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Kraken Alternatives: 4 Better Cryptocurrency Exchange Platforms

Discover four alternatives Kraken with better security, stricter regulation, and a better trading experience.

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.

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.


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. The best 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.

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