Understanding Coinbase’s GDAX Cryptocurrency Exchange

Coinbase’s GDAX (now Coinbase Pro) is a cryptocurrency exchange that trades USD for Bitcoin, Bitcoin Cash, Ethereum, and Litecoin, allows some coin-to-coin exchange, and pairs with Coinbase.

More specifically, GDAX (a product of the company Coinbase) allows users to trade 1. USD and Euros for Bitcoin, Bitcoin Cash, Ethereum, and Litecoin, 2. the British Pound (GBP) for Bitcoin, and 3. Bitcoin for Ether, Bitcoin Cash, and Litecoin (and therefore Ether for Bitcoin, Bitcoin Cash for Bitcoin, and Litecoin for Bitcoin). NOTE: This means not all trade types are offered. For example, one can’t trade Litecoin for Ethereum directly.

While choices of what alt-coins one can trade are limited, GDAX is notably a smart place to start for anyone who wants to trade cryptocurrency-to-cryptocurrency (especially for users who already have Coinbase).

GDAX can operate in nearly every state in the U.S. It pairs with Coinbase. It has low fees and can be used to convert USD back and forth from cryptocurrency. In those respects, it checks all the boxes for someone wanting to get into cryptocurrency trading.

In general then, after a person starts feeling comfortable with Coinbase, GDAX is the next logical step (especially considering its much lower fees). Once one has a grasp of GDAX, then moving on to other altcoin exchanges (like Bittrex) makes sense.

NOTE: GDAX was changed to Coinbase Pro in May 2018. Coinbase Pro is effectively the same site as GDAX with a few slight changes. We’ll be re-working this page to reflect the changes shortly. For the time being you can use either site and your balances and logins will be the same on both exchanges.

TIP: Want to get started with GDAX? You’ll need to sign up for Coinbase first (click this link to get $10 in Bitcoin when you spend your first $100).

TIP: Considering reading up on GDAX’s trading rules before trading. You might get clued into something you wouldn’t have otherwise considered.

Coinbase Pro Explained | Coinbase dumping GDAX brand – Review New UI.

How to Trade Cryptocurrency on GDAX

Below is an ultra-simple guide to trading on GDAX, also see the video and GDAX’s FAQ section.

  1. FIRST AND FOREMOST: USE TWO FACTOR AUTHENTICATION AND A STRONG PASSWORD. MAKE SURE TO ENABLE ALL SECURITY FEATURES IN COINBASE (GDAX uses your Coinbase logins and settings). Coinbase/GDAX is insured, but not against your account getting hacked, just against something happening on their side.
  2. To trade on GDAX, you first need to be a Coinbase user. So if you haven’t signed up for Coinbase, do that first.
  3. Once you have Coinbase set up, you have a range of choices. You can deposit funds directly into GDAX, or you can deposit them into Coinbase (in your USD wallet) and then move them over to GDAX (by going into GDAX and hitting the “deposit” button and transferring funds from your USD wallet to GDAX). You can also deposit Bitcoin, Litecoin, or Ethereum from Coinbase into GDAX (so you can buy coins in Coinbase or GDAX and move them back and forth). All exchanges between Coinbase and GDAX are free, as are deposits into USD. However, transferring coins in-and-out of Coinbase can result in fees (as can using the bank wire option). TIP: Consider doing a bank wire transfer to cut down on wait times (the fee is a small price to pay if you want to act quickly).
  4. Now that you have funds in GDAX, you can start placing orders. To place an order, click the select product button at the top right hand of the trade screen. TIP: When you select a product to trade, it looks like this: Buy this/with this; for example, BTC/USD means buy BTC with USD. Also, before you trade, turn off margin trading on the top right corner. Margin trading isn’t something you should do unless you have experience and know what you are doing (it is great that GDAX lets you leverage your buys/sells, and they even waive the fee for it which is nice; just don’t get into it unless you know what you are doing).
  5. When you place an order, you’ll use the left-hand sidebar. Notice that you can place a market, limit, or stop order. If you don’t understand that, take the time to (it is arguably the most important part of using an exchange). The basic advice though is always use limit orders to avoid fees. TIP: To cancel a limit order, make sure the right product is selected, then look at the bottom middle of the trade screen (for a list of open orders). Click the cancel button to cancel the order.
  6. After you make some money and coin, hit the withdraw button and transfer your funds back to Coinbase. Keeping your money in the exchange isn’t advisable. Only keep what is needed in GDAX to cover your active orders. TIP: When you place an order, the funds are locked into the order and won’t show on the right-hand sidebar. You still have the funds; they are just put aside for the order.

