BlockFi vs Coinbase: Tips for Picking the Right Crypto Option for You

If you’re anything like me, then you might have watched Bitcoin appear in 2009 without giving it much thought. It seemed like an interesting fad for the tech-inclined, but not a serious financial choice. It wasn’t until I saw cryptocurrency trading platforms popping up every other week that I decided to take this new trend seriously.

Modern cryptocurrency trading platforms are very similar to what you may already use if you are familiar with trading stocks or options. They are designed in a way that experienced traders will feel comfortable making investments. A single platform will give traders the ability to buy and sell a variety of cryptocurrencies in real-time as the markets fluctuate.

There are some strong benefits to trading cryptocurrency using a modern trading platform.

  • Improved Liquidity – By sourcing trades from multiple sources, a single trading platform provides this volatile market with much-needed liquidity.
  • Unlimited Market Hours – Interesting in making trades at 3 in the morning? Cryptocurrency does not rely on a centralized market and thus has no market hours.
  • Crypto Diversification – Using popular trading platforms makes it much easier to diversify your crypto investments. Putting all of your eggs into one basket is never a smart move.

The benefits of using a trading platform are clear, but which platform should you be using? Two of the best on the rise today are BlockFi and Coinbase. Both are excellent trading platforms that bring unique features to the table.

Choosing the platform that is right for you may be entirely a matter of preference.

Feature Compare: What BlockFi and Coinbase Bring To The Table

1. BlockFi Key Features and Benefits

an overview of how BlockFi works

BlockFi first hit the markets in 2017. It intended to imitate the services of banks with a focus on cryptocurrency. They quickly began offering loans against cryptocurrency collateral and eventually evolved into a full-fledged trading platform. The company stated that their clients held more than $53 million in cryptocurrency in 2019. That number continues to grow as they attract more eager traders on a consistent basis.

Here are some of the most notable features of this platform:

  • BlockFi Trading Account

This is the main feature that attracts cryptocurrency traders from around the globe. BlockFi stands out from competitors by not offering any native crypto tokens of their own. It’s a trading system that is clearly developed by experts who understand the market and what traders need to get a competitive advantage.

One of the many advantages of trading with BlockFi is that the company is physically based in the United States. This means their company and its practices must adhere with US laws designed to protect customers. In general, it means that there is an extra layer of security and confidence involved with every trade.

  • BlockFi Interest Account

A BlockFi Interest Account(BIA) is a great way to increase your savings while diversifying your crypto wallet. Coins deposited into a BIA will earn interest in a cryptocurrency of your choice. You can add some diversification to your wallet by choosing to gain interest in a coin different than the savings balance.

New investors can wire USD into the account and have it immediately converted to an appropriate cryptocurrency. It’s a great way to begin your journey into cryptocurrencies without incurring significant risk.

  • BlockFi Bitcoin Visa Credit Card

This isn’t a credit card that relies entirely on cryptocurrency. Instead, it is a rewards credit card with an alternative cash-back structure. In this case, the cash-back reward is bitcoin instead of standard currency. The advantage is that the rewards rate is significantly higher than many competitors. And it gives you a chance to continue building your crypto-wallet without putting much effort into it.

The standard card will ship with a 1.5 percent reward rate on eligible purchases. You’re also eligible for an additional Bitcoin bonus worth $250 if you spend at least $3000 within the first 90 days of activating the card. One notable disadvantage of the BlockFi Bitcoin Rewards card is the steep annual fee of $200.

2. Coinbase Key Features and Benefits

some of Coinbase's best features

Founded in 2012, Coinbase already has several years’ worth of experience under its belt. They have been involved in cryptocurrency for nearly as long as we’ve had bitcoin. If you feel more comfortable investing with a long-standing company that has a strong reputation, then you may prefer the security that Coinbase has to offer. Here are some of the biggest services and features they have to offer.

  • A Strong Selection Of Virtual Currencies

As of early 2021, there are more than 4,000 different cryptocurrencies in circulation. On one hand, it’s great to have such a diverse selection of investment opportunities. However, having 4,000 different options can easily overwhelm new traders. Coinbase is designed entirely around the “ease of use” mindset, which is why they limited trading options to only a select group of currencies.

Coinbase lets clients trade between 32 different cryptocurrencies with a standard account and adds an additional 4 with a Coinbase Pro account. These 32 currencies are the options that are most likely to stick around for the years to come. Customers on Coinbase actually face less risk because they are exposed to few volatile currencies.

RELATED READING: Coinbase vs Coinbase Pro

  • Top Tier Security

Security and insurance are always major concerns when finances are involved. The increased level of security is one of the many reasons so many new investors are flocking to cryptocurrency. And the level of protection that Coinbase offers makes them one of the best in the business. They are one of the few trading platforms that personally insures all investments.

Unlike traditional investments, the FDIC or SIPC do not protect exchanges of cryptocurrency. But that hasn’t stopped Coinbase from implementing their own security measures. Only a small fraction of customer funds are stored online with the remainder secured in an offline location. The company also claims that their insurance policy would pay to cover any funds clients lose due to a security breach.

