Last update: Apr 28, 2021

Xapo vs Coinbase (2021): Is Xapo Next Big Thing On The Crypto Market?

This is an interesting battle. On one hand, Coinbase is a veteran cryptocurrency exchange that ranks among the most trusted companies in the blockchain space. On the other, Xapo is pivoting out of being just an exchange and is becoming a full-fledged Bitcoin bank in front of our very eyes.

Xapo vs Coinbase

Name Founded Countries Cryptocurrencies Trading Pairs FIAT Trading Fees Withdrawal fees
Xapo 2011 130+ Bitcoin 0 0 - BTC 0.00068615 5,430 satoshis
Coinbase 2012 100+ 328 129 up to 3% 3.99%

The real question, though, is: which service is better for you?

That’s what this article is going to help you figure out.

Coinbase Vs Xapo starts now.

Credibility And Company Info

Behind these two services are serious companies and individuals with a successful track record in the financial world.

There are key differences between the two.

Coinbase’s business model is already established, tried, and true.

Xapo went back to the drawing board, got into startup mode, and is about to unveil their new approach.

To evaluate these companies properly, we have to go back to the beginning.

Xapo’s history

Xapo

This company started as a vault. In 2011, the founder Wences Casares couldn’t find a proper way to store his Bitcoins, so he built one.

The legend states that soon friends and even financial institutions were asking him to store their BTC in his vault, so he started a company.

In 2013 he founded Xapo with COO Federico Murrone, and in 2014 they unveiled it to the world.

Their headquarters have changed locations many times. From California to Zurich, then to Hong Kong, and currently Gibraltar. This is a company that isn’t afraid to make moves.

Their core staff understands the financial world better than most.

Evidence of that, in 2018 they were awarded the elusive BitLicense by the New York State Department of Financial Services.

Another evidence, the company’s fully regulated and authorized by the Gibraltar Financial Services Commission (GFSC) as a Virtual Asset Service Provider (VASP.)

Xapo’s pros and cons

Pros

  • A simple new service that people probably wants
  • A useful debit card with special powers
  • Military-grade security for your funds

Cons

  • Exact characteristics unclear
  • Bitcoin only. Zero altcoins
  • No trading platform of any kind

Coinbase’s history

Founded in 2012 by Brian Armstrong and Fred Ehrsam, Coinbase was one of the first companies in the crypto space.

A product of San Francisco, California, they’re already a Silicon Valley staple.

By 2014, they already had over one million users. They had no problem getting major investments and used the money to create GDAX.

Aimed to serve advanced traders and serious professionals, The Global Digital Asset Exchange was born. Nowadays, they just call that service Coinbase Pro.

Coinbase’s pros and cons

Pros

  • Fully regulated and compliant
  • Easy to use and friendly to newcomers
  • Two crypto wallets. A custodial and a non-custodial one

Cons

  • Available in a limited amount of countries
  • Maybe too compliant?
  • A limited number of altcoins

Security

Crypto Security

This might be the most important aspect when it comes to selecting a crypto exchange or financial service.

How do these two rank?

Xapo’s security

No other cryptocurrency exchange can offer this: a military-grade vault in an underground ex-military bunker deep in the Swiss Alps.

Talk about cold storage!

Their servers “sit behind reinforced concrete, steel blast doors, and radio-wave-blocking cages” and have armed security at the door and satellite surveillance monitoring everything 24/7.

In addition to that, “your account is insured up to the USD currency equivalent of €100,000 by the Gibraltar Deposit Guarantee Scheme.

Coinbase’s security

This company doesn’t have a colorful story, but they’re solid on this front. They store the vast majority of the user’s digital currencies in cold storage.

That means, in devices not connected to the Internet, thus safe from hackers and the like. And, if and only if their service is breached, they provide insurance.

On the user’s site, they require Two-factor-authentication for most transactions and offer an address whitelisting opt-in security feature.

If you enable it, you’ll only be able to send funds to addresses on that list.

Wallet
Coinbase

One of the most popular sites to get started with crypto is Coinbase. This well-known wallet not only lets you buy, sell, and trade coins but also lets you earn more through short videos and courses. It’s a solid option for anyone new to the world of cryptocurrencies.

