I probably should be embarrassed to be talking about Coinbase, since it’s basically the tricycle (with streamers) of the crypto trading world, but screw it, yeah, it’s one of my accounts. What should embarrass me more, however, are a couple of dumb, money-wasting things I’ve done. I’d like to at least share my “a-ha!” moments with you, since some of you probably have an account there and, God help you, may be as dumb as me and might commit the same sins. So here goes:
- Don’t take cash out unless you really want it out for good – – in other words, don’t make a withdrawal just because you don’t think you’ll be in a trade for a while. The reason? Because there’s a 2.5% charge whenever you make a deposit. So, for example, if you start off by sending a $10,000 deposit to Coinbase, you’re already going to lose $250 instantly for the privilege of doing so (this is one of those egregious fees that makes people cringe about Coinbase). Withdrawing money costs nothing. However, if you want to “re-load” for a trade later, you’re going to suffer the same fee again. So just leave it there! Once you’ve paid your pound of flesh, that should be enough.
- When you sell a coin, don’t sell it for cash (the default) but convert it into a dollar-like equivalent, like Tether. The reason? Commissions! From what I can tell, selling for cash involves a nasty commission (like $50 for a $3,000 trade, for instance) whereas “housing” the buying power in $USDT costs nothing.
In short, you want to avoid cash transactions like the plague, and just keep moving things from “lake to lake with a ladle” (as my former post described it) to keep those fees and commissions to a minimum.
This all assumes, of course, that there isn’t some cataclysmic event like Coinbase blowing up or Tether plunging in value, in which case having good old U.S. greenbacks tucked away safely in your bank account is infinitely preferable. But, barring those possibilities, if you intend to trade in the Coinbase environment, I’d like you to keep the above suggestions from me in mind.
UPDATE: Much of the above could be replaced by “Just use Coinbase Pro instead of Coinbase, as told to me by Slopers. I have done so now, so thank you!