How to Sell Crypto on Coinbase
Coinbase is one of the most well-known centralized crypto exchanges in the world.
If you're just starting out with cryptocurrencies and trying to learn as much as possible, it's a great place to start.
In today's post, we'll talk about this company, why it's good for new investors, how more experienced traders can use it, and how you can move funds to your bank or to defi.
Coinbase Overview
Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam. Ehrsam had formerly worked as a trader at Goldman Sachs. The company's mission is to create an open financial system for everyone in the world.
They are based in San Francisco, California. In May 2013, they launched the first product, called Coinbase Exchange. Coinbase Exchange is a digital asset exchange platform where users can buy and sell Bitcoin and other cryptocurrencies with US dollars and other fiat currencies.
In January 2015, Coinbase launched the first regulated Bitcoin exchange in the US, called Coinbase Consumer. Coinbase Consumer allows users to buy and sell Bitcoins with US dollars and other fiat currencies.
In November 2016, they launched a new product called Coinbase Prime, which is a professional trading platform for large institutional investors. By the end of 2021, they had more than 70 million total users, profits of over $2 billion, a company valuation of $65 billion, and more than 2,000 employees.
They are graduates of the Y Combinator program, founded by Twitch.tv alums who have helped launch many successful companies besides Coinbase, such as Instacart and Airbnb.
Who Should Use Coinbase?
While it's one of the most popular exchanges in all of CeFi, how does it compare to its competitors?
One key difference is that Coinbase allows users to buy and sell cryptocurrencies directly from their bank account, credit card, or PayPal account. This makes it much easier for new users to start, as they don't need to set up a separate cryptocurrency wallet.
Coinbase also offers a more intuitive interface than many other exchanges, making it perfect for new users without experience with tradfi brokerages like Robinhood or TDA. It also provides advanced features through Coinbase Pro, such as price alerts, lower fees, and an instant conversion function.
Overall, Coinbase is designed to be user-friendly and accessible, making it a good choice for those just getting started in the world of cryptocurrencies.
How to Fund a Coinbase Account
To get money into your account, there are a few different options. One option is to link a bank account to the Coinbase account and then make a wire transfer or ACH transfer from the bank account to the crypto account.
Another option is to link a credit or debit card to the Coinbase account and then make a purchase using the credit or debit card. Finally, transferring funds from another cryptocurrency exchange into the Coinbase account is also possible.
Whichever method you choose, getting money into your Coinbase account is easy and straightforward. However, it's important to remember that they are a centralized, publicly traded company. You will have to perform KYC, and on top of that, "not your keys, not your crypto" applies. If the business was to fail, you could potentially lose everything.
Buying and Selling Crypto on the Platform
In the past, buying cryptocurrency has been a complex and confusing process. However, Coinbase has made it easy for anyone to get started with Bitcoin, Ethereum, and dozens of other tokens.
Here's a quick guide on how to buy crypto on the platform:
Create an account on Coinbase.com. Once you have verified your email address and phone number, you can link your bank account, debit card, or credit card. Once your payment method is set up, you're ready to buy crypto.
If you're on the phone app, click on the middle button and click "Buy". The desktop app is a little easier to navigate. A large blue button says "Buy/Sell"; all you need to do is click on it.
Enter the amount of currency you want to purchase and select “Buy”. Your crypto will be delivered to your account instantly. On the preview screen, pay attention to the "Coinbase fee". If you want to buy $100 of Bitcoin or Eth, they will take a cut.
There is also an option to swap for other tokens. So if you're holding a bunch of USDC and BTC takes a dive, you can swap the stablecoin for Bitcoin and not be charged the extra fee.
Note that you can also set up recurring purchases to automatically buy crypto on a set schedule.
This is a great way to dollar-cost average into your position and build up your portfolio over time. However, you’ll be hit with their fees every time you do this unless you sign up for Coinbase Pro.
How to Send Funds from Coinbase to MetaMask
Sending funds from Coinbase to MetaMask is a straightforward process. First, open your Coinbase account and select the "Send/Receive" tab. Next, enter the amount of crypto you wish to send in the "To" field and paste your MetaMask wallet address into the "To" field. Finally, click "Continue" to complete the transaction.
It’s a good idea to make a test transaction before sending your full amount, just to make sure everything happens smoothly. You also want to make sure you have Ethereum Mainnet selected on your MetaMask wallet.
Why would anyone want to do this? Well, getting funds from your bank to defi isn't always easy. You need to "on-ramp" money to a centralized exchange, or directly on your ledger, to move to a defi hot wallet like MetaMask.
How to Use Coinbase for Off-Ramping
You'll take some profits at some point, provided you have some to take. You'll most likely, at least depending on the country you live in, need to use a centralized exchange to get this cash to your bank account. Coinbase is perfect for this task.
First, you'll need to sell your crypto and "Deposit to cash". Doing this action will not convert to USDC the stablecoin, but to actual US dollars. And of course, there's a fee you'll have to pay to do so on the platform.
Click on the "Portfolio" tab and click on US Dollar. Now click the "Withdraw" button, enter the amount you want to off-ramp, and hit continue. Choose an account that's connected to Coinbase, as you can connect more than one, and follow the directions.
The time it takes for funds to hit your bank account depends more on your bank than on Coinbase. It can be anywhere from one business day to five or even more.
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The Bottom Line
Coinbase is one of the most popular ways to buy, sell, and hold cryptocurrency. The platform is easy to use and perfect for those looking to invest in crypto for the first time. Coinbase also allows users to off-ramp their crypto back into fiat currency, making it a great option for those looking to take profits or cash out of their position.
While Coinbase is a great platform, it's important to remember that it is a centralized exchange.
This means that you are not in control of your private keys and that your funds are not as secure as they would be if you were holding them in a software or hardware wallet.
It's great for beginners and works well for ramping funds, but there are better options for hardcore traders and people who prefer more decentralized platforms.
Citations
Coinbase - Coinbase.com
Buy Bitcoin Worldwide - Coinbase statistics