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Kraken Alternatives: 4 Better Platforms for 2020

Discover four alternatives Kraken with better security, stricter regulation, and a better trading experience.
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Author: hristina
Last Updated: 17 June 2020

In this guide, we will explore some of the disadvantages of Kraken and suggest alternative platforms that offer better usability, liquidity and safety.

What are Some of the Disadvantages of Kraken?

Kraken is a cryptocurrency exchange that offers access to 140 cryptocurrency trading pairs, hosting some of the more obscure coins and tokens. This opens up a world of highly risky trades, with the potential for rapid asset appreciation.

Kraken is one the few exchanges with a complete fiat gateway. This means that Kraken allows withdrawals in several leading world currencies, instead of only offering withdrawals of cryptocurrencies and tokens. 

However, despite its popularity, especially as a vehicle for cryptocurrency speculators to switch to regular currency, Kraken has several serious drawbacks.  The well-known Kraken cryptocurrency exchange has shown clear risks and discrepancies over the years.  

Being an unregulated platform, like many other cryptocurrency exchanges, Kraken is always at risk of hacks or asset theft. The exchange has also shown some evidence of Bitcoin robot trading.  

Other disadvantages include: 

  • Traders dumping their coins at scale, rapidly decreasing coin prices
  • Risk of price anomalies and trading engine flaws that lead to liquidated positions, or abnormal prices
  • Risks of losing the coins hosted on the exchange
  • Limited regulation on trading practices

For these reasons, we turned to alternatives which operate under stricter regulations, and have a proven track record of smooth, glitch-free trading. The following platforms also free access to useful cryptocurrency tools and educational resources and operate in more markets, such as forex, stocks, bonds, and ETFs. 

eToro: Buy 16+ Coins on a Safe Platform

eToro is a social trading platform that started adding cryptocurrency options since the 2017 crypto boom. Initially, eToro only offered a handful of assets, while exchanges like Kraken expanded their listings.

However, eToro grew its selection to 16 of the top cryptocurrencies. Compared to Kraken, eToro has avoided the hit-and-miss of listing obscure digital coins, then delisting them due to regulatory concerns.

eToro allows the purchase of those 16 physical coins outright, or users can choose to trade crypto as CFDs which is ideal for those who want to profit from price fluctuations but do not want to own crypto coins outright. Trading CFDs also means avoiding hidden costs on transferring actual Bitcoin, which may be costly due to network congestion.

Kraken, on the other hand requires at least some technical knowledge of cryptocurrency wallets in order to trade on its spot market.

While Kraken is only regulated with basic US FinCEN participation, eToro is licensed with the Cyprus Securities and Exchange Commission (CySEC), the British Financial Conduct Authority (FCA), and the Australian Securities and Investments Commission (ASIC), meaning that unlike Kraken, your funds will be protected in case of any security hacks.

Other eToro crypto trading features include:

Demo Account: Yes. Unlike Kraken, which has no trading for the extremely risky spot trading on crypto assets.

Educational Material: Yes, eToro has guides to start trading for all asset classes.

Fees: $10 inactivity fee, $5 withdrawal fee, spread fees may apply to cryptocurrencies, as well as overnight fees.

Minimum deposit: $200; $50 special offer, a minimum of $50 afterward.

Special Features: Social trading offers copying strategies, an appealing tool for those new to the extremely volatile cryptocurrency market.

Regulation: Cyprus Securities and Exchange Commission (CySEC), the British Financial Conduct Authority (FCA), and the Australian Securities and Investments Commission (ASIC).

Payment methods: Wire transfer, SEPA transfer, Wire transfer, online banking, instant deposit, Skrill, Neteller, PayPal, Sofort Banking.

OUR RATING

  • Trading CFDs safely on a regulated platform.
  • Native cryptocurrency wallet and withdrawal options.
  • PayPal and banking options available.
  • Smaller cryptocurrency and token selection.
  • No crypto-to-crypto pairs.
75% of retail investors lose capital when trading CFDs with this provider. Crypto assets are highly volatile unregulated investment products. No EU investor protection.

