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How to use Coinbase exchange? Step by step guide
When the Coinbase trading network made its exchange debut in April, share prices increased immensely. The reason: Investors fought for shares in the crypto heavyweight and gave the company a big advantage on the stock exchange. But what exactly does Coinbase do? We have put together the most important things you should know about the US company for you. The US Company Coinbase Is Not New. The company has been offering its customers the purchase of cryptocurrencies such as Ethereum or Ripple since 2012. The business method: Even beginners can easily buy and manage cryptocurrencies with an account with Coinbase. Coinbase earns from it in two ways: On the one hand, the provider charges fees for transactions such as buying and selling; on the other hand, it earns from the so-called “spread”, the difference between the purchase price and the sales price. The Network Handles Large Amounts Of Cryptocurrencies For Companies. Since the crypto trading network lives primarily from the highest possible trading (it retains a comparatively high value with an average of 0.5 % of the traded one), business with companies is, particularly in focus. Because: Accounts can also be opened with Coinbase on behalf of companies. And what's more, with Coinbase, companies can not only invest in cryptocurrencies but also accept them as payments for trading. Companies can also use the provider to raise capital. How to use Coinbase exchange? Step by step guide
How to use the Coinbase exchange? Video and pictorial narration
One of the most famous customers is the Tesla company. The American car manufacturer had already bought cryptocurrencies worth 1.5 billion at the end of 2020 and processed the purchase on Coinbase.
Trading In Cryptocurrencies Is Subject To Severe Fluctuations
Even if some experts believe that the valuation of Coinbase could go even higher: The network like all providers in the crypto world is subject to strong fluctuations. This is because the company's sales are strongly linked to the rate of cryptocurrencies - above all the volatile rates of Litecoin and Ethereum for example.
Investors already felt a few years ago how quickly losses can occur. When the cryptocurrencies crashed that year, the Bitcoin price alone collapsed by over 70 %.
The Regulations
The background is checked with employees of the network. The hard drives they use must be encrypted and use strong passwords. Every device and every service is protected with a code and 2FA method. There is the Coinbase Bug Bounty service. In this, developers are rewarded for finding vulnerabilities on the page and reporting them to the company.
Coinbase is clearly regulated in many countries. It is also one of the most famous marketplaces in Europe. The number of competitors is increasing and is putting the platform under pressure. The competitive pressure in the sector is increasing. Smaller competitors in particular are increasingly vying for customer favor. Your means of choice: lower fees. PayPal is also on the advance - the online payment program has now also started trading cryptocurrencies. At the same time, several programs are trying to improve regulation - Coinbase is one of three trading networks for cryptocurrencies that have applied for a license in Europe.
Users Log In To Coinbase And Open An Account
This requires verification with a valid ID. Once successfully registered, investors can trade cryptocurrencies. The current profile value is always visible and can also be called up with the application at any time. Coinbase trades in cryptocurrencies and is therefore exposed to strong fluctuations. The prices of Litecoin, Bitcoin, and other cryptocurrencies are volatile and investors can lose money at any time. The value of the company is also strongly linked to the trading and price development of cryptocurrencies. The network charges fees for transactions such as buying and selling. The provider also earns from the so-called “spread”, that is, from the difference between the purchase price and the sales price.
Coinbase Is Great For Beginners and Advanced
The big advantage of Coinbase is that it is not as complicated as other crypto exchanges. Coinbase understood that trading cryptocurrencies must be made as easy and simple as possible to enable beginners to get started, but also to keep advanced users on the network.
Let's take a step-by-step look at the registration and setup at Coinbase so that you can start without open questions and are well equipped for trading cryptocurrencies at Coinbase.
Very important: You have to state the reference code as the purpose of the transfer when making the transfer, otherwise the money cannot be assigned to your wallet. Once this is done, you will receive an email. One to two working days later that the money has been paid in successfully. From now on you can trade with the offered cryptocurrencies. You now have the choice between the cryptocurrencies offered by Coinbase. In addition, you select your dollar account for the payment system.
Depending on the verification, you can also pay by card, but we advise against it, as it will provoke high fees. If it is not urgent, you should wait for your transfer. Now all that's missing is the amount you want to invest. You enter it in the dollar field at the bottom left. Coinbase will then immediately calculate how many pieces of your desired currency you will receive. In contrast to stock trading, it is also possible to trade in fragments here. So you can also buy fragments of a currency.
You can then confirm the purchase and the currency will be credited to your profile. You will find a separate account for each currency under the wallet option.
Send and Receive Crypto Currencies
Of course, you can also send and receive cryptocurrencies with Coinbase. This is useful if you want to transfer your cryptocurrencies to a hardware wallet, send them to friends or use them to pay. You can do this by clicking on Send / Receive in the category above. There you select the correct currency and enter a recipient location. This is a chain of digits and letters that you will find out from the recipient in the same way: He does not have to click on "Send", but on "Receive". You will need this string for shipping.
