Kraken Review: Cryptocurrency Exchange With Advanced Trading Features

If you’re looking into cryptocurrency investing, you’ve likely heard of Kraken. One of the top exchanges in the world for trading digital assets like Bitcoin, Ethereum, and more, Kraken is well-known for its easy-to-use platform and low fees.

Though the exchange is popular among first-time crypto investors, experienced investors will get the greatest benefits from its features. Complex investment options and personalized account management help serious traders get the most out of their crypto portfolios — for the lowest possible cost. 

Still, the user-friendly design of the platform makes crypto investing less intimidating than some dark and complicated cryptocurrency sites. It could be the right place for some new investors to get comfortable in crypto markets, on a platform that can grow with you.

Here’s everything you need to know to decide.

What is Kraken?

Kraken is a U.S.-based cryptocurrency exchange available to users all over the world. Founded in 2011, it’s one of the oldest crypto exchanges around the world, as well as one of the largest by users and trade volume.

In addition to its numbers, Kraken’s reputation backs up its popularity. Pop into any discussion about crypto on a forum like Reddit — de facto crypto HQ online — and you’ll see mention of this platform pretty much instantly.

Because of its ubiquity, Kraken is often a popular choice for new crypto investors, but the platform is best suited for experienced investors. It offers competitive features that help advanced traders maximize profits and minimize their costs on the platform.

How does Kraken work?

Almost anyone in the world can use Kraken once you create an account and get verified.

To create an account, you’ll start by signing up with your email address and creating a password.

You’ll receive a code to verify your email address and activate your account. Once you activate your account, you’ll be taken straight to your Kraken dashboard.

This is where you can buy and sell currencies. But before you can begin trading, you need to verify your identity and set up a funding method. These steps will show up at the top of your dashboard until you’ve completed them.

You have options for verifying your identity, and the method you choose determines your trading limits and which Kraken features you can access.

The quickest method is Express, where you’ll need to provide:

• Your full name.
• Birthdate.
• Occupation.
• Address.
• Phone number.
• Last four digits of your Social Security number.

Express verification takes less than a minute. Alternatively, you can provide the last four digits of your Social Security number and upload an image of your passport, driver’s license, or ID card for Intermediate verification. This takes three to five minutes and gives you access to higher trading volumes and more features.

Once you’re verified, you have to fund your account.

You can fund a Kraken account with fiat currencies, including:

• U.S. Dollar (USD).
• Australian Dollar (AUD).
• Canadian Dollar (CAD).
• Euro (EUR).
• Pound Sterling (GBP).
• Swiss Franc (CHF).
• Yen (JPY).

If you have cryptocurrency holdings, you can also fund your Kraken account using one of 54 coins, including

• Bitcoin (BTC).
• Ethereum/Ether (ETH).
• Litecoin (LTC).
• Ripple (XRP).
• Tether (USDT).

The only way to fund your account with fiat currency is to make a wire transfer (no option for ACH transfers or debit card purchases). When you click through to deposit your chosen currency (in my case, USD), you’ll always see your current account balance and deposit limits (based on your verification level).

From that screen, you’ll also get the routing and account numbers and other account information you’ll need to initiate a wire transfer from your bank account.

Once your account is funded, you can initiate orders to buy, sell, and trade cryptocurrencies as well as three stablecoins (cryptocurrencies backed by reserve assets, such as USD).

To bump up your deposit limits and access more features, you can always increase your verification level to Intermediate or provide financial information for a lengthier review to reach the Pro level.

Pricing for Kraken

Kraken boasts low, competitive fees, but it doesn’t offer the simplified, no-fee options of some competitors. You’ll pay for each buy, sell, or trade you make on the platform, plus fees to deposit and withdraw funds in your Kraken account.

Funding fees (USD deposits)

Which bank you can use for funding through FedWire is limited by state and verification level in the United States. Additional deposit options are also available for international currencies. 

Withdrawal fees (USD withdrawals)

Additional withdrawal options are available for international currencies.

Maker and taker fees for crypto trading

Maker fees are charged when your trade order is matched immediately against an order already on the order book, which adds liquidity​. Taker fees are charged when your trade order is not matched, which removes liquidity.