Plus500: Trade Crypto CFDs on a Regulated European Broker

Plus500 is a well-established broker, dating back from 2008, and aimed for European customers. Plus500 is an older and more established platform than Kraken and it preceded the creation of Bitcoin. It is also listed on the London Stock Exchange.

Plus500 has a limited selection of coins in comparison to Kraken, but those are some of the most liquid coins and tokens. The advantage of Plus500 is in also offering a mixed Crypto10 index of leading coins.

Cryptocurrencies supported: Plus500 lists CFDs for BTC, ETH, LTC, NEO, XRP, and IOTA, as well as a Crypto10 index.

Demo Account: Yes.

Educational Material: Plus500 offers educational videos to start trading.

Fees: No trading fees, overnight and inactivity fees may apply. No fees or options for withdrawing crypto coins.

Minimum deposit: $100 if made by debit or credit card.

Special Features: Multi-language platform with live support.

Regulation: British FCA, CySec, ASIC, Monetary Authority of Singapore (MAS), Israel Securities Authority (ISA). Listed on the LSE (PLUS).

Payment methods: Debit and credit card, Skrill, PayPal, bank transfers (wire, EU-based SEPA).

  • Established licensed platform.
  • Educational materials available
  • Liquid cryptocurrencies on offer
  • No wallet or cryptocurrency withdrawals.
  • Limits on high-frequency trading.
70% of retail investors lose capital when trading CFDs with this provider.

Libertex: Low Fee Bitcoin & Crypto Trading Platform

Libertex is a simple alternative to Kraken, with a selection of well-established coins and tokens. All assets are solely traded as CFDs, avoiding the risk of holding and transferring crypto coins, as required by Kraken.

Libertex has also promised an expanded list of coins and tokens in the future. Libertex is limited to international traders, but there are no limitations on crypto asset ownership.

Owning CFDs and trading them is also a tool to avoid limitations on owning some crypto assets. Depending on the jurisdiction, owning BTC and other tokens may be illegal. Tokens have been considered unregistered securities. Libertex lists a small selection of crypto assets, but the pairs remain highly predictable. Kraken, on its side, has delisted assets and pairs with little warning.

Cryptocurrencies supported: BTC, LTC, ETH, MIOTA, XRP, OMG, QTUM, NEO, ETC, DASH, XMR, ZEC, EOS, ADA, TRON, NEM.

Demo Account: Yes, 50,000 EUR demo trading account.

Educational Material: No

Fees: 0.2% for most cryptocurrency trading operations.

Minimum deposit: €/$/£100, or 100 currency units, may vary based on payment method.

Special Features: Serving international traders not reached by other platforms or crypto exchanges.

Regulation: CySec license.

Payment methods: SEPA bank transfer, wire transfer, Skrill, Neteller, Sofort, Giropay, Trustly, iDEAL, Przelewy, MB, Rapid, TeleIngreso, Neosurf.

  • Simpler trading platform.
  • Worldwide access to cryptocurrencies.
  • Low deposit limits.
  • US traders excluded.
  • Limited cryptocurrency selection.

Forex.com: Ideal for Experienced Investors

Forex.com is one of the oldest trading platforms, dating back from 1999. In comparison to Kraken, Forex.com only lists a handful of coins and offers smaller, less risky margins. Forex.com is ideal for experienced traders, who do not demand to own crypto assets outright but speculate on CFDs price movements. Forex.com has a futures market to bet on eventual BTC price movements, based on pairings with some of the world’s leading currencies. For Kraken, the most active pairing is the BTC/USD one, with other pairs much less liquid.

Cryptocurrencies: BTC, BCH, ETH, LTC, XRP.

Demo Account: Yes, $10,000 free demo account.

Educational Material: Yes, based on trading tips articles and short courses.

Fees: Spread, Rollover, financing and fiat conversion fees, no cryptocurrency withdrawal or transfer fees.

Minimum deposit: $100 or 100 currency units.