If you want to receive cryptocurrencies, you have to send this string to your counterpart or show him the QR number, which he can scan into himself. In any case, before starting the transaction, it should match all digits again so that no errors occur here.
Coinbase Makes Crypto Currencies Trading Easy
It can be that easy to buy, sell, send and receive cryptocurrencies like Bitcoin, Litecoin and over 50 others. The great advantage of Coinbase is the simple and user-friendly system that other crypto exchanges and trading venues do not offer. The entire registration at the crypto exchange only takes a few minutes. Then you are ready for your first purchase. If you register with this link, you will receive a bonus of almost 10 dollars in Bitcoin from Coinbase after your first purchase of at least 85 dollars.
In addition, there is a learning network from the crypto exchange with Coinbase, with which you can earn more than 250 dollars in cryptocurrencies in a few seconds if you answer a few simple questions about the crypto stock exchange.
What Are The Fees For Trading On Coinbase?
The fees for trading on Coinbase are currently 1.50 % of the invested sum. But only if the investment is over 200 dollars. Coinbase flat fees apply up to this mark. So if you invest $ 1,000 in a cryptocurrency, for example, you pay 15 dollars fees for trading on Coinbase. These are offset against the amount invested so that the buyer has invested almost 1000 dollars in the cryptocurrency.
Then there is the spread. At Coinbase, this is 0.5 %. In trading, the term spread describes the difference between the buying and selling price of an asset. It should be noted here that the value depends on the fluctuations in the market and can therefore not be given across the board.
If you buy cryptocurrencies on Coinbase with the immediate purchase or by card, the fees increase. In this case, 4 % of the traded amount will be charged as fees. This would mean a fee of $ 40 for an investment of more than $ 1000. Here, too, the fees are offset against the amount invested. There is also a fee for withdrawals from the Coinbase profile. This is currently 0.20 dollars per payout from the Coinbase account to another one.
As mentioned above, the amount of the Coinbase fee also differs in terms of the amount of the invested amount. Coinbase charges a fee in addition to the spread. This corresponds to a flat fee or a variable percentage fee and is determined on the basis of the location, the product feature and the kind of payment.
Valuation Of The Company At 100 Billion Dollars
The development of Coinbase in the past few months has been characterized by very strong growth. Coinbase can look forward to a great first quarter. The profit margin should move here between 750 and 800 million dollars. Coinbase published these preliminary figures in early Spring. Here, sales of around $ 2 billion were nine times higher than in the previous year. This means that Coinbase made more sales in the first quarter of 2021 than in the entire previous year.
Investors Always Focus On Profitability
At the time of the IPO, however, many start-ups cannot guarantee this, but it is very different at Coinbase. It has been shown that many experts as well as small investors store their investments on a large scale at Coinbase and do not keep them in wallets. After all, Coinbase stored 10% of all cryptocurrencies with a value of $ 225 billion in the first quarter. The timing is optimal because in the past few weeks the two largest cryptocurrencies have reached new highs.
In addition, experts estimate the chances for Coinbase shares to be very good to be included in the important listed funds, i.e. in the ETFs. This would give the share an additional boost. There are analysts who believe that Coinbase's exchange value could double to 200 billion. Coinbase shares traded at an average of $ 350 apiece in the private areas in the first quarter. Coinbase was traded at a reference price of $ 250 on the innovation exchange Nasdaq. Coinbase would therefore have a valuation of around $ 70 billion.
Respectability
Coinbase is licensed by the US and meanwhile also European authorities: The FinCEN is responsible for the regulation of the licensed financial provider Coinbase. In the summer of 2021, BaFin granted Coinbase an official one for the custody and trading of cryptocurrencies. The long existence of the company, the high number of users, and well-known investors such as Twitter also speak for the seriousness.
To increase security for its users, Coinbase uses 2FA. This means that in addition to the password, a second access requirement can be stored using a TAN. Users can decide for themselves whether a cell phone number should be stored to which a password is sent that is limited in time. There is also the offer of an authentication application on another device. This offers a high level of protection, as access to the Coinbase profile is linked to two end devices. This is particularly advantageous if you lose your smartphone, as it prevents unauthorized access. In addition, a security key can be created that can be stored on a storage device. Access to the account is only possible with this unique key.
All of these opportunities increase security for Coinbase users and hardly offer third parties a chance to access their own accounts. The company page uses AES-256 to protect users' banking data. Since information online is always more susceptible to cyberattacks than offline, Coinbase backs up almost 100 % of all digital values on offline storage. The crypto values that are online for daily trading are protected by insurance.
Coinbase Is Actually A Regular Broker
Although Coinbase is based in the USA, the crypto trading network is also a contact point for crypto fans in Europe. On it, users can buy around 50 different cyber currencies, including Bitcoin, Ethereum for fiat money as well as trade with one another.
Author: Emre Ata Author LinkedIn