Coinbase was founded by Brian Armstrong and Fred Ehrsam in 2011, with operations beginning in 2012 once they listed Bitcoin for open trading. Brian Armstrong formerly worked as a software engineer for AirBNB, prior to launching Coinbase. This review is not about Coinbase, but before we jump to GDAX, it is important to understand where it came from.
GDAX is a sister-company of the Coinbase exchange, it was founded in 2016. GDAX stands for Global Digital Asset Exchange. It is a re-branded form of Coinbase, under which the company listed Ethereum (ETH) for trading. Coinbase is a licensed and approved company in the US, and is one of the oldest players in cryptocurrency exchange market. Coinbase’s rating is among the highest in the world, this is down to the trust it has built over time. Does GDAX stand true to the expectations set by Coinbase? Let’s find out in this detailed review of this newly formed cryptocurrency exchange.
After starting its operations in 2016, GDAX received a mixed response from users. The founders of Coinbase aimed to launch GDAX as a dedicated platform for seasonal traders and expert users. The interface of GDAX is not as simple as many other cryptocurrency exchanges out there however this has not put users off as it continues to build a stellar reputation. Another positive GDAX has is that it provides a seamless and smooth transfer of accounts from Coinbase. If you are an existing Coinbase customer, you can easily move your account to GDAX.
Account transfer might be smooth, but you will still need to transfer your cryptocurrency from one wallet to another to trade on GDAX. If you have been using coinbase for a long time, getting used to GDAX would be an easy task for you. However, if you are a newbie, GDAX might pose a few extra issues with its interface being fairly complex.
GDAX has limited support worldwide. It is not available in all countries, only the USA, UK, Singapore, Canada, Australia and Europe. It has an option for USA, UK and European customers to trade using their government issued currency, but this luxury isn’t available to the customers from Canada, Australia and Singapore. GDAX allows only three Fiat currencies namely – the US Dollar, the Euro and the British Pound.
Despite being a sister company of Coinbase, GDAX offers very low fees on transactions and trading. Ranging from 0.1% to 0.25%, the fees of GDAX are dramatically lower than that of Coinbase, which can charge between 1.5% to 4% and higher, especially when using a credit card or debit card for payments.
Sailing into the success-boat of Coinbase has made it easier for GDAX to receive a warm welcome from the users who wanted a platform with more flexibility and lower transaction fees. GDAX also gives its users a chance to diversify their crypto-portfolio. Apart from Bitcoin, it also has Litecoin (LTC), Ethereum (ETH) and Bitcoin Cash (BCH) in which the customers can trade.
ADVANTAGES OF GDAX
GDAX has many advantages over other cryptocurrency or bitcoin exchanges –
- The biggest advantage it has is an easy migration from Coinbase. Those that have been trading cryptocurrency the past few years have more than likely been the customer of Coinbase.
- Coinbase was originally dedicated strictly to trading Bitcoin since 2012, until it launched ETH, BTC & LTC. GDAX has always allowed its users to trade other currencies as well. Currently it has the same 4 currencies as Coinbase – Ethereum, Bitcoin Cash, Bitcoin and Litecoin.
- GDAX can be seem as a traders dream because they allow marginal trading, unlike other cryptocurrency exchanges that do not. This means that you don’t need to put the full size of the trade down whilst still gaining the maximum profits. The flip side being that you will realise the maximum losses as well.
- This cryptocurrency exchange has one of the lowest fee structures. It charges between 0.1% to 0.25% for transactions. Like Poloniex, it follows a maker-taker model, but it has zero maker fees. That means, someone who wants to ‘buy’ a crypto-asset does not need to pay any additional fees, which is amazing! But the taker (seller) has to pay certain fees. The fees vary from currency to currency, and also on the volume to be traded. If you are trading high volume, your fees will be lower.
- GDAX’s interface, and model resonates completely with experienced trading platforms. Those who want to take their trading game a notch higher, must use GDAX for its information-rich interface.
- It allows customers to deposit three different currencies – USD, Euro and Pound Sterling. Users can make the deposits using either bank transfers or credit/debit cards.
- GDAX supports Bitcoin hard-fork, that is why they have listed Bitcoin Cash on their network.
- They have robust and safe security features. They allow 2FA (two factor authentication), which acts as an extra layer of security to your funds.
- So far, GDAX has no history of being hacked or its security being compromised, which although is never a guarantee of safety, it certainly does give you more confidence investing in this exchange.
- GDAX has a history of undergoing financial audits and regular IT security to stay away from any controversies related to financial management.
- They have stored their 98% of the cryptocurrency in cold-storage (offline wallets), which means only a marginal amount is available online. Hence, even if it gets hacked, they will hardly lose anything.
DISADVANTAGES OF GDAX
There might be many upsides of GDAX, but let’s not ignore the downsides either. There are potential disadvantages that GDAX has, and some of them are –
- The biggest downside of GDAX is its limited availability. It is not available worldwide, and only operates in the USA, Singapore, Australia, Canada, UK and Europe.
- The second disadvantage is that it does not allow the government issued currencies of all countries to be deposited in the user accounts. Only USD, Euro and Pound Sterling are allowed. The citizens of Australia, Canada and Singapore are only allowed to trade in cryptocurrencies, or they must deposit USD, Euro or Pound Sterling if they wish to trade using Fiat currencies.
