Use This “Secret Method” to Avoid Paying Coinbase Fees
You can see here that one of the options for a BTC deposit is “Coinbase BTC Wallet”. So you can simply type in the amount of Bitcoin you’d like to move from Coinbase to Coinbase Pro, and select “Deposit BTC.” The transfer between the two is instant and free.
And then, when you want to withdraw your BTC (maybe to a wallet like Exodus or an exchange like Binance), you will pay no fee whatsoever. Even if you are an absolute beginner this is super easy to do. And who doesn’t like saving money when it’s that easy?
In my last article we explored in depth the different purchase fees you pay when you’re buying Bitcoin on Coinbase. If you want to acquire some Bitcoin instantly this is hard to avoid. But if you are a more patient investor, we say that using a bank transfer rather than a debit card can potentially save you a lot of money on Coinbase’s purchase fees.
But it gets even better on Coinbase Pro. Since Coinbase Pro is not a broker, but rather an exchange, there is no fee for using your USD to buy BTC.
Or at least, not entirely. What Coinbase Pro does charge is an trading fee, for anyone using their exchange:
The maker-taker model might be new to you if you haven’t done much trading before. One way to imagine it is like a physical marketplace. All of these people selling are shouting out their offers, “Bitcoin! Bitcoin here! Only $6200!”
If you choose to accept one of their offers, you are a taker. If instead you decide to make your own offer, you are a maker. In order to make your own offer, you will have to choose a buying price that is below the current lowest selling price, in what’s called a limit order. In this case, you will pay zero fee.
If you decide to accept someone else’s offer, you can simply place a market order (and you’ll automatically be matched to the current lowest price). In this case, however, you will pay the trading fee of 0.10 to 0.30%, which is still far below Coinbase’s purchase fees.
The conversion fee is, in my opinion, the sneakiest fee that Coinbase charges.
When you use Coinbase as your broker to purchase Bitcoin, they charge you a purchase fee. That’s all above water — they show you exactly how much the fee will be before you pay.
They also show you what exchange rate you will be purchasing Bitcoin at. Most people probably don’t question this number, assuming that they are charging the current rate.
That’s not true.
As you can see in the fine print above, Coinbase adds a spread of between 0 and 200 basis points (i.e. up to 2%) to the exchange rate.
So, as an example, if you wanted to use your bank account to buy $1000 of Bitcoin on Coinbase, you might see that you’re paying around 1.5% in fees and decide that’s acceptable. However, it’s possible that your real fee is as high as 3.5%! That’s an extra $20 going into Coinbase’s pocket, in addition to the $15 you already knew you were paying.
If you decide to use Coinbase Pro to purchase Bitcoin, the procedure is pretty simple. Like before, you’ll go to the My Wallets page, and in the bottom left select Deposit. You’ll select which currency (probably USD in this case) and which method (if you have USD in your Coinbase wallet you can transfer it here; otherwise you’ll likely use the Bank Account transfer).
In a few days the transfer will arrive in your Coinbase Pro account and be ready to trade!
The trading page looks like this:
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