Coinbase and GDAX (“Coinbase Pro”) – How to avoid withdrawal fees
Coinbase has large withdraws fees – however there is a neat tricks allows you to avoid withdraw fees.
Coinbase and Coinbase Pro (previously known as GDAX are two of the more popular platforms around the world where people can buy, sell, and trade cryptocurrencies. Coinbase and Coinbase Pro currently operates in the US, Europe, UK, Canada, Australia, and Singapore. Users can trade cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.
Two Sides of the Same Coin(base)
Coinbase and Coinbase Pro are actually two separate but related products. Coinbase was started first and aimed to provide a user friendly platform for people with no experience to get into crypto. With the growing interest and popularity in cryptocurrencies, the company expanded to create a Coinbase Exchange to allow for Bitcoin and cryptocurrency trading. Because this exchange was beyond the original scope for their more “casual” users, they decided to rebrand this Exchange as GDAX – Global Digital Asset Exchange.
Coinbase – a place for consumers to easily buy, sell, and store digital currency.
GDAX (formerly Coinbase Exchange) – an exchange for professionals to trade digital assets.
Use GDAX to Avoid withdrawal fees from Coinbase
Coinbase withdrawal fees can be very high. When users withdraw their coins from Coinbase directly, they will be charged a network transfer fee. However, since Coinbase and GDAX are owned by the same company, sending your funds from Coinbase to GDAX is instant and free.
Additionally, GDAX does not charge any fees to withdraw. You can send your crypto from GDAX to any other wallet without paying any network transfer fees from your own pocket.
- Transfer fiat onto Coinbase. Coinbase charges ~1.5% when buying or selling via bank transfer and ~4% when using credit cards or PayPal. Keep in mind that alternative payment methods will always have higher fees. Coinbase actually offers some of the lowest credit card buy/sell fees in the industry.
- Send fiat (ie USD) from your Coinbase account to your GDAX account. This is instant and does not cost anything.
- On GDAX you can buy your desired crypto (bitcoin, ethereum, and/or litecoin). Why one should buy on GDAX is because with their maker-taker model, you can buy with a limit order and you’ll incur zero trading fees.
- As an optional last step, once you have your coins you may take advantage of GDAX’s zero withdrawal fees and send it to any other address or exchange without network transfer fees. The other exchange may have more choices in terms of alt coins that GDAX doesn’t have.
Updated 2019 to reflect name change of GDAX to Coinbase Pro
The content here is not financial advice. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.