- GDAX only allows USA, UK and European citizens to trade in all the cryptocurrencies available on their network. Citizens of Singapore, Canada and Australia only have Ethereum and Litecoin available for trading. This limits their customers greatly, as the citizens of these three countries cannot even use their government issued currency to buy any crypto-asset. Moreover, GDAX also lacks worldwide support right now, which makes it a very limited and restricted network.
- The interface of GDAX is not meant for newbies and beginners. It is only for seasonal traders and those who have been trading for a long time. Those who have been using coinbase and trading cryptocurrencies for years, will rejoice in the fresh outlook that GDAX provides, but those who are just entering into the cryptocurrency world, should first get some experience with easier interfaces. Confusing interfaces can often cause unwanted financial loss.
- GDAX has a history of crashes and network maintenance issues. Back in December 2017, when the Bitcoin price was at its all-time high (ATH), GDAX and Coinbase, both crashed because of high traffic influx. GDAX needs to learn to manage traffic in peak hours to avoid these issues again.
- It has no application for iOS or Android, but it does provide API support for third-party applications.
REGULATION AND REACH
Being a sister-company of Coinbase, one of the most popular and oldest cryptocurrency exchanges of the world, GDAX has no compliance issues as such. It is regulated and legal in the US and the countries it operates in (UK, Europe, Singapore, Canada and Australia).
However, it does not provide facilities and luxuries to all of its customers alike. USA, UK and European customers have access to a lot more facilities than those of other countries. For citizens of the US, UK and Europe, Bitcoin, Ethereum, Litecoin and Bitcoin Cash are available, but for Canadian, Singaporean and Australian citizens only Ethereum and Litecoin are available. They can’t use their Fiat currencies to trade, which means that they must deposit in USD, EUR or GBP. Or alternatively they must send cryptocurrencies from external wallets to begin trading.
Market position of GDAX as of now is limited and slow, since it is a fairly new exchange in the world of cryptocurrencies. The total views on GDAX in the past six months are around 54 million, which is just a sixth of what Coinbase managed to get (359 million).
The highest traffic it pulls from is USA (59.14%), followed by UK (7.34%), Germany (2.56%), Spain (2.25%) and France (2%).
Compared to Kraken.com, GDAX performs better in terms of views. While Kraken managed to constantly remain below 50 million in view-count, GDAX touched almost 64 million back in December 2017 when the price of Bitcoin soared sky-high.
SIGNING UP ON GDAX
Signing up on GDAX is super easy for those who are already an existing user of Coinbase. However, for new users it is very similar to signing up on any other cryptocurrency exchange. You need to provide your personal details and email ID, after which a verification link will be sent to your email. Once you verify your account, you are free to add bank details to deposit funds. You can choose to skip this step if you want to deposit in crypto from an external wallet.
For existing coinbase users, you just need to login by using credentials of your coinbase account, and verify your identity by filling in the codes sent to you on your 2FA (two factor authentication). This is done either by SMS on your registered phone number or a code on Google Authentication. Once you are done, you are free to use the GDAX account almost instantly.
You can deposit an unlimited amount from your existing Coinbase account into your newly created GDAX Account. However, there is a limit to withdrawals. As an individual you can only withdraw $10,000 per day, and if you have an institutional account, you can withdraw up to $50,000 per day.
CRYPTOCURRENCIES SUPPORTED BY GDAX
GDAX supports Bitcoin, Litecoin, Bitcoin Cash and Ethereum but only for the customers of USA, UK and Europe. For citizens of Australia, Canada and Singapore it only has Litecoin and Ethereum to offer. There are no other cryptocurrencies or ICO tokens on GDAX available for trading.
TRADING FEATURES OF GDAX
GDAX gained almost instant popularity because it is a sister-company of Coinbase. The interface of GDAX cannot be called user-friendly for beginners, but for expert traders it is great. Those who wanted a hardcore trading platform will love GDAX for its detailed layout and information rich interface. GDAX allows cryptocurrency and Fiat currency pairs for trading. Customers can trade using USD, EUR or GBP on GDAX and buy BTC, LTC, ETH or BCH easily.
FEE STRUCTURE OF GDAX
The best part about GDAX is its low fees. It has a maker-taker system and the makers have to pay zero fees for all their ‘buy-orders’, while takers pay a varying fee ranging from 0.1% to 0.5% of the total amount. The fee further depends upon the volume as well. If the volume is more, the fees would be less. Fee structure on GDAX also depends upon the trading pair. The fee structrue will be different when trading BTC/USD compared to ETH/EUR, the reason being is liquidity. With less liquidity in some of the markets, it is hard to get an accurate price and so the exchange will look to cover itself on those where the volatility is very high. You can see the difference in the two images below –
This one is for BTC/USD trading pair
This one is for ETH/EUR trading pair
CUSTOMER SUPPORT ON GDAX
GDAX provides a robust and active customer support that is available 24/7. There are users who have frequently complained about their grievances not being properly addressed, but there are customers who were happy with the instant support they received. GDAX has a detailed FAQ section, where all the queries and common questions of users are listed to browse. However, if you are still unable to find your query there, you can always send them an email, to which they typically respond between 24 to 72 hours.
After the supreme-success of Coinbase, similar expectations were put on GDAX, but there are several shortcomings that have affected its growth and expansion. If they list more crypto-assets, ICOs and tokens on their platform, and open trading to more countries, then we feel that GDAX can be a big player in the exchange market. For now the platform is working fine for expert traders, especially as it allows margin trading. This should give you a good basis to make a decision about choosing GDAX as your cryptocurrency exchange.