Kraken, one of the first exchanges on the scene in 2013 when only Bitcoin was traded, still calls itself the “bitcoin exchange.” Today with 20 cryptocurrencies and 76 crypto-crypto/fiat pairs currently traded, Kraken has grown into a full-fledged cryptocurrency exchange. Investors now have many more exchanges to choose from, though, including regulated exchanges. But Kraken can make a claim few others can – the exchange has never been hacked.
Has Kraken saved the reputation of crypto exchanges by proving that a deregulated exchange can be safer than a regulated one? We have conducted an in-depth review of fees, features, and pros and cons to determine if Kraken’s self-regulatory model can compete with regulated exchanges. We found that Kraken still has several hurdles to jump to fully satisfy investors and regulators. This detailed review evaluates how Kraken’s cryptocurrency trading platform is meeting the trading and security needs of its retail and institutional traders.
Kraken is a crypto-to-crypto and fiat-to-crypto exchange developing a safer, fairer trading system with digital ledger technology. The secure exchange has become one of the most popular places to buy cryptocurrency as investors have become more concerned about the increase in cryptocurrency scams and frauds. Like the Coinbase exchange, also based in San Francisco, Kraken launched in the aftermath of the Mt. Gox hacking in 2011 with a vision to build a better crypto exchange. Bitcoin trading was launched in 2013. The bitcoin exchange added the ability to buy Ether in 2015 and quickly became the second largest exchange for trading bitcoin-ether pairs. Kraken contends its transparency, irreversible transactions and programmable enforceable contracts provide more consumer protections to safeguard trader assets than regulated exchanges.
Kraken’s impressive security record is an advantage as it seeks to attract banks, hedge funds, pension funds and other traders with deep pockets to its institutional business. These large traders can now trade directly with each other on Kracken’s new over-the-counter service. The recent acquisition of UK-based Crypto Facilities has added cryptocurrency derivatives and indices – key risk management tools for professional traders. In addition to Bitcoin and Ether, traders can now buy Ripple futures – the top three coins – as well as Litecoin on Kraken. Kraken has a market cap of USD 37 billion and is the 57th largest listed exchange on Coinmarketcap.com
Kraken is a centralized cryptocurrency exchange (CEX) seeking to provide the security standards of a decentralized exchange (DEX). Since a DEX does not hold user funds, data or personal information it is less susceptible to hacking. Following the hacking of New Zealand’s Cryptopia, Kraken CEO Jesse Powell has advised traders to store their funds offline in hardware and non-custodial wallets, and to manage their own private keys. Only funds needed for trading should be in a Kraken trading account, advises Powell. If you want to trade fiat currency and withdraw more than $5,000k in crypto daily you will need to provide ID for verification on the Kraken exchange. The exchange is open 24/7.
The following crypto-to-crypto and crypto-to-fiat pairs are available to trade on the Kraken exchange.
Kraken is a US-based cryptocurrency exchange offering cryptocurrency trading globally.
If you are a citizen of these countries residing in an approved country, you can proceed with the registration process.
At this time, Kraken does not offer service to residents of:
Washington state (WA)
New York (NY)
Trading fees for buyers (makers) and sellers (takers) decline on a siding scale based on increasing trading volume. Deposits in most cryptocurrencies are free. USD wire transfers are $5. Withdrawal fees vary by cryptocurrency.
|30-day Volume||Maker (Buyer)||Taker (Seller)|
|$0 - $50,000||0.16%||0.26%|
|$50,001 - $100,000||0.14%||0.24%|
|$100,001 - $250,000||0.12%||0.22%|
|$250,001 - $500,000||0.10%||0.20%|
|$500,001 - $1,000,000||0.08%||0.18%|
|$1,000,001 - $2,500,000||0.06%||0.16%|
|$2,500,001 - $5,000,000||0.04%||0.14%|
|$5,000,001 - $10,000,000||0.02%||0.12%|
Kraken has a redesigned trading dashboard with some spiffy new features. The trading interface is somewhat cluttered but it is not too complex to master. Like any trading system, the novice trader may choose to ignore the trading tools they do not currently use, but may use one day. Under settings (top right), you have the choice of 13 colour schemes, which you can change with one click. We have tested a few of them in this tutorial.
The current active currency pair (1) is shown top left. The pricing chart (2) can be expanded to the full size of the screen. To the right of the chart are basic drawing tools and, for fans of Fibonacci, Fibonacci extension and retracement tools. The order book displays the bid and ask prices (4). The trade history and a watch list may be displayed below. The depth of the market shows the supply and demand at different price points (3). Optionally, the order entry form can also be displayed.
A convenient feature is the ability to view and change the parameters for all chart overlays (1) (such as moving averages and Bollinger bands) and trading indicators (2), which are displayed here (3), on one screen. Click on a cryptocurrency pair under the Watch List (4) and it will display in the price chart with the preset indicators.