Kraken’s trading fees for stablecoins and FX pairs are slightly higher than those for other cryptocurrencies.

Kraken features

Kraken faces a ton of competition in cryptocurrency investing, but here are some features that set it apart from other popular exchanges.

Funding options

You can fund your Kraken account with any of seven fiat — traditional, government-backed — currencies, including the U.S. Dollar (USD), Australian Dollar (AUD), Canadian Dollar (CAD), Euro (EUR), the British Pound Sterling (GBP), Swiss Franc (CHF), and Japanese Yen (JPY).

Unlike some competitors, Kraken doesn’t let you fund your account through an ACH bank transfer, or debit or credit card purchase. To fund the account with fiat currency, you have to initiate a wire transfer from your bank account, which takes between one and five business days.

Kraken offers dozens of wire transfer options, depending on the currency, each with different fees. You can always deposit CAD and EUR via SEPA transfer for free.

Alternatively, you can fund your account with supported cryptocurrencies if you already have crypto holdings through another platform. Kraken credits crypto deposits to your account instantly, so you can use those funds to trade within a few minutes.

High liquidity

Kraken’s high trading volume — highest in the world in Euro volume — and low fees mean the platform offers high liquidity on assets.

Pro tip: higher liquidity on an exchange means you’re more likely to be able to trade an asset at the price you want through that exchange. More users on the platform and lower fees mean more people executing trades on Kraken — so you have more willing buyers and sellers when you’re ready to make a transaction.

This quality in the platform is key for advanced traders, who count on executing trades at target prices throughout the day and could lose a lot of money on lower-volume platforms.

Cryptowatch

Kraken participates in the Cryptowatch platform, which lets you keep an eye on 2,000 crypto markets across multiple exchanges in one place.

Through Cryptowatch, you can see the movement in markets, as well as your portfolio across various exchanges in one dashboard. You can use the platform to make trades through participating exchanges, so you can make decisions with all of your information in front of you at once.

You have to create a separate account to use Cryptowatch after you’ve signed up for Kraken or another participating exchange. The core functions of Cryptowatch are free, and you can buy credits for additional functionality, including alerts, access to the API, and Zapier integration. 

Futures investing

Unlike many competitors, Kraken facilitates trading on cryptocurrency futures — an agreement to buy or sell an asset at a later date for a fixed price. In volatile crypto markets, this option is important to help you hedge the risk of prices dropping before you sell or spiking before you buy.

Kraken Futures aren’t available for every currency on the exchange. It only offers futures for five coins:

• Bitcoin (BTC).
• Ethereum (ETH).
• Litecoin (LTC).
• Bitcoin Cash (BCH).
• Ripple (XRP).

Futures trading happens in regulated currency pairs with USD or EUR with varying timeframes. (Note: Euro currency pairs are pending regulation as of this writing and will be coming soon).

Kraken futures are available to non-U.S. investors with at least Intermediate verification on the platform.

Margin trading

Kraken lets all users trade with up to 5x margin, which means you can make a purchase on the platform with as little as one-fifth of the necessary collateral, and Kraken puts up the rest as leverage. This can potentially increase your profits from trading — but also your losses.

Margin trading is available to all verified users on Kraken, but it’s riskier than other types of trading, so only utilize the feature if you have advanced knowledge of investing and careful risk management.

Margin trading is available on Kraken in these 16 currencies:

• Bitcoin (BTC).
• Ethereum (ETH).
• Tether (USDT).
• Monero (XMR).
• Ethereum Classic (ETC).
• Augur (REP).
• Ripple (XRP).
• Bitcoin Cash (BCH).
• Tezos (XTZ).
• Litecoin (LTC).
• Cardano (ADA).
• EOSIO (EOS).
• Dash (DASH).
• Tron (TRX).
• Chainlink (LINK).
• USD Coin (USDC).

OTC exchange

Pro-level users on Kraken have access to over-the-counter trades, private trades between users off the main crypto exchange. The platform offers this personalized service to high-net-worth individuals making large orders.

OTC clients also get daily trade and market recaps and one-on-one access to experts on Kraken’s OTC desk for consultation and trading guidance.

OTC trading is available for all assets the Kraken platform supports.

Personalized account management

Investors who “consistently trade” on the Kraken platform get access to personalized account management. The platform assigns you an account manager, and you can contact them 24/7 via email, phone, support tickets, or messaging app of your choice for personalized customer service.

Account reps aren’t investment advisers; they’re only available to offer support to alleviate technical issues or issues with your account you encounter on the platform.

My experience researching Kraken

For me, as someone new to crypto investing, Kraken’s platform is overwhelming. I preferred simplified exchanges or investment apps that pare down the options and make it easy to dip my toes in by investing a few bucks.

But Kraken isn’t for uninitiated crypto investors like me. It’s for advanced traders who want to maximize profits. The platform’s features facilitate efficient and profitable trading much better than the pared-down options for newbies.

Kraken’s high volume and low fees make for a highly liquid exchange that facilitates profitable trading. Its advanced features, including margin and futures trading, let investors execute complex trades that can increase profits (albeit with higher risk).

One drawback to Kraken for new or advanced investors alike is its funding options. Crypto platforms have traditionally only allowed funding through wire transfers, but many have updated to offer more options by now, and Kraken is behind the curve on that front.

I’d like to see an ACH transfer option for U.S. users and even the ability to make debit and credit card purchases. The ability to connect a bank account through a service like Plaid, like some exchanges allow, would make the process even simpler.

Who is Kraken best for?

Advanced crypto investors

Kraken’s suite of features offers advanced trading capabilities for seasoned investors. Complex trading options like margin and futures trading let experienced investors maximize profits — but they’re useless at best and risky at worst for inexperienced investors.

Institutional or business investors

Kraken offers access to its API and personalized account management for investment banks, brokers, funds, insurance firms, and other financial firms. Institutional clients get higher funding limits than those listed above for individuals, plus priority access to customer service.

International investors

Kraken is available to users in all U.S. states except Washington and New York, and it’s a popular option for U.S. investors. However, its funding and withdrawal fees are more favorable in non-U.S. currencies.

Who shouldn’t use Kraken?

New crypto investors

Kraken is one of the exchanges you’ll hear recommended often for those just getting into crypto trading, but better options have emerged in recent years. Inexperienced investors won’t benefit from the bulk of Kraken’s profit-maximizing features, so the platform’s steep learning curve is probably not worth the trouble.

If you’re new to crypto, you can dabble in a few markets easily through a traditional investing app like Robinhood or Cash. Or try a beginner-friendly crypto exchange like Coinmama or BlockFi.

Kraken vs. competitors

Coinbase

Coinbase is another of the largest cryptocurrency exchanges in the world, popular among new and experienced investors alike. Its mobile and web apps are easy to use, but it doesn’t allow advanced trading features like margin and futures.

While experts often recommend Coinbase for new investors because it’s easy to use, the platform’s complex fee structure can mean high fees — nearly 10% — for low-dollar trades. Still, the platform courts new investors with a free $5 in Bitcoin for getting started on Coinbase and up to $39 in free crypto to practice and learn how to trade in new currencies.

Coinbase users can also get a Visa debit card that lets you spend directly from your Coinbase account balance on everyday purchases.

Gemini

Gemini is a U.S.-based cryptocurrency exchange and among the most popular around the world. 

Gemini uses a fee structure similar to Coinbase, where you pay a flat fee based on the order amount, which makes low-dollar transactions expensive. It offers an easy-to-use web and mobile app for beginners, as well as an advanced desktop trading platform called Gemini ActiveTrader for pro-level traders.

Gemini doesn’t offer a debit card, but its app does include a mobile payment option that lets you make purchases from your crypto balances using a QR code.

Summary

Kraken is among the most popular crypto exchanges in the world for good reason. It’s generally user-friendly and offers some of the most efficient trading options for advanced traders available. Sign up if you’re an experienced investor or a new user who’s willing to do your research and become familiar with advanced trading features.

Read more:

• Investing In Bitcoin: Everything You Need To Know Before You Buy
• 8 Alternatives To Bitcoin You Should Know About