[vkou]

* Secure the shit out of those private keys

Are they insured for 100% of the value of the coins on those private keys?

If not, you are paying 2% YoY + X%, where X% is your counterparty risk - the odds that someone at Coinbase fucks up, and your money is irreversibly gone.

[DennisP]

That's a good question. If the answer is "yes" then maybe that's the reason for the high fee.

Currently they have insurance on their hot wallet coins, which I think is about 5% of the total. The cold wallets aren't insured, but they're paper wallets held in safe deposit boxes all over the world, so it's unlikely that a large percentage would be lost.