Is the Coinbase One subscription for $0 transaction fees worth the money?
Dollar-cost averaging is now viable via Coinbase as they scrap transaction fees in return for a monthly subscription fee. Coinbase One is still in beta but you may be able to get a free trial.
Coinbase One, the new subscription service from the US-based exchange, offers users $0 transaction fees, $1 million in account protection, and 24/7 customer support. Currently, the service users are reporting will cost $30/month is being rolled out to customers across the U.S. Information on how to sign up for a free trial is explained below.
Why offer a subscription model?
Given the high fees on the standard Coinbase app, this may be appealing for many users. Coinbase is an apparent first on-ramp to crypto for many people new to crypto. It is a name they have heard of, it is listed publically on the New York Stock Exchange, and the user interface is simple to understand.
Most beginners likely don’t want the complexity of something like Coinbase Pro, and they don’t like the risks they associate with non-US-based exchanges. I tested some transactions this morning, and to sell £10 worth of BTC on Coinbase will cost be £0.99 in fees. Suppose I want to buy £100 that increases to £2.99. What is even more outlandish to those experienced with exchanges is that this does not include the spread.
Coinbase charges a spread on top of the 3% fees. As a result, buying crypto in small amounts on the Coinbase app isn’t suitable for those wanting to dollar cost average into Bitcoin. This is where Coinbase One will come into its own.
Dollar-Cost average and $0 fees
I appreciate that Coinbase Pro and other exchanges offer much better rates, charts, and order types, but those features are for a specific type of investor. Mainly they are trading tools; those who want to invest in Bitcoin regularly don’t need these features. However, they do need a way to set recurring buys so they can dollar cost average over time. This feature is missing from most, if not all, centralized exchanges. Many apps that support regular buys charge high fees and offer a large spread.
Apps such as Coinbase, BlockFi, Ziglu, and Uphold allow these features and charge for each transaction. If you wanted to invest $10 per day into Bitcoin, that would cost you around $30 per month. If the price of Coinbase One does release around that price, you would be getting improved customer support and account protection essentially for free.
On the other hand, if you are trading crypto or making a few one-off transactions, then Coinbase Pro is likely a better solution if you want to stick with Coinbase.
The beta service that first appeared last November appears to be evolving throughout this testing phase. Initially, the guarantee focused simply on an “Account security guarantee.”
Keep your peace of mind knowing your account is protected from unauthorized access.
However, this has now consolidated into “$1M Account Protection,” with the “account protected” linked to a whole page on definitions and eligibility. According to internet archives, Coinbase made this change around March 13th as the service moved out of a “pilot launch” and into a complete beta.
The criteria to qualify for the protection are relatively lengthy and include having your Coinbase account “in good standarding” and having completed the photo I.D. verification. Further, if you have previously reported that your account had been compromised and Coinbase denied the request, you will no longer be eligible to claim again.
As expected, the protection also does not cover social engineering scams, so this will not protect users who are conned into sending crypto to fake companies. However, it also does not cover sending crypto to the wrong address, losses resulting from a security vulnerability on your device, any loss you do not “promptly” report to Coinbase or any crypto in your Coinbase wallet.
You will also not be covered if you use the Coinbase API to link to any third-party applications such as portfolio managers. That leaves me wondering what you are covered for? You are likely covered if Coinbase themselves are hacked, but if that happens, I wonder where they will get the funds to reimburse users.
Lastly, the reimbursement is based on “the U.S. Dollar value of the applicable Digital Currency as of the date and time Coinbase approves your reimbursement request.” This means that in the event of an Mt. Gox level hack that causes the price of Bitcoin to plummet, you will be given dollars in fiat for the cost of Bitcoin at a time decided by Coinbase, not by when you submit your request. On this basis, I cannot see where the value of this account protection lies.
Dedicated 24/7 customer support
This part of the offering claims that you will be able to “speak directly with a Coinbase One beta team member for help with any of your issues.” It is common practice for companies to create tiered support hidden behind paywalls, and I personally have no issue when it relates to business services.
However, for a retail application that allows you to trade crypto globally 24/7, I do think that it is reasonable to offer support around the clock. When U.S. companies only provide support 9-5 EST, it is challenging for European customers to get the help they need.
The default Coinbase support button offers you an automated chatbot that will guide you through users’ common issues. In my experience, if the bot cannot handle your issue, then you are asked to sign in, after which you are guided to a web form page. Upon landing on that page, you are greeted with a form and support telephone number. I tried the number and quickly got through to an actual operator named Sahil, who was extremely helpful and did his best to answer all my queries.
The experience is a little frustrating as you occasionally get sent in a loop when navigating the help pages, but all in all, it is to the level I would expect. My concern is that the live support is removed for non-subscription customers when Coinbase One comes out of beta.
So, is it worth the money?
If you want to dollar cost average into one of the significant cryptocurrencies, then Coinbase One may be a decent option. However, you will likely need to add over $300 per month and use daily transactions to see the value. In addition, the account protection and customer support don’t seem to have enormous value to me at present, given the eligibility criteria and alternative options.
Yet, as we’ve discovered, the service is still in development, so it will be interesting to see the format in which it eventually launches to all users.
Access to the Free Trial
If you want to try out Coinbase One, you can see if you are eligible by going to your Coinbase app, clicking on Settings, and then Join Free Trial. If this setting is not available to you, then you are not currently able to join the Coinbase One beta.
The free trial is a 30-day trial that will automatically opt you into a monthly paid subscription if you do not cancel. For more information, you can view Coinbase help.