Similar to eToro, Coinbase also offers FDIC insurance on USD deposits up to $250,000.

Cold storage and crypto vaults: Coinbase stores 98% of all their crypto assets offline in cold-storage vaults. This keeps assets off of the internet and away from hackers and online thieves.

Built-in ERC-20 wallet: Coinbase lets users transfer funds from the exchange into their personal custody using an ERC-20 compatible wallet for Ethereum-based applications as well as decentralized exchanges.

eToro vs. Coinbase: Features

eToro and Coinbase allow the buying and selling of crypto assets, but each platform goes about it in its own way. Here are a few of the unique features offered by each platform:

eToro Unique Features

CFD trading: eToro offers Contract for Difference (CFD) assets allowing users to purchase the contract to hold or invest in a cryptocurrency without actually owning the asset itself. Margin trading is also available when buying and selling CFDs to give you more leverage in your trades.

Note: Margin trading is not available to U.S. residents and neither are CFDs which are universally banned in the U.S.

Copy trading: Because it’s a social investing platform, eToro lets users select top-performing portfolios and copy the trades from that portfolio automatically.

No fees for deposits: eToro does not charge fees when users deposit funds into their account, whether by debit card, credit card, or bank account transfer.

Coinbase Unique Features

Use your crypto: While eToro lets users withdraw crypto using the platform’s proprietary wallet, the wallet can’t be used on blockchain applications and exchanges. Coinbase’s ERC-20 compatible wallet, however, can be used on any Ethereum-built application or decentralized exchange. 

Directly exchange crypto: Coinbase makes it easy to exchange one cryptocurrency for another directly on its platform so users can save on fees when selling one crypto to buy another.

Access educational videos: Coinbase hosts educational videos on many of the currencies they support, helping beginners learn more about the currency. The platform even gives bonus cryptocurrency rewards after you take a quick test to show what you’ve learned.

eToro vs. Coinbase: Currencies

eToro supports over 75 different cryptocurrencies, including Bitcoin, Ethereum, and XRP. In comparison, Coinbase supports over 225 cryptocurrencies and often adds more. Both platforms also allow users to purchase fractions of cryptocurrency in dollar amounts, with eToro setting a $10 minimum trade size and Coinbase a $2 minimum order amount. 

eToro vs. Coinbase: Fees

eToro charges a fee for the “spread” when purchasing cryptocurrency which varies by the type of crypto being purchased. There is a flat fee of 1%.

Coinbase charges maker-taker exchange fees as high as 0.60%. They also charge other fees when buying crypto, but do not share them. They will be displayed at the time of transaction. Both platforms charge much higher fees than most other crypto exchanges.

eToro vs. Coinbase: Access

Coinbase is available globally in just over 100 countries around the world and in every U.S. state except Hawaii. eToro is available in 140 countries globally. In the U.S., it is open to residents of 46 states with Hawaii, Nevada, New York, and Minnesota being excluded.

Each country has its own regulations around cryptocurrency. Be sure to review your local guidelines before buying or selling crypto.

Final Verdict

eToro and Coinbase are designed to help users invest in cryptocurrency, but while eToro gives users exposure to crypto assets, Coinbase is a true crypto exchange that lets you actually own your crypto. 

eToro is designed for investors who simply want exposure to crypto as an asset class or for speculative purchases. By contrast, Coinbase is designed to give users simple access to a wide range of cryptocurrencies, educate them about blockchain, and giving them ownership of their crypto assets.

No matter which platform you choose, investing in cryptocurrencies is highly speculative. Never invest more than you are willing to lose.

What Are eToro and Coinbase?

eToro and Coinbase are regulated cryptocurrency exchanges that allow customers to buy, sell, and trade crypto

eToro is a global trading platform that also allows users to trade stocks, foreign currencies, and over 75 different cryptocurrencies while Coinbase is a true exchange that only sells crypto. Coinbase also gives users access to more than 225 cryptocurrencies, as well as the ability to trade or withdraw assets to a digital wallet.

How Do Coinbase and eToro Work?

eToro is an online broker that allows you to purchase or sell crypto assets, acting as a custodian of the cryptocurrency until you sell or withdraw your assets to your wallet.

Coinbase is a cryptocurrency exchange that allows users to buy, sell, trade, or withdraw cryptocurrency. It also acts as a custodian of the currency until users withdraw, trade, or sell their crypto.

To buy cryptocurrency like Bitcoin on either platform, simply connect your bank account or payment card, select how much Bitcoin you want to buy (in USD amounts), and then make the purchase. Both eToro and Coinbase store that asset in cold storage until you want to sell, trade, or withdraw crypto into your digital wallet.

Should I Use the Coinbase Wallet?

Both eToro and Coinbase offer a digital wallet for storing your crypto assets. And while each lets users transfer their crypto assets into a digital wallet, Coinbase’s wallet connects to Ethereum-based applications and decentralized exchanges for more versatility. Coinbase also lets you set a 12-word recovery phrase, acting as a private security key to their assets. eToro does not let users hold their own wallet keys.

Who Should Use eToro vs. Coinbase?

eToro is best for investors who want exposure to cryptocurrency but don’t care to have access to the actual currency itself. It’s also best for traders who want to be able to trade stocks and crypto within one platform.

eToro offers crypto trading in more than 140 countries and 46 U.S. states and territories but traditional stock trading is only available to non-U.S. residents.

Coinbase is best for beginner crypto investors who want access to a wider range of cryptocurrencies and use those currencies on the Ethereum network or on other decentralized exchanges. Coinbase also gives new investors access to free educational content, an easy-to-use app, and top-notch security.

How We Evaluated eToro vs. Coinbase

When reviewing eToro vs. Coinbase we compared each platform based on ease of use, fee structure, security, unique features, and supported currencies. We also took into account the types of trades available on each platform and their relative cost to the wider cryptocurrency exchange market.

Both platforms charge high fees but offer a good user experience. While eToro offers more functionality outside of the cryptocurrency market, Coinbase is a more feature-rich platform for crypto beginners. eToro is also more suited for investors outside of the U.S. who want access to their margin trading and other capabilities while Coinbase is best for beginner crypto investors who want to own their coins and wallet keys.

Both platforms are fairly limited in their trading capabilities, so advanced crypto traders would be better suited by another exchange option.

Woman hanging from green currency symbol balloons


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