Cryptocurrency Exchange Review
Making Crypto Simple
The increased popularity of cryptocurrency trading and crypto purchases in recent years is responsible for the incredible and rapid boom of digital marketplaces. From Bitcoin exchanges to crypto brokerages and trading platforms, the Internet is full of platforms competing for the traders’ attention.
In order to discover which ones are respectable among experienced traders, one can simply browse through online user reviews. However, their experience might be subjective as it largely depends on their needs, investments, and trading strategies. This is why we recommend reading our detailed guides on the most popular cryptocurrency exchanges instead, as we cover both the good and the bad side of the coin.
Today, we’ll be looking at Kraken, an advanced trading platform based in the United States, famous for the variety of crypto and fiat currency pairs, unparalleled security, and its dedicated team of experts.
If you’re looking for an exchange that’s based in Australia, have a look at our list of the best cryptocurrency exchanges in Australia.
Kraken is one of the top US-based cryptocurrency exchanges that have managed to stand the test of time. Although built and launched in 2011, Kraken’s trading platform was put into function two years later. The reason for this could be that Kraken’s founder and current CEO, Jesse Powell, was busy helping out Mt. Gox – one of the first popular crypto exchanges – rise back from the ashes after a terrible security breach.
Prior to Kraken, Powell founded Lewt, Inc., a company for in-game virtual currencies, the ones used for creating accounts or unlocking additional features in online video games. It was only later on that he became interested in launching a digital currency exchange himself. The company’s main office is located in San Francisco, California, but its services are available to an international clientele.
Kraken is respected for its transparency and continual effort to prove that crypto platforms are far from high-risk marketplaces that one should avoid. A major part of this process is educating not only the mainstream audience but also the big players (governments, financial institutions, and regulators) on the potential of the blockchain ecosystem. In 2020, Powell was added to the list of “Most Influential People for 2020” by CoinDesk, a leading online crypto magazine.
Bitcoin and Other Cryptocurrencies
Kraken is an altcoin exchange, meaning it supports a variety of crypto assets, not only the most popular regular cryptocurrencies but also stablecoins, DeFi tokens, and other newly-developed assets. This also means that Kraken offers hundreds of trading pairs (against crypto and fiat currencies) and keeps increasing their number as its services expand across new markets.
For instance, Kraken has recently added 26 trading pairs, so that over 14 new assets are now available to Australian and UK traders, against Australian Dollars (AUD) and Pound Sterling (GBP) respectively.
As a fiat gateway, Kraken lets you purchase crypto with fiat currencies. If you want to pay in USD, you can deposit funds via Fedwire or wire transfer, SWIFT, Etana Custody, or via Silvergate Exchange Network (SEN). These transfers take between 1-5 business days. You can deposit Euro and CAD via SEPA bank transfer, wire transfer, or Etana Custody.
If you want to buy crypto instantly, you can do that via your credit or debit card (provided it’s a Visa or MasterCard). Every purchase incurs a 3.75% fee + 0.25 EUR. The minimum amount is 10 EUR, while the maximum amount is 4,000 EUR per week.
Kraken uses a maker and taker trading fee schedule based on its users’ 30-day trading volume. Here’s an overview of the schedule:
30- Day Trading Volume
$0 – $50,000
$50,001 – $100,000
$100,001 – $250,000
$250,001 – $500,000
$500,001 – $1,000,000
$1,000,001 – $2,500,000
As far as deposit fees go, FedWire, Etana Custody, SWIFT, and SEN deposits are free. For most deposit methods the minimum amount is 1 USD although if you pay through Silvergate, the fees and limits are higher. Kraken offers an extensive list of options so it’s always best to consult their official website. You can see Kraken fees in more detail here.
Kraken is probably best-known as a margin trading platform. This trading feature allows traders to trade cryptocurrencies with borrowed funds. Based on your initial investment (your margin), you’re eligible for a certain ratio (or leverage). Kraken, for instance, allows up to 5x leverage on both long and short positions.
The list of available cryptocurrencies for margin trading includes Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Tether (USDT), Litecoin (LTC), Ethereum Classic (ETC), Monero (XMR), Augur (REP), Tezos (XTZ), Cardano (ADA), DASH, LINK, EOS, TRN, and USDC.
Although Kraken has relatively low fees for margin trading, it also charges for keeping your position open. Every four hours the platform incurs a small rollover fee (maximum 0.2%) on top of the existing fee for creating the order.
Experienced traders might be interested in futures trading as well. This option lets you buy or sell crypto assets on a given date in the future for a fixed price. This way, you can lock in your profits even when trading on a volatile market such as the crypto one.
Futures trading looks attractive to someone who likes speculating on asset prices and profiting from their predictions. However, traders who decide to try this feature should be extra careful with the risks they take.
Kraken offers over-the-counter (OTC) trading on a separate platform built for high net-worth individuals and institutions who need deep liquidity to place large orders that would otherwise disturb the market if placed as a regular order on a regular exchange. On top of that, Kraken makes sure that such large sums are traded in a most secure manner. The OTC services come together with 1-on-1 consultation with Kraken’s experts and are open 24/7.
Another thing that Kraken exchange excels at is customer support despite (or maybe because of) the fact that the platform has experienced a 6x surge of new users in the last couple of months.
Apart from the support ticket system whereby customers send their queries via email and wait for one of their customer agents to reach back and solve their problem – Kraken claims that its team has resolved over 3 million tickets so far – users can turn to the 24/7 live chat to talk to Kraken’s team of experts for a quick fix.
In addition, Kraken has a special group of employees called Client Engagement Specialists, all of them experts in the crypto industry who marvel at providing financial advice with personalized solutions.
Finally, customers are more than welcome to visit Kraken’s Help Center and browse through their FAQ section, educational guides, and the robust Support Library, with data based on client interaction.
Is Kraken Safe to Use?
Kraken is one of the most trusted crypto marketplaces with an unmatched security policy. It’s registered as a Money Services Business (MSB) with FinCEN (USA) and FINTRAC (Canada). It’s also regulated in the UK by the Financial Conduct Authority (FCA), and by ASIC in Australia.
As a fully-compliant business, Kraken adheres to these regulators’ AML and KYC policies. In order to access higher tiers and additional funding options, customers are required to verify their identity and provide a legitimate photo ID.
Kraken encrypts all its data and performs frequent security audits. It stores 95% of user deposits in offline, cold storage. Accounts are secured with two-factor authentication (2FA) through Authenticator App or Yubikey, with a Global Settings Lock (GSL) which lets you lock your account for a certain period of time and prevent others from making changes and compromising it, and a Master Key that helps you regain access to your account if your email was compromised.
Another indicator of the platform’s dedication to security is the fact that Kraken has become the first cryptocurrency exchange to charter an SPDI bank in the US which will be very digitally asset-focused.
This step has allowed Kraken to avoid a state-by-state regulatory approach but earn a regulatory passport instead. By becoming a bank, Kraken is also able to get direct access to federal payments infrastructure and be able to integrate banking and funding options for its customers in a more seamless manner.
Kraken vs Coinbase
The main difference between Kraken and Coinbase is that the former is a global altcoin exchange, while the latter is more of a brokerage where you can get the best deal on your buying or selling order. The two exchanges have an untarnished reputation, offer competitive fees, and excel at security and customer support.
Therefore, choose Kraken if you’re interested in altcoins and have some experience in crypto trading. On the other hand, if you’re a beginner, choose Coinbase instead because it has a very user-friendly interface.
Kraken vs Binance
When you ask an experienced trader about an exchange that’s both international and offers a great choice of altcoins and trading pairs, the first platform that comes to their mind is either Kraken or Binance. Both platforms offer margin trading, fiat gateways, and excellent security features to protect your account and money.
However, Kraken has a better-devised security system. It’s licensed in many countries around the world, while Binance remains unregistered. On the other hand, Binance offers some of the lowest trading and deposit fees in the industry.
Frequently Asked Questions
What countries does Kraken support?
Kraken is an international cryptocurrency exchange, which means it can be accessed by users all across the globe unless sanctioned by local regulatory frameworks.
The list of countries where Kraken is currently unavailable includes Afghanistan, Congo-Brazzaville, Congo-Kinshasa, Cuba, Iran, Iraq, Libya, North Korea, Syria, and Tajikistan.
If you live in the Central African Republic, Mali, Eritrea, Guinea-Bissau, Namibia, Lebanon, Somalia, South Sudan, Sudan, and Yemen you can trade digital currencies but can’t make deposits to fund your account. Unfortunately, Kraken is off-limits for Washington State and New York citizens as well.
What payment methods does Kraken support?
Kraken supports a variety of payment methods based on where you live. If you’re from the States, you can choose to link your bank account and make fiat deposits via Fedwire, SWIFT, Etana Custody, SEN, or SEPA.
International customers can make wire transfers, use Etana Custody, SEN, POSconnect Interfin Transfer (in Canada), or FPS, CHAPS, and BACS (in the UK) in US Dollars, EUR, CAD, JPY, AUD, etc. You can also make card payments in certain locations. Please note that different payment options incur different fees.
Does Kraken have a mobile app?
Yes, Kraken has three different mobile apps. The first one, Kraken Pro, is available on Google Play for Android 7.0 and up and on Apple Store for iOS 11 and up. This app lets you use your Kraken Account to access the trading interface and place advanced order types on the go.
Recently, Kraken has launched a new more beginner-friendly Kraken app, available in all countries except for Crimea, Cuba, Iran, Japan, North Korea, Syria, and the US. The app lets you buy and sell cryptocurrencies, using different payment methods (debit and credit cards included).
You can access real-time price data and review your trading history. Finally, there’s the Kraken Futures app for trading futures.
Does Kraken provide a cryptocurrency wallet?
No, Kraken is not a custodial exchange and doesn’t provide any wallet services. When you deposit funds to your account, those funds are moved to Kraken’s cold storage and hot wallets.
The withdrawals are also handled from these wallets. Kraken advises its users to invest in a hardware wallet if they plan on storing their cryptocurrencies for a longer period of time as this seems like the most secure alternative.
Does Kraken have a Dark Pool?
At this moment, Kraken’s Dark Pool feature is unavailable.
Summing It Up
So, what distinguishes Kraken from other popular trading platforms?
Apart from the range of trading features, cryptocurrencies, and payment methods, what sets Kraken apart is its different approach towards promoting and simplifying crypto trading.
Kraken manages to popularize crypto assets among retail crypto traders and lawmakers alike, among both crypto-enthusiasts and those who were once staunch nay-sayers.
By prioritizing security, performance, and cost-effectiveness, Kraken demonstrates that the fintech industry is the future, and makes a clear statement about the crucial role cryptocurrency exchanges play on the market.