  • The Shift Card

The card offered by Coinbase is very different than what BlockFi provides. Instead of a traditional credit card with a Bitcoin rewards system, this is a debit card that pulls funding from an existing Bitcoin balance. It is only usable in certain states, but in general, works just as any standard Visa card would.

This is one of the few reliable cards on the market that lets you convert your cryptocurrency to usable funds in real-time. But, unlike the Coinbase card, your spending amount is limited by your crypto-wallet.

App and Website Overview

These are digital currencies we are talking about trading which obviously implies a certain amount of time spent online. Both of these trading platforms provide clients with a website as well as an app that they can use to make their trades and manage their accounts. The apps make it easy to buy and sell cryptocurrencies no matter where you are at as long as you have an internet connection.

  • The BlockFi App

Similar to the website itself, the BlockFi app is a relatively new addition to the market. The goal of the app is to provide clients with access to all of the major services they might normally use on the website. This includes transferring funds, managing a BIA, and taking out loans against cryptocurrency holdings.

The young age of the app prevents it from including all of the features of a full-fledged trading platform like Coinbase, For example, they have yet to integrate the trading feature. Developers claim that this feature and others will be included with future updates. The app is still a great tool to use for borrowing, moving, or saving money.

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  • The Coinbase App

The app from Coinbase has been out for a while and this has given them a lot of time to refine the platform. This is obvious immediately when you open the app. It has a smooth, simple design that is easy to navigate from the very beginning. And the best news is that you’ll immediately have access to your favorite Coinbase features. This includes buying and selling any of the available cryptocurrencies.

One of the main advantages of the Coinbase app is the level of security provided to traders. Coinbase takes its security very seriously whether it’s on the app or through their website. They are also far less intrusive than many competitive apps. Coinbase collects very little data related to the user and works hard to protect the privacy of that data.

Overall, both of these apps are a must-have if you are using the respective trading platform. The Coinbase app is more refined and offers more features. However, the BlockFi app was only released late in 2020 and has several updates planned in the near future. It would not be surprising if the app was every bit of capable as the Coinbase alternative within the following months.

Fees and Costs: Is BlockFi or Coinbase Cheaper To Use?

When it comes to investing and trading we’re all worried about the bottom line. A series of lucrative trades is hardly worth celebrating if the broker eats up all of your earnings in fees. Both BlockFi and Coinbase offer fairly competitive pricing structures with minimal fees. Here is a look at what you can expect to pay using either of these options.

  • BlockFi Fees

The various services provided by BlockFi come with independent fees and pricing structures. Those fees can vary depending on which cryptocurrency is being used. For example, a BIA that uses Bitcoin is subject to an 0.0025 BTC fee for every withdrawal excluding one free withdrawal each month. That fee can be translated to 0.0015 ETH, 0.0025 LTC, or $0.25 USD depending on which currency is used.

There is also an annual $200 USD fee attached to the BlockFi Bitcoin Rewards card. This fee does seem a bit high, but if you use your card on a regular basis then the rewards you earn can easily surpass this fee within the year.

See full list of BlockFi fees at their website.

  • Coinbase Fees

Coinbase provides certain features free to many clients. Most notably is their free cryptocurrency and USD wallet. This free service lets you store your USD balance and your existing cryptocurrency balance on their servers. There is no charge for using the wallet or transferring funds from one Coinbase wallet to another.

Fees begin appearing when making trades on outside networks. Coinbase is charged a fee for these transactions and that fee is passed down to the client. For every trade, Coinbase may include a margin fee known as the “spread” and a flat fee based on the transaction amount. The exact amount of the fee can vary according to your location, cryptocurrency being traded, and available payment method.

In comparison to other trading platforms, the fees required on either of these sites are minimal. But which site is cheaper all depends on how you spend your money. If you’re doing more trading, then fewer trading fees found on BlockFi will help soften the impact on your wallet. But if you’re interested in a cryptocurrency-based credit card with a manageable annual fee, then Coinbase is a safer choice.

Summary: Final Tips for Picking The Right Crypto Platform for You

Both of these platforms are great choices for new traders and experienced investors alike. But which of the two is right for you? Here are a few final reminders to help guide your choice.

You Should Pick BlockFi if:

  1. You want to accumulate a long-term cryptocurrency saving.
  2. You want cryptocurrency rewards on every credit card purchase.
  3. You want to support an up and coming trading platform with a lot of innovative features.
  4. You want access to a cryptocurrency savings account anywhere you go via a smartphone app.

You Should Pick CoinBase if:

  1. You’re more interested in trading cryptocurrency with your smartphone app.
  2. Security and investment insurance are your top priorities.
  3. You don’t mind paying higher fees to trade with a more experienced company.
  4. You’re interested in a debit card that relies entirely on a cryptocurrency balance.

We know that no matter who you choose you’re going to enjoy your new experience with cryptocurrency.