GDAX Cryptocurrency Exchange Review

GDAX Cryptocurrency Exchange Review

in Bitcoin, Cryptocurrency, Newbie
Global Digital Asset Exchange (GDAX) is a company owned by Coinbase. While some of you may know Coinbase for the ability to purchase Bitcoin directly by Credit Card, GDAX is the other part of the company – the exchange aimed at traders. Trading fees at GDAX are much lower and margin trading is available. The company holds the New York BitLicnese, which is by its nature an interesting piece of legislation. The New York Department of Financial Services (NYDFS) attempted to make the city a major Bitcoin trading center, the same way it hosts the world’s largest stock exchange. One may argue the idea backfired, as a lot of the key players backed-out of the 2015 proposal. This is due to the burdensome and slow regulatory procedure. As of the summer of 2017, only three companies have received the license and Coinbase is one of them.
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When it comes to hacking, a major attack has not struck GDAX or Coinbase. That being the case, there was a “flash crash” in Ethereum prices, which raises suspicion. The coin was trading at around $317 when it suddenly spiked to an alleged value of 10 cents and quickly retraced. The company proceeded to halt trading and later claimed this was merely a “fat finger” - single large trader accidentally placed a market sell order, which triggered a chain of stop-loss orders to be executed. The public’s concerns, of course, come from the fact GDAX offers margin trading. The company could have manipulated the price, in order to wipe-out traders who were long. All of this is purely speculation. Other than this case, the user reviews for GDAX generally match the ones for Coinbase. One of the major concerns of the fans of decentralization in the crypto verse is the fact a lot of the investors behind the project are well-established in the traditional financial sector.
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GDAX features

  1. Real-time market data. See the most up-to-date crypto prices.
  2. Flexible API allows for secure and programmatic trading bots. This is a big reason many institutional and professional investors prefer GDAX. Regular IT security checks and financial audits. It’s important to note that the Coinbase team places a monumental amount of value on keeping their platforms safe.
  3. Regular IT security checks and financial audits. It’s important to note that the Coinbase team places a monumental amount of value on keeping their platforms safe.
  4. Secure storage. GDAX keeps 98% of their users’ funds off the Internet in cold storage.
  5. FDIC insured USD balances up to $250,000.
  6. Wide variety of fiat and cryptocurrency pairs. Trade between BTC/USD, ETH/USD, ETH/BTC, LTC/BTC, LTC/EUR, LTC/USD, BTC/GBP, BTC/EUR, and others.
On top of that, GDAX allows you to trade using a variety of different strategies.
  1. Market buy: This is pretty standard on any exchange and can be done on Coinbase, but if you do it on GDAX you will pay a lower fee.
  2. Limit buys: This allows you to set a price limit that you want to buy something at. For example, if you think the price of Bitcoin is going to drop overnight, you can set a limit buy for a lower price. If the price does drop, GDAX will fulfill your order at the lower price.
  3. Stops: This allows you to set stop losses, which means GDAX will automatically sell a specified amount of your cryptocurrency if the price drops to a certain threshold.
  4. Margin Trading. This means you can margin trade with a leverage between 2x and 3x depending on the crypto trading pair. This is a very risky way to go about trading, but the upside can be enormous. Tread lightly.
 

GDAX Currency Support

GDAX provides decent coverage of major cryptocurrencies and fiat currencies. Bitcoin, Ethereum, and Litecoin are all available for market trading. You can deposit and work in any of these cryptos, along with US dollars, euros, and British pounds. You can trade Bitcoin with all three fiat options, while Ethereum and Litecoin trades can be made with dollars, euros, and Bitcoin.
Cryptocurrency exchange
 

GDAX Fees

Here’s how the GDAX fee structure breaks down:
  • Maker Fee: 0% (all volumes)
  • Taker Fee: 0.25% (volume-based discounts can drop this fee to as little as 0.1% for traders who trade more than 113,432 BTC in a 30 day period)
 

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 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 is 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 resonate 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.
 

Conclusion

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.  

Which cryptocurrency exchange do you prefer - Coinbase or GDAX? Share your thoughts in the comments section below. 


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