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Coinbase VS. Circle – Tried Both with $500 Here’s What I Found

IMPORTANT: As of December 7th 2016 Circle no longer allows the option of buying or selling Bitcoins through their services. They are now referring all of their customers to Coinbase.

Probably the biggest competition in the Bitcoin marketplace today lies within Bitcoin exchanges, the most dominant being Coinbase and Circle.
Today I’ve decide to test out these 2 exchanges head to head and see how much value for money I can get using $500. But I didn’t test only the fees and exchange rate, I also tried to figure which website makes the process easier.

Coinbase charges fees, Circle Doesn’t – Is that so….

The most noticeable difference between Coinbase and Circle are the transaction fees. Circle states:

 “You shouldn’t have to pay fees to use your own money. We don’t charge fees when you convert funds to or from bitcoin with a linked bank account, when you store your bitcoin, or for bitcoin transactions”

Indeed when you buy Bitcoins with Circle you won’t pay a fee but it seems that circle $500 don’t come up as $500 worth of Bitcoins. This is due to several reasons:

  • There is a credit card processing fee that is applied when buying your Bitcoins with a credit card through Circle. From what I’ve seen this adds up to 2.9% which is not exactly negligible.
  •  It seems that Circle doesn’t guarantee the exchange rate at the time of placing the order (unlike Coinbase). This can cause a difference in how much you pay (initially found this issue on Reddit).

Coinbase on the other hand charges a fixed 1% transaction fee no matter what payment method you use and a $ 0.15 fee for ACH deposits. These fees are pretty low compared to other alternatives out there that allow you to buy Bitcoins.

Circle has the easiest buying process I’ve seen to date

Until today I’ve bought Bitcoins through almost 10 different exchanges. I don’t think I’ve ever encountered a website that’s so intuitive as Circle’s. The simple design and sleek animation make it appealing and easy to use for even non tech savvy users.

But the real “magic moment” comes from the ability to purchase Bitcoin with a credit card within 2 minutes of setting up an account. Most websites require some sort of initial verification and until today the process of buying Bitcoins with a credit card was pretty complex.  It takes about 2 minutes to complete the process with Circle and I’m willing to pay extra for that.

Coinbase has also done a great job on their website but the process is a bit lengthy and can wear you out. The main issue being the fact that you need to verify your back account and sometimes this can take a day or two.

Coinbase has something fishy going on..

Since 99Bitcoins deals with a lot of people who buy their first Bitcoin I’ve noticed something strange going on lately. On several occasions I’ve gotten emails from people claiming they placed an order on Coinbase and it got canceled claiming that their account is in “high risk”. Oddly enough all of these cancelation happened when the price of Bitcoin went up drastically.

Here’s an example of such a case which caused a delay of purchase for the user. One user was so angry that he went out and made a website called Coinbase Fraud, this websites shows real live examples of Coinbase cancelling orders when it benefits them due to changes in the price of Bitcoin.

I can’t say I’ve experienced such issues with Coinbase myself but it seems to me that I’ve heard about these kinds of stories so many times that there’s probably some truth in it.

Both mobile apps work great, support is also fine

Both Circle’s and Coinbase’s mobile app are pretty intuitive and easy to use. Having said that Circle does a much better job at creating an enjoyable experience (just like their website). At times when I needed support from Coinbase and Circle they both seemed to have responded in a timely manner and got my questions answered.

If you buy $500 worth of Bitcoin here’s what you’ll get

If you spend $500 with Coinbase at today’s exchange rate you’d get 1.3103BTC (all fees included). If you go with Circle you’d receive 1.2782BTC. This may seem that Circle is much more expensive than Coinbase, but it important to note that I’ve measured Coinbase’s ACH payment method with Circle’s credit card method (since I don’t have an American credit card which Coinbase accepts).

This mean that with Coinbase you’ll get the coin 2-4 days after you’ve made the purchase and with Circle you’ll get it instantly – so I guess you should figure out if 0.0321BTC is worth waiting 2 days (~roughly $11 at today’s exchange rate).

Circle is the winner by a nose in my book

After all is said and done, I prefer Circle to Coinbase. Their sleek design, ease of use and lightning fast transaction delivery creates a real “magic moment” for me. I also don’t mind paying more fees for this outstanding experience. If you’re all about saving as much as possible than Coinbase is probably the way to go, but if you want to avoid the hassle choose Circle.

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42 comments on “Coinbase VS. Circle – Tried Both with $500 Here’s What I Found”

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  1. full bitcoin for $500. Please correct the amount of bitcoin you get. You do not get over 100% of a bitcoin for $500, if so ill take 10 please oh wait that would be over $63,000 not $6,300.

    1. Hi Jeff,

      Well, this article was written some years ago when Bitcoin’s price was below $500. We can’t manually update our articles every time the Bitcoin price changes. The key point is what percentage of the transaction which fees take.

  2. ACH from my bank via Coinbase was done on 10/14 and today is 10/21. So much for them stating it takes 2 to 4 days, and this wasn’t the first ACH I’ve done through CB. Yes, I emailed them and received their canned response. Their excuse will probably be we’ve been busy or inundated with transactions. I cannot recommend them, and your experience may vary.

  3. I have real problems with identification on exchanges. If you live in a country other than where your bank is based, it can be really difficult to use coinbase and other exchanges that require identification. If the countries of your bank and mobile provider don’t match then they will deny you. What can you do?

    1. Alexander Reed

      That’s an interesting question I didn’t know that was an issue. Did you try contacting Coinbase’s support about this?

  4. Let’s face it: Circle raised millions last year then all the sudden drops it’s bitcoin customers—> In a 12/7/2016 email that was about promo offers before getting to the serious announcement of this unexpected decision? I can’t seem to cash out and a snarky support staff member is giving me all kinds of ridiculous excuses because the money is already gone. Guessing we BTC Circle users contributed to their million dollar fundraising.

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