Coinbase is a platform for storing, buying, selling and paying for services in cryptocurrency. They offer a ‘one stop shop’, acting as a wallet and an exchange, plus providing a multitude of trading tools and resources.

So, with over 10 million customers and $6 billion worth of exchanged digital currency, let’s explore why day trading on Coinbase has become so popular.

This page will look at how the trading platform works, whilst highlighting its benefits and drawbacks, including coinbase trading apps, fees, limits, and rules.

Note! If you intend to trade cryptocurrency, you don’t necessarily want to own actual coins. It can be cheaper and more efficient to trade price movements using derivatives, where you can also leverage the results.

See our cryptocurrency day trading guide.

What Is Coinbase?

Coinbase is a global digital asset exchange company (GDAX).

Essentially, it’s a secure online platform, used for the buying, selling, and transferring of digital currencies. Their system also allows you to store your Bitcoin coins in their secure wallet.

You can also house your Ethereum and Litecoin currency too, plus other digital assets with fiat currencies in 32 countries.

If you want to start day trading cryptocurrencies, you require a platform to trade on, an intermediary to communicate with the blockchain network.

That’s what Coinbase can offer you, a quick and easy way to cut facilitate and trade your cryptocurrencies.

Why Use Coinbase?

So, if you’re interested in storing and trading digital currencies, Coinbase could be of significant service. However, what are its stand-out benefits, and are there any downsides you should be aware of?

Benefits

Cuts Through Noise

Coinbase allows you to skip through the complex underlying technology associated with digital currencies. You don’t need an in-depth understanding of blockchain technology, or to hold a long-term view as to the success of currencies like Bitcoin.

The Coinbase trading platform offers a straightforward way for you to capitalise on the volatility in the cryptocurrency market. Volatility which saw Bitcoin increase five-fold in the first nine months of 2017.

Margin Trading

You can also benefit from Coinbase margin trading (Though not if you are in the UK). This enables you to borrow money from your broker to make more trades. It’s best to think of it as a short-term loan.

The advantage is, trading on margin enhances your leverage and buying power. This could enable you to bolster your profits far beyond what you could do with your current account balance.

If you see a big move on the horizon, you can truly profit from it.

On top of that, Coinbase fees have been cut on margin trading. This means you won’t pay any interest or additional costs at this time.

The downside is, you will need a minimum of $5,000,000 invested on a discretionary basis to qualify for a margin account.

Promising Change For Traders

Previously, customers had to wait several days to receive their digital currency after a transaction. Now you can purchase bitcoin and other currencies directly from your bank account. What does this mean? It enables you to trade in real-time with GDAX.

Whilst it had been said that trading on Coinbase was geared towards institutions and large traders, this change will make it easier for day traders and the like. The popularity of this change was quickly apparent. The price of Litecoin jumped over 12% in the afternoon of the announcement, followed by a surge in Coinbase day trading.

Powerful Trading Platform

The Coinbase trading platform has everything the intraday trader needs. It offers a sophisticated and easy to navigate platform.

The platform comes with log books, advanced charting capabilities, and a straightforward ordering process. It also collects trade history and allows for backtesting.

Since you’ll be spending the majority of your day on the platform, finding a system as comprehensive as Coinbase is of great advantage.

Apps

The mobile Coinbase app comes with glowing customer reviews. It offers quick and easy charting, plus fast execution speeds.

You no longer have to miss an important price move because you’re stuck on a train, or halfway through cooking dinner.

Their app is available on both Apple and Android devices.

Download the Coinbase App from their website.

Security

You also get reassuring security with Coinbase. 98% of digital assets will be secured in offline storage. Coinbase promises customers “sensitive data that would normally reside on our servers is disconnected entirely from the internet.” That data is encrypted and transferred to USB drives, as well as paper backups, which are then stored in deposit vaults across the world.

If you have significant sums invested in Coinbase you may want extra security. That’s where Coinbase vault comes in. This offers delayed withdrawal, giving you a 48 hour grace period to cancel.

In addition, you can have multiple approvers, ensuring trading capital can’t be accessed as a result of a brief lapse in judgement.

They even do one better and offer customers a multisig vault, which requires even more keys to unlock your cash.

Insurance

You also benefit from strong insurance protection. Because Coinbase holds all fiat currency in a USD wallet, it is covered by FDIC insurance. Cover extends to $250,000.

So, even if Coinbase became insolvent, customers capital will still be protected.