Kraken also provides access to:
CrytpoWatch – Real-time cryptocurrency market data, charting and trading services accessed via API links to over 700 markets available on 25+ exchanges. Traders can visualize and place trades.
Dark Pool – Any level of trader may also place a Dark Pool trade. A dark pool trade, typically used by large traders, is not visible to the rest of the market. The minimum dark order size is 50 XBT / 2500 ETH. Fees range from 0.20% to 0.36% (0.20% more than normal limit orders), and adjust downward according to trading volume.
How to Buy Cryptocurrency on Kraken: Step-by-Step Tutorial
Signing into your Kraken account takes you directly to your trade order and balances page. Click on Trading Tools and the Kraken Pro dashboard pops up.
Trade cryptocurrency on Kraken
Step 1: Register your account
Before you can trade, you need to register with Kraken. The extra security on Kraken starts with the sign up page. Enter your email, username and password. You will also have the option of creating a Master key and PGP public key. Grab the verification code from the sent email and copy it onto the verification page to complete the sign up. You will then be prompted to set up two-factor identification through an authenticator app or Yubikey hardware device.
Step 2: Verify your identity
Before you can begin trading, you need to verify your ID at one of the three above levels. A phone number provides basic account access up to a $5,000 daily withdrawal limit. To trade fiat, you need to upgrade to Level 2 and ID verification.
Step 3: Fund your account
Choose from bank transfer or cryptocurrency deposits.
Step 4: Buy cryptocurrency
Three types of order forms are provided: Simple, Intermediate and Advanced. The Simple order form is shown below. Traders can choose between a Market and Limit order.
The advanced order form is shown below. Making the effort to learn how to use Stop-Loss and Trailing Stops is time well spent. These trading tools help you limit your trading losses.
In this example, the trader has used the depth of market to determine what price to enter the market at. Once the price is clicked, more detailed Buy/Sell price information is provided.
Step 5: Withdrawal your funds
The withdrawal process is simple and will require a deposit address if withdrawing to a cryptocurrency wallet.
Kraken is not a regulated exchange. The exchange is one of the most visible supporters of a self-regulatory model for cryptocurrency exchanges. It belongs to the Federal Reserve’s Data Asset Transfer Authority (DATA) and Japan Authority of Digital Assets (JADA). In 2018, the exchange stopped operating in New York State after failing to apply for the required BiLicense for digital asset exchanges.
Is Kraken safe?
Kraken operates under a self-regulatory model while stating it is cooperating with regulators on the future regime for digital asset exchanges. Kraken contends traders are better protected by the following security measures:
🔐 Secure exchange with no hacking incidents
🔐 Cold storage wallets with no internet linkages
🔐 Large fiat reserves and cryptographically verifiable proof-of-reserves audits
🔐 High security for encrypted data in data centres
🔐 Individual account holders can optionally activate:
– Two-factor verification
– PGP (Pretty Good Privacy) email encryption
– Master account lock
Kraken has a good reputation in the cryptocurrency trading world, and an almost mythic security reputation for its ability to fend off hacking attacks. If Kraken does get hacked, the unlicensed exchange does not have deposit insurance.
Kraken does not offer a digital asset wallet.
📱Does Kraken have an app?
Kraken does not offer an IOS or Android app.
Have a question on how to use Kraken? Here are the best places to start.
Support FAQs – FAQs are provided on all aspects of the Kraken trading platform, from simple to advanced trading, including how to use futures trading, the Dark Pool and CryptoWatch. Unfortunately, the trade interface guide uses the old not new trading dashboard, and therefore is of limited use.
From the trading screen, click on support in the bottom righthand corner to access:
Email support – Contact Kraken by email through Submit a Request.
Kraken Live Chat – Chat directly with a customer service representative.
Kraken Pros and Cons
Why We Recommend eToro Over Kraken
Kraken has grown from an exchange offering bitcoin trading to a top US crypto exchange catering to retail and institutional traders. As the exchange adds more services for institutional traders, are its loyal retail traders being ignored? Crypto wallets and apps popular with retail traders, for example, are not offered. More services are being offered to the institutional crowd, including OTC trading, advanced order entry options, a dark pool, and crypto derivatives and indices. These services are also open to the retail trader, but novice traders seldom use these tools, even if the fees are low.
As Kraken expands into advanced trading services to court large banks, hedge funds and pension funds, we are not convinced it remains one of the better exchanges for the non-professional trader. The new more complex trading interface could be distracting to the average trade. With no updated tutorials on how to use the new interface, Kraken’s current retail customer base could quickly become disenchanted.
Retail traders may turn to more intuitive exchanges for a supportive trading platform. eToro, for example, was built for traders who want to improve their trading skills. Traders learn by copying the trades and portfolios of successful peer traders on the social trading platform. The exchange has established itself as a leader in social trading, and reputable and trusted broker among traders since it launched in 2007.
