Kraken and Coinbase are two of the most well-known exchanges for buying, selling, and trading cryptocurrencies online. So, how do these two crypto exchanges compare with each other and which one is better?
Kraken Vs. Coinbase – Clash of the Titans
If you’re new to the world of cryptocurrencies, you should know that it’s super important that you choose the best exchange for you. Remember, everyone is different and that the best choice for you will depend on what you are looking for in an exchange.
Our goal isn’t to endorse one of these exchanges over the other. It’s to provide you with as much information as possible about each option to help you make an informed and educated decision.
So without further ado, let’s take a look.
The Kraken cryptocurrency exchange is one of the older and more popular digital currency exchanges. The exchange was founded in 2011 and was publically launched in September 2013. Over the past seven years, Kraken has developed a strong reputation as a secure and safe crypto exchange.
Currently, Kraken is the world leader in both Euro and Bitcoin trading volume. This means that if your preferred fiat currency is Euros, then the exchange will offer you more liquidity than other exchanges. Another benefit of Kraken is that it supports more fiat currency pairs vs Coinbase. Traders are free to hold balances and buy crypto directly with Euros, US Dollars, Canadian Dollars, British Pound and Japanese Yen. With this wider range of supported fiat currencies, it might not be surprising to know that Kraken appeals to a global customer base.
The exchange is lead by CEO, Jesse Powell, and is based in San Francisco. Less than a year after its public launch, Kraken became the most traded exchange by Euro trade volume. In 2013, Kraken also became the first exchange to have Bitcoin price stats listed on Bloomberg Terminals. The connection with Bloomberg shows the high regard the Kraken exchange is held in versus other exchanges. That’s not all, the exchange launched the first exchange audit system which utilized verifiable cryptographic proof of reserves. This demonstrates the forward-thinking nature of the Kraken team and is certainly a major factor behind hundreds of thousands of customers choosing the platform over competitors.
Kraken’s solid reputation, extensive fiat currency support and focus on security has made it one of the most popular exchanges around. For high net-worth clients, Kraken also offers over the counter trading. This means that large buy or sell orders can be processed off-exchange at a fixed price.
Account Creation and Verification
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Creating an account at Kraken is relatively straight-forward and easy. We show you all the steps in our detailed Kraken walkthrough.
However, you should be aware that every crypto exchange that accepts fiat currency deposits will require verification to use the account. With Kraken there are five levels of verification. Passing each level will unlock more features and enable you to do more with the account.
To unlock fiat currency deposits, you will need to verify to level two. To do this, users must create a Kraken account and provide the exchange with your full name, date of birth, phone number, country of residence and provide a document to verify your address. Once this is done, the following features will be unlocked on the exchange:
- Fiat currency deposits: $2,000 daily and $10,000 monthly limits.
- Crypto deposits: Unlimited.
- Crypto withdrawals: $5,000 daily and $50,000 monthly limits.
- Margin trading: This feature is also unlocked at level two of verification.
You can upload verification documentation and information under the “Get Verified” tab in your Kraken account. The time it takes to get verified depends on the number of current applications in the process. However, this usually takes anywhere from a few days to a week.
Once your account is verified to level two, you can then go about funding it with fiat from your bank account. You should also know that bank wires and transfers are the only accepted deