Kraken, which was launched just two years after Bitcoin, is one of the most established crypto exchanges. Kraken is a trusted platform that offers top-quality security and more than 60 coins. You can also “stake” your coins or lend them out for rewards. All this at a lower price point than the average.
Who Will Find Kraken A Great Choice?
Investors who are just getting started with cryptocurrency, as well as those who have more experience, will find Kraken a great choice because of its top-notch security and lower trading fees. As with Coinbase, you should not dwell on beginner status too long in order to avoid losing large amounts of your investment dollars to fees for its training wheels platform.
Binance.US is a better choice if you are looking for a cheap platform to purchase crypto quickly. It charges 0.5%, as opposed to 2% for Kraken Instant Buy. To minimize fees, however, you will want to get out of this way of buying crypto quickly, regardless of where it is done. You can reduce your fees by switching to Binance.US to lower them to 0.10%.
Kraken’s Biggest Attractions
Kraken is not only one of the most popular cryptocurrency exchange platforms but also has many valuable resources for investors of all levels. Its top features include:
Security
The vulnerability of cryptocurrencies to hackers has increased over the years. This has led to millions in lost coins. Although most of the hacked exchanges reimburse their clients for lost value, it is not a good idea to end up on a crypto exchange that has low cybersecurity and leaves your coins open for grabs.
Kraken is serious about security and ranks first on the crypto exchange security review website CER. Kraken is unique in that it has never had any major hacking incidents over its 10-year history. This is something Binance, an international industry leader, cannot claim.
Kraken offers safe coin storage. 95% of deposits are held offline in cold storage units located around the globe. It also promises platform security. Servers are kept in secure cages that are monitored by video and armed guards 24 hours a day. Kraken not only provides physical security, but also encrypts your sensitive data at the system level and conducts vulnerability testing on its own system.
Ease Of Use
Although Kraken’s Instant Buy platform may make it a costly first venture into crypto, there is no barrier to entry for those just starting out. You can get verified within minutes for most user types (Kraken only has four). Pro, the highest tier, can take several weeks as certain documents must be manually reviewed.
After you have been verified, you are able to fund your account using fiat currency such as U.S. Dollars and then start buying cryptocurrencies. Although most major cryptocurrency platforms allow you to do this, some require that you purchase cryptocurrency from another source in order to make purchases on the platform.
Important note: Kraken uses third-party companies to process these fiat funds transfers. Each company has its own minimum and maximum fees for account funding. If you’re not careful, you could end up paying a fee when you cash in your money.
New investors might feel overwhelmed by the sheer number of fiat transfer options available. However, Kraken does provide some useful educational information, but you are mostly responsible for the actual investing.
The Kraken app was launched in the United States recently, except for New York and Washington. Although the app does not currently allow credit or debit card payments, Instant Buy trading is possible.
Advanced Investing Options
Kraken offers additional offerings that will appeal to more sophisticated investors.
Kraken provides coins for everyone. It also allows high-net worth investors in the U.S. to access margin trading. Margin trading is a risky type of investing that allows you to borrow money to finance purchases by using existing investments as collateral.
Margin can help you make exponentially more money, but it also opens you up to margin calls that could cause huge losses if the price drops unexpectedly. Margin trading is not a feature that is currently available on any platform in the U.S., as the federal government works to determine how it will treat crypto.
Margin trading involves additional costs. Kraken clients will be charged rollover margin fees and opening margin fees. When you open your first position (a.k.a. You can borrow money from Kraken and then purchase something. Kraken’s fees for opening are 0.01% to 0.022% depending on the base currency.
Rollover margin fees will be charged to maintain your position for the first four hours after you open your position. These fees are then reapplied every 4 hours. These fees vary depending on the base currency.
Kraken also allows you to stake certain coins. You agree to place your cryptocurrency on Kraken to get rewards. Kraken will use those coins to verify transactions in proof-of-stake currencies. Kraken pays biweekly rewards to coin staking according to how many coins you stake.
Maker-Taker Fee Model
Kraken, like many other crypto exchanges, uses a maker-taker fee model. This means that you will get a lower fee rate when you add liquidity to the market rather than taking it away.
When an investor places a trade order that isn’t immediately matched with an existing order, maker fees are charged. This is called a “maker”, as it creates demand for more cryptocurrency.
When an investor’s order matches with one already in the books, taker fees will be applied. This reduces liquidity as it removes an existing coin from the market. It is also known as a “taker fee”.
Kraken doesn’t charge fees until an order is placed. This means that your order will not be matched with another trader until the order has been executed. The fee you pay will vary depending on whether you are a taker or a maker. This will be known only after the order has been executed. Your order status (maker or taker), as well as the currency pair being traded (such U.S. Dollar to Dogecoin) and your trading volume for 30 days (in dollars), will determine how large your fee is. Your fee will be lower if you trade more in the last 30 days.
You may be charged a minimum trade fee if you use this method for small trades. Kraken’s website doesn’t specify the amount of these minimum trade fees.
These fees are not included in the Instant Buy fee. This option may be more appealing to beginners who are less familiar with maker/taker models. Although Instant Buy is true to its name, it allows you to quickly buy crypto. However, the price is much higher than if Kraken used the trading platform. It’s better to learn how to use the trading platform.
Instant Buy charges a 1.5% fee to purchase, sell, or convert any order. If you use a credit or debit card, you will also be charged a transaction fee of 3.75% + EUR0.25 (yes, you may owe additional fees). ACH bank transfers are subject to a 0.5% processing charge, which means that even a cash transaction will incur a 2% fee. This is 10 times higher than the transaction you would make on Kraken’s trading platform.
Kraken Cryptocurrencies
Kraken offers these cryptocurrencies:
- 0x (ZRX)
- Aave (AAVE)
- Aavegotchi, GHST
- Algorand (ALGO)
- Ankr (ANKR)
- Aragon (ANT)
- Augur (REP)
- Augur v2 REPV2
- Bancor (BNT)
- Basic Attention Token (BAT)
- Balancer (BAL)
- Bitcoin (BTC)
- Bitcoin Cash (BCH)
- Cardano (ADA)
- Chainlink (LINK)
- Compound (COMP)
- Cosmos (ATOM)
- Curve (CRV)
- Dai (DAI)
- Dash (DASH)
- Decentralization (MANA)
- Dogecoin (DOGE)
- Energy Web Token (EWT)
- Enjin Coin (ENJ)
- Enzyme Finance (MLN)
- EOS (EOS)
- Ethereum (ETH)
- Ethereum (ETC)
- Filecoin (FIL)
- Flow (FLOW)
- Gnosis (GNO)
- ICON (ICX)
- Kava (KAVA)
- Keep Network (KEEP).
- Kusama (KSM)
- Kyber Network (KNC)
- Lisk (LSK)
- Litecoin (LTC)
- Livepeer (LPT)
- Maker (MKR)
- Mina (MINA)
- Monero (XMR)
- Nano (NANO)
- Ocean (OCEAN)
- OmiseGO OMG
- Orchid (OXT)
- PAX Gold (PAXG)
- Polkadot (DOT)
- Polygon (MATIC)
- QTUM (QTUM)
- Rarible (RARI)
- Ren Protocol (REN)
- Ripple (XRP)
- Siacoin (SC)
- Stellar Lumens (XLM)
- Storj (STORJ)
- Sushi (SUSHI)
- Synthetix (SNX)
- tBTC
- Tether (USDT)
- Tezos (XTZ)
- The Graph (GRT)
- The Sandbox (SAND)
- Tron (TRX)
- Uniswap
- USD Coin (USDC)
- Waves (WAVES)
- Yearn Finance (YFI)
- Zcash (ZEC)
Kraken’s variety of coins, staking, and margin offers may appeal to more experienced crypto investors. Although the latter was a distinctive trait of Kraken over other top platforms, it has been restricted in the U.S. to individuals with large assets. However, it is still open to all outsiders. Advanced American traders still have access to Kraken’s vast cryptocurrency trading markets, which are becoming increasingly low as their trading volume increases.
Investors should be cautious with crypto trading, whether on Kraken or another platform. Do not invest money that you cannot afford to lose.