Special Features: Multiple currency pairs for cryptocurrency CFDs.

Regulation: FCA, Investment Industry Regulatory Organization of Canada (IIROC), Financial Services Authority (FSA) Japan, ASIC, US Commodity Futures Trading Commission (CFTC), Cayman Islands Monetary Authority (CIMA).

Payment methods: Credit or debit card, wire transfer.

OUR RATING

  • Long track record dating back to 1999.
  • Worldwide fiat pairings supported.
  • Trade liquid cryptocurrencies.
  • Relatively small choice of cryptocurrencies to trade.
  • Only CFDs markets available.

How we Analyzed Kraken Alternatives

The Kraken exchange has reported $230 million in daily trading volumes. This relatively low number made us seek more liquid marketplaces. Crypto trading on unregulated platforms is also mostly anonymous, and has security concerns. Platforms like eToro remove the anonymity while offering a smoother trading experience with a well-developed trading engine. Our alternative platforms were selected based on the following factors:

  • Regulations and transparency: While Kraken is registered with US-based and European regulators, its order books and trading process are entirely unregulated. We looked at alternative platforms that offer stricter oversight in multiple regions.
  • Fees: Kraken will levy fees on a sliding scale, starting with 0.16% to 0.24% for market makers or takers. Fees will go down as volumes increase, thus making the exchange unsuitable for small-scale traders with smaller monthly turnovers. On eToro, fees will not apply for buy orders, while selling orders incur fees, though small-scale traders do not suffer a disadvantage. While eToro charges withdrawal fees, Kraken also has additional expenses, some of which take a cut of any cryptocurrency withdrawal.
  • Safety and security: We looked at the potential for losses due to technical factors unrelated to trading. In comparison to Kraken, eToro offers higher security and the potential to trade CFDs, which means no risk of hacks or cryptocurrency theft.

Final Thoughts

While Kraken is one of the more secure crypto exchanges, we sought alternatives that removed some of the technological risks. So far, eToro has not reported hacks or losses, unlike multiple crypto exchanges. Registered CFD brokers also ensure safer trading. Unlike Kraken, the alternative platforms offer a fair playground, safe from so-called cryptocurrency “whales”, which can sway the market at any one time. 

FAQs

Are there other exchanges like Kraken?

The world of cryptocurrencies saw the rise of many market operators, some claiming significant trading activity. Kraken was among the first, EU-based companies to secure a fiat gateway and operate with some form of regulation. Exchanges similar to Kraken in influence and transparency include Bitstamp and other European markets.

Why is Kraken trading riskier?

Kraken has no rules on placing orders, wash trading, or anyone selling a significant amount of cryptocurrency. To estimate risk on Kraken, one would have to track cryptocurrency transactions and possibly predict large sell-offs. Kraken has also become one of the exchanges where XRP is liquidated for fiat, thus increasing wild price swings.

Why are platforms like eToro better?

Trading on eToro happens under strict national financial regulations. With more liquid markets, eToro allows for risk mitigation through a more robust trading engine.

Is Kraken unsafe?

So far, Kraken has not reported large-scale selling. But in the past, Kraken has seen trading anomalies that brought down the price of assets and caused liquidations and losses. Trading on Kraken may be extremely unpredictable, with wash trading and spoof orders changing the direction of prices. Kraken trading volumes also diminish without warning, leading to risks from low liquidity.

What is the best alternative to Kraken for US buyers seeking lower fees?

US buyers may choose eToro to avoid inherent fees of cryptocurrency transfers (transaction fees). With no trading fees, eToro limits itself to overnight and inactivity fees, as well as spread-based schedule.

What is the difference between Kraken and trading brokerages?

Kraken is a crypto exchange and a platform offering spot trading and limited futures markets. Trading platforms offer a wider array of assets, and offer exposure to cryptocurrencies without holding the assets. The exception is eToro, which is the best of both worlds. Both CFDs and direct purchases are available.

Remember, all trading carries risk. Past performance is no guarantee of future results.
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