A guide to Coinbase

Advertisement

Coinbase is one of the largest global platforms for trading cryptoassets. 

In partnership with Coinbase

Founded in 2012 in the United States, it provides a service where individuals and institutions can buy, sell and store a range of digital assets such as Bitcoin, Ethereum and many others. 

For many investors, Coinbase acts as a gateway into the world of cryptoassets, offering a user-friendly interface. In the UK is registered with and supervised by the Financial Conduct Authority (FCA).

Coinbase operates globally, including in the UK, and is a publicly listed company on the NASDAQ. Its public listing has brought a level of transparency and scrutiny that is less common among platforms in this sector.

How Coinbase works

Coinbase functions as both a brokerage and an exchange. Users create an account, verify their identity and can then fund it using bank transfers, debit cards or other supported payment methods. With funds in place, they can buy, sell and hold cryptoassets directly on the platform.

The company offers two main services through the Coinbase app. The standard Coinbase interface is designed for simplicity, allowing users to purchase and hold assets easily. For those with more experience, Coinbase Advanced provides lower fees and additional trading tools such as order books, charts and limit orders.

Investing on Coinbase

UK investors can use Coinbase to gain exposure to a broad range of cryptoassets. 

In addition to buying and holding, Coinbase supports staking, which allows investors to earn rewards by contributing to the operation of certain blockchains.

However, buying and holding cryptoassets via Coinbase differs from investing in traditional financial products, such as shares or funds. Cryptoasset prices can be highly volatile, with significant changes over short periods. While Coinbase provides a trustworthy entry point, it does not reduce the risks of the assets themselves, nor are the assets regulated. 

To learn more about how cryptoassets work, check our beginner’s guide to the market.

Considerations for UK investors

For those based in the UK, it is important to note that Coinbase is registered with and supervised by the Financial Conduct Authority (FCA) for anti-money laundering purposes, but cryptoassets are not regulated as investments in the same way as shares or bonds. 

As a result, cryptoasset investments are not protected under schemes such as the Financial Services Compensation Scheme (FSCS).

Tax obligations also apply. HM Revenue & Customs (HMRC) treats cryptoassets as chargeable assets, which means gains may be subject to capital gains tax. It is important for investors to maintain accurate transaction records.

Coinbase provides a straightforward and secure way for UK investors to access the cryptoasset market. It combines accessibility with regulatory oversight and a broad selection of assets. 

At the same time, the risks of volatility, costs and limited investor protection should be weighed carefully. 

For those seeking to explore digital assets, Coinbase can serve as a starting point, but it is important to approach it with an understanding of both its advantages and its limitations.

This article was produced in partnership with Coinbase.

Information is provided for informational purposes only and is not investment advice. This is not a recommendation to buy or sell a particular digital asset or to employ a particular investment strategy.