Coinbase was founded by Brian Armstrong and Fred Ehrsam in 2011, and in 2012 they started their operations by listing Bitcoin for open trading. Brian Armstrong has 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 some of its past.
Because GDAX is nothing, but a sister-company of Coinbase exchange, founded in 2016.
GDAX stands for Global Digital Asset Exchange. GDAX was a re-branded form of Coinbase, under which the company listed Ethereum (ETH) for trading. Coinbase is a licensed and approved company, by the laws of USA, which is why it has been one of the oldest players in cryptocurrency exchange market. The rating of Coinbase is among the highest in the world, because of the trust it built. But does GDAX stands true to the expectations set by Coinbase? Let’s find out in this detailed review of this newly formed cryptocurrency exchange.
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After starting its operations in 2016, GDAX received a mixed response from the users. The founders of Coinbase aimed at launching 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. Despite that, GDAX continues to build a stellar reputation. Another great thing about GDAX 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 since long time, getting used to GDAX would be an easy task for you. However, if you are a newbie, GDAX might seem to be a little typical and complex because of its interface.
GDAX has limited support worldwide. It is not available in all the countries, but only 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 – United States Dollar, European Euro and English 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 is dramatically lower than that of Coinbase that can charge somewhere around 1.5% to 4% upward, if you are using 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 diversity 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. Whoever has been trading in cryptocurrency since years, has been the customer of Coinbase for sure because Coinbase is one of the oldest exchanges out there.
- Coinbase was dedicated platform for Bitcoin trading since 2012, but GDAX allows its users to trade in other currencies too. Currently it has 4 currencies online – Ethereum, Bitcoin Cash, Bitcoin and Litecoin.
- GDAX can be called a trader’s delight because they allow marginal trading, unlike other cryptocurrency exchanges that do not.
- This cryptocurrency exchange has one of the lowest fee structure. It charges between 0.1% to 0.25% for transactions. Like Polonium, it follows a maker-taker model. But it has zero maker fee. 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 a certain fees. The fees varies 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 or wire transfers, and they can also use their credit and debit cards for deposits.
- 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 means the website is foolproof and safe.
- 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 six countries – 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 people who have been into trading since long. Those who have been using coinbase and trading in cryptocurrencies since years, will rejoice the fresh outlook that GDAX provides, but those who are just entering into the cryptocurrency world, should first get some experience with simpler interfaces. Because, confusing interfaces usually 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 should learn to manage traffic in peak hours, to handle such issues.
- 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 USA 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 USA, 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 even use their Fiat currencies to trade, but they either have to use USD, EUR or GBP, or load up their wallets with cryptocurrency bought from other exchanges.
Market position of GDAX as of now is limited and slow, since it is fairly new exchange in the world of cryptocurrency. The total views on GDAX in 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 prices of Bitcoin soared sky-high.
SIGNING UP ON GDAX
Signing up on GDAX is like a cakewalk for the existing users of Coinbase. However, for new users it is almost 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. After you verify your account, you are free to add bank details to load your ID with funds, or you can choose to skip this step in case you want to load your ID with BTC or ETH from another 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), may it be an SMS on your registered phone number or a code on Google Authentication. Once you are done, you are free to use GDAX account almost instantly.
You can deposit 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 people belonging to 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 a treat. 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. If you are trading BTC/USD, the fee structure would be different as compared to ETH/EUR.
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 been 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 from. 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 down for GDAX, but there are several shortcomings that have affected its growth and expansion. If list more crypto-assets, ICOs and tokens on their platform, and open trading to more countries of the world, there is no stopping for GDAX. However, for now the platform is working fine for expert traders as it allows marginal trading, unlike many other cryptocurrency exchanges out there. From here, we believe that the readers of this post will be in a good position to judge what is better for them, especially according to their geography.