It is really as simple as that to get started, fund your account, select your product, set limit orders, and move funds back and forth between Coinbase and GDAX.

Any unanswered questions can be answered by GDAX’s FAQ and a little time spent braving through the sign-up process.

Below is some additional advice to consider:

  • Do your trading on GDAX with limit orders, and you’ll save almost all the fees associated with cryptocurrency (if not all). See “How to Buy and Sell Cryptocurrency Without Paying Fees.”
  • You can’t make many mistakes playing around with GDAX, that is unless you start clicking the deposit, withdraw, or “place buy order” buttons. That said, until you have deposited funds, you can’t do much (as you won’t be allowed to trade until you deposit enough funds to cover the trade). If you have a lot of money in there, be very careful about your decimal points. Don’t place a buy order until you have triple checked everything.
  • You can essentially ignore all the numbers jumping across the screen. Those numbers show things like trade history, orders on the books, market size, and the spread between two currency types. This can help you spot trends, which is super important once you get the gist of what is happening, but isn’t very relevant to the average user who just wants to do simple limit buying and selling.
  • When you trade BTC for ETH or LTC, you have to deal with the conversion rate. Make sure you understand the conversion rate before making a trade.
  • Sell to your wallet, not your bank account. This will avoid you paying extra transaction fees and dealing with wait times. Funding your GDAX account via your bank account takes a few business days.
  • Your USD wallet on Coinbase or your USD in your GDAX account is like a Coinbase-based wallet for USD. This is where you want to keep your USD after it gets to Coinbase. With that said, there are weekly limits for taking money out of Coinbase, so if you are over that limit, you may want to consider moving funds out. It is a matter of personal taste. The advice is just to avoid you paying transaction fees and dealing with wait times by using the USD wallet.
  • Good advice for trading cryptocurrency is to use limit orders only, to set buys low, and then to set sells for a price that isn’t too greedy. If you bought Bitcoin at $3k, there is nothing wrong with selling at $3.1 (if you sell as a “maker” and avoid market buys; as you’ll pay a 0% fee for this). If you want to go long in cryptocurrency, then consider going long with part of your funds, and taking short-term profits with the rest of your funds.
  • When you trade make sure to consider the tax implications, and consider dollar cost averaging and laddering buy/sell orders. Check out more tips and tricks.
  • You can click on the numbers in the order book to insta-fill them in your buy/sell form. This can be the difference between getting a quick limit buy or sell in or not (when the price is moving quickly).
  • To the last point, you’ll want to aim to make all trades as a “maker.” Learn about maker-taker fees to ensure you profit more by paying fewer fees.
  • The general advice is to not put too much money into cryptocurrency (especially all in one shot). It is risky and volatile. If you do want to put money in, consider dollar cost averaging over time as you get used to cryptocurrency trading. There is no get-rich-quick scheme on earth.

WARNING: GDAX is, unlike some other exchanges, insured. Of all the exchange they pose the least risk in some ways, but the generic disclaimer applies. That is: Exchanges have inherent risks. They can get go down for a while; they can get shut down; they can get hacked; the owners can go rogue. It isn’t common, but problems like that aren’t unheard of. Realize you are taking that risk and try not to leave all your funds on an exchange (especially those you aren’t actively trading).

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Gavin on

Awesome read keep up the good work!!

Bob on

There’s no apparent way with GDAX to trade BTC for ETH like you said. I’m wondering how you made GDAX do this?

Thomas DeMichele on

Go to the top left of the screen and select ETH/BTC. In that screen you can buy and sell ETH using BTC (thus you can trade BTC for ETH or ETH for BTC). You can trade LTC/BTC as well. You cannot however trade ETH/LTC (of course not, that would be madness… 😉 ).

Ex. Buy 4 ETH at .025 thus getting 4 ETH for .1 BTC. Or sell 4 ETH at .025 BTC thus selling 4 ETH for .1 BTC. It can make your brain spin at first, but the goal is the same as when trading BTC/USD. That is, buy low and sell high (to increase your stack of Ether and/or BTC depending on your goals).

Steve on

Any options for adding a Canadian bank account? I have a us bank account as well however when I signed up for coin base, based on my ip (located in Canada and travel a lot) I was placed as a Canadian buyer and couldn’t move my funds. Does this differ with gdax?