Here is why we think eToro is the better platform:
✅ Regulated by multiple jurisdictions globally, including the FCA, CySec and ASIC
✅ Leading social trading platform to develop trading skills
✅ Top performing traders easily copied with CopyTrader™️ and OneClick trading
✅ Top performing cryptocurrency portfolios by theme easily copied with CopyPortfolios™️
✅ Secure multi-currency wallet granted a Distributed Ledger Technology (DLT) licence from the Gibraltar Financial Services Commission (GFSC)
✅ Trading tips from social feeds
✅ Low fees
✅ Good educational resources
66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Kraken has a popular following among traders who believe an unregulated and, ideally, decentralized cryptocurrency market will provide the fairest and safest trading environment. With crypto exchange hackings on the rise, Kraken’s security record is its own best testimonial. The exchange is making big investments in trading tools for institutional crypto investing, but will the average trader stick around? A new report from Binance finds only 7 percent of crypto assets are held by institutions. Kraken is readying for the pick up in institutional crypto trading, but one does wonder, should Kraken be doing more to make its retail traders happy?
The retail investor may prefer a regulated exchange with more basic trading tools. After all, retail traders do not have the sophisticated in-house risk management systems of banks and hedge funds. Crypto wallets and apps are important to the mobile trader on the go. The new eToro wallet allows traders on the popular social trading platform to store their private keys and assets with eToro. The multi-signature wallet holds private keys in three secure environments. Or investors can take control of their private keys and transfer their assets into their own cold storage. The eToro wallet, a global platform regulated in multi-jurisdictions, is regulated by the Gibraltar Financial Services Commission as a distributed ledger technology (DLT). Also check out our eToro review for ways to diversify risk across a portfolio of cryptocurrencies or multi-assets.
A trader is exposed to higher risks when trading on an unregulated exchange. If you lose money on an unregulated exchange due to fraud, it will be more difficult to seek remedy through a legal or insurance claim. On a regulated exchange and trust company like Kraken, the investor has more protection against loss. If the broker you have deposited money with goes bankrupt, for example, the US FDIC or UK FCA provide deposit insurance.
Dark pools are legal in the United States and United Kingdom, and many other countries. Dark pools are private exchanges where large traders anonymously exchange large blocks of shares. The lack of transparency allows large traders to buy or sell large amounts of securities or derivatives without tipping off the market by placing the order in a public order book.
A decentralized exchange does not use an intermediary to hold customer funds and accounts. Peers trade directly amongst each other (peer-to-peer) and funds are transferred between their cryptocurrency wallets. Trader money and ID are at lower risk of being hacked. A downside of DEXs is their current lack of liquidity.
A centralized exchange accepts and holds users’ deposits. Most exchanges also conduct ID verification to comply with know your customer (KYC) and anti-money laundering (AML) rules. As a repository of client money and personal identification information, exchanges are at a high risk of cyber hacking and theft.
Hot (online) crypto assets do face risk from cyber hacking. Cold storage involves storing your crypto assets offline on a USB drive or paper wallet, for example. The following risk measures should be taken to protect your hot and cold crypto assets:
☑️ Generate and store your private keys offline
☑️ Use two factor authentication to access your wallet
☑️ Use biometric identification
Through CryptoWatch, you can trade over 700 markets on more than 25 global exchanges. The two ways to access CryptoWatch are:
1. Connect from the main trading screen. Click the blue Connect button on the trade screen and Login.
2. Connect from the orders page. Navigate to Trade > New Order > New Charting & Trading Tools.
More trading bots – automated preprogrammed trading algorithms – are being developed for cryptocurrency trading. The most common way of connecting a trading robot to a cryptocurrency exchange is an API. In contrast to many of the plug-and-play bots used in forex trading, APIs may require some technical knowledge to configure. Proprietary and popular bots can be connected to the Kraken exchange through an API. New trading bot models are emerging. eToro, for example, has a OneClick™ approach to copying trading strategies. Its CopyTrader™ and CopyPortfolios™ tools can copy a whole portfolio, the most recent trade or a stop-loss of other traders in one click, allowing investors to instantly copy the trading strategy of popular traders.
- 1 🌟 Is Kraken recommended?
- 2 What is Kraken?
- 3 How does the Kraken exchange work?
- 4 What cryptocurrencies does Kraken support?
- 5 Supported countries
- 6 Fees & limits
- 7 Kraken Dashboard
- 8 How to Buy Cryptocurrency on Kraken: Step-by-Step Tutorial
- 9 Is Kraken regulated?
- 10 Is Kraken safe?
- 11 Is the Kraken wallet safe?
- 12 📱Does Kraken have an app?
- 13 Is Kraken customer service reliable?
- 14 Kraken Pros and Cons
- 15 Why We Recommend eToro Over Kraken
- 16 Conclusion
- 17 FAQs