Learn about cryptocurrencies and more by visiting Coinbase today.

4.7/5
Visit Coinbase

Features comparison

There isn’t much information available on the new Xapo, but one thing’s for certain: you’ll get the brand new Xapo debit card, which promises a 1.1% cashback and the ability to spend in any currency including Bitcoin.

Apart from that, their service looks more like a bank than a Bitcoin exchange. And that might be a good thing.

On the other hand, Coinbase offers its trademarked ease-of-use, liquidity, a trading platform full of users, government compliance, and all the services you might expect from one of the leading cryptocurrency exchanges.

Let’s explore some of them.

Deposit methods

If you have a fully verified account with your bank account approved, Coinbase takes it all. Bank transfers, SEPA, SWIFT, and wire transfers starting at $5000.

You can also deposit using debit cards and credit cards, as long as those have an associated billing address.

At the time of writing, there is no information available regarding their accepted deposit methods.

Nevertheless, since they’re basically a bank, it’s safe to assume that you’ll be fully connected to the world’s financial system.

And you’ll be able to buy Bitcoin with ease. That’s the whole concept behind their upgrade.

A good question that we still don’t have an answer for would be:

Will Xapo accept PayPal?

Fees breakdown

Fees

In the regular Coinbase, there’s a flat trading fee of 0.05%. They might charge you a little more if your transactions are really small, though.

Coinbase Pro, a trading platform for serious users, uses a makers and takers model. Since the makers provide liquidity, their fees are cheaper.

The takers subtract liquidity, so their fees are higher. So, makers’ trading fees are between 0.00% and 0.50%, and takers’ between 0.04% and 0.50%.

On the other hand, Xapo charges an upfront $150 annual fee for all of their services and promises transactions with “no additional fees.”

Does that mean that transactions for their Bitcoin services will be free of charge?

Probably not. They’re a bank, after all.

Supported Cryptocurrencies

There’s a huge difference here.

The new Xapo is a bank with a Bitcoin component. That means just that, they only support Bitcoin and Fiat currencies.

An interesting question about them is: will they let you keep your Bitcoin’s private keys?

Or is their Bitcoin wallet a custodial kind of deal?

Coinbase supports 34 cryptocurrencies including the classical ones: BTC, Ethereum (ETH,) Litecoin (LTC,) Ripple (XRP,) Bitcoin Cash (BCH,) and a series of altcoins.

Supported Countries

Xapo aims to be a worldwide banking option, but there are countries it will not be able to serve.

They’ve been closing old-Xapo accounts and announced, “One reason your account may have been closed could be that we cannot serve customers from your country at the moment.

They’ve not yet revealed that list of unavailable countries.

Coinbase can only buy and sell cryptocurrency and Bitcoin in 42 countries, most of them in Europe.

Since it’s a US company, it’s fully licensed to operate in most of the states, including the elusive New York.

They have users in over 100 countries, but in most of those, they only provide their trademarked Coinbase custody through their cryptocurrency wallet.

What Is Special About Xapo?

Exchange At Glance
Xapo

Xapo is a Hong Kong-based company that provides a bitcoin wallet combined with a cold storage vault and a bitcoin-based debit card.

4.1/5
Visit Exchange

This company is making its own lane. They want to “pioneer a platform that bridges the gap between traditional financial institutions and the digital currencies of the future.

Will the experiment succeed?

That’s the question.

The product seems to be something the people wants and needs, but, is that enough?

We’re about to witness one of the most interesting experiments in recent Bitcoin history. Grab a seat and enjoy the spectacle.

Conclusion

What Xapo is doing couldn’t interest us more. If they succeed, they’ll attract a lot of new users to the crypto space. Nevertheless, if you’re reading this, you’re probably already in.

Their service might not be for you. If you’re reading this, you probably need a real exchange like Coinbase, Binance, or Kraken.

Keep an eye on Xapo for the less technically aware members of your family. This service could save their future.

This service could lure them in and teach them about Bitcoin in a non-threatening way.

Check Out Our Review Or Visit Their Website

author Andrej Ilisin

A serial entrepreneur working primarily with digital assets. He's the CEO of Sharp Capital, a company that focuses on growing online businesses. Andrej is also huge crypto, chess, and CrossFit enthusiast.