How to avoid Coinbase trading fees! Coinbase Pro tutorial
NOTE: Coinbase Pro was formerly known as GDAX. The professional trader focused platform went through a re-brand in mid-2018.
Coinbase is perhaps the most popular cryptocurrency exchange. As of September 2018, Coinbase serves the United States, the United Kingdom, Canada, Europe, Australia, and Singapore (limitations may vary country-by-country), and lets you buy and sell Bitcoin, Ethereum, and Litecoin.
Because of its popularity, many people start trading on Coinbase but quickly get frustrated with its high fees. For a detailed article on their fee structure, click on this link.
However, we have a secret for you…there is a way to buy coins from Coinbase for zero fees! You read that right: ZERO fees! Yes, if you want to learn how to purchase Bitcoin or how to buy Ethereum for no fees, then keep reading.
Using Coinbase Pro
At a high-level, the way this works is that you first deposit USD using an ACH bank transfer, and THEN utilize their trading exchange called Coinbase Pro to place a “market-maker” order. Confused? Keep reading, we will walk you through it.
If you buy coins straight from Coinbase, whether it is with your bank account, credit card, or funds in USD wallet, they charge a fee for every purchase and sale. However, you can choose to deposit USD into your Coinbase account using a standard ACH transfer, though it sometimes takes a few business days so you will have to plan in advance of when you want to buy.
After the funds arrive in your account, you can transfer it from Coinbase to Coinbase Pro or log into Coinbase Pro and transfer the funds from your Coinbase USD wallet to your Coinbase Pro USD wallet – doing so from either site works. Because Coinbase Pro is owned by Coinbase, you can use the exact same username, password, and Two Factor Authentication codes (if you have 2FA enabled) to login to Coinbase Pro as your Coinbase account.
How to Purchase Coins in Coinbase Pro
Now that you have your USD balance available on Coinbase Pro, you can make that Bitcoin investment or buy another coin of your choice. From the drop-down menu, you can choose BTC/USD, ETH/USD, or LTC/USD, depending on which coin you want to purchase. Now go down to the box where you enter your order and click on the “Limit” tab, and follow these guidelines for filling out your purchase order:
- In the Amount area, enter the amount of the coin you would like to buy.
- For Price, enter the price per coin that you would like for your purchase to execute.
For example, if you wanted 0.5 ETH at $300 per coin, you would put 0.5 in the first field and 300 in the second field. With those parameters, your order would execute at $150 total (0.5*$300).
Under the “Execution” field, make sure the “Post Only” box is selected. This ensures that your entire order will fill as a maker order, meaning that you are setting the price of the trade, rather than “taking” whatever the next offered price is posted for trade.
Why Doesn’t Coinbase Pro Charge Fees?
Coinbase Pro incentivizes these market maker orders by letting them execute without any fees. Because they are limit orders, you may have to wait a while for your order to complete, depending on the price you set and when, if ever, the market price reaches your level. Tip: the closer the LIMIT price you entered is to the current price of the coin, the higher the chance it will be quickly executed. If you wanted the coins immediately, you would need to put in a market order instead and would have to pay the “market taker” fees.
The same process works for sell orders. If you have any of those 3 coins and want to sell it without paying fees, you set a limit order with Post Only checked.
And there you have it: a pain-free way to avoid fees on Coinbase!
Once you are done with your transaction, you can transfer your coins around, put them in a vault, trade them again, or do anything that your heart desires!
- For $10 bonus when you deposit your first $100: https://www.coinbase.com/join/5925a6f5f35ce600bcd082d2
- For more on market vs limit orders: https://www.investopedia.com/ask/answers/100314/whats-difference-between-market-order-and-limit-order.asp
- For more on the market maker vs taker model: http://www.marketswiki.com/wiki/Maker-taker
This article was written to the best of our knowledge with the information available to us. We do not guarantee that every bit of information is completely accurate or up-to-date. Please use this information as a complement to your own research. Nothing we write in any of our articles is intended as investment advice nor as an endorsement to buy/sell/hold anything. Cryptocurrency investments are inherently risky so you should never invest more than you can afford to lose.