Thomas DeMichele on

I’ve been trying to research this, Canada doesn’t seem to have a ton of options for transferring the Canadian dollar to cryptocurrencies (don’t think Coinbase/GDAX works based on my research). That is a little frustrating, it would seem like such an easy thing to accomplish. I’ll post something when I know more. I’m not sure what Kraken’s policy is, have you tried them?

Robert B. on

It takes forever to get accepted into the GDAX account. For the past two weeks, I am constantly trying without any success so far to sign to open my account with GDAX. I have done it at least 50 times and most of the time I am getting the following message: “We’re sorry, ID Verification is taking longer than expected. Please check back periodically to see if your ID was successfully verified.”
I have some investment in LTC through Coinbase and need to check how the system works if I would want to sell some of my LTCs. Being in Canada is not so easy and straightforward process with Coinbase when comes to withdrawing (selling) cryptocurrency. It has to be done through GDAX. But as mentioned above it seems almost impossible to open an account with GDAX. What should I do to have it open? It seems that for the most of the time GDAX due to its limitations is unable to process a simple request to open a client account.

Thomas DeMichele on

This is frustrating. Have you opened a support ticket with them? https://support.gdax.com/customer/portal/emails/new

That is what I would do first (I’m sure you have, but wanted to reiterate this).

At the moment the crypto market is down considerably. I would wait for a recovery to sell personally, but that said of course you want to make your own choices and it is frustrating that you don’t have a clear pathway to this (especially since buying seemed to work for you).

All that said, I don’t think you have much to gain from constant attempts to get into GDAX. If you have submitted your application and contacted support, you likely do have to wait. They are really overburdened right now with all the price fluctuations and volume, so it could take longer than usual.

Meanwhile you should check this out: //cryptocurrencyfacts.com/exchanges/buy-bitcoin-worldwide-website/

Specifically, see this: https://www.buybitcoinworldwide.com/canada/

Canada seems to not have many choices for fiat/crypto. I’m personally weary of any choice where you have to do Peer-to-Peer. If you go that route pick someone with an extremely high rating. Also pay attention to the market price. Often you can’t get the best deal on peer-to-peer exchange (generally you get a better sell price than buy price though).

I would go down that list and then research those choices. You might find one that is well reviewed and works.

Larry on

Can you name any reputable sites where I can trade crypto other then BTC, ETH, or LTC. I’m interested in the companies trading at less then $100 USD/coin.

Thomas DeMichele on

You can use Kraken, or once you have BTC / ETH use Bittrex. There are others, but those are two examples of places to buy a variety of “altcoins” (coins that aren’t Bitcoin). Many trade under $100 USD.

JG on

WHERE IS THE “TRADE SCREEN” in GDAX????

JG on

Actually, where is the “select product” button referenced in the above section #3

Thomas DeMichele on

When you sign into GDAX you can click the logo in the top left corner to get to the trading screen. Or right next to that you can select your trading pair (“select product”). For example select BTC/USD or LTC/BTC.

Then you’ll be on the screen you trade on. The order form is on the lefthand side under that, open orders are below the chart. Order book and trade history are labeled. Happy to answer any questions, but should be straight forward once you get the hang of it. Unless you place an order, deposit, or withdraw there is nothing to mess up by clicking around.

Larry on

You say “GDAX is, unlike some other exchanges, insured”

Insured against what?

If the company is force into bankruptcy or liquidates, to what extent are customers accounts covered?

What about a hack that steals customer funds?

Thomas DeMichele on

So first off, fiat deposits are insured like this: https://support.gdax.com/customer/en/portal/articles/2689803-how-deposits-are-insured-on-gdax

They also insure the crypto they hold: https://www.coinbase.com/legal/insurance?locale=en-US

Further, both fiat and crypto are mostly kept offline in cold storage, so there is no direct way to actually wipe out GDAX from the front end.

The insurance doesn’t apply to your account getting hacked, so make sure to use a strong password and Two Factor Authentication.

These protections ensure against anything from a hack to the company going under to employee theft etc.

Nothing is 100% safe, but as far as the crypto space goes, GDAX is a good choice.

Cvetomir Vasilev on

how I make verification in gdax ?? I have only id card. I have not driver licence and passport! how ?

Thomas DeMichele on

They, like many exchanges, are somewhat of sticklers on what they expect in terms of verification. I’m not sure there is any way around offering up the information they request.

If I was in that position I would try to offer up what I had and see if that was good enough, but generally you just need to follow the instructions.

However, there are other exchanges out there that one can use. Kraken is on example.

Will on

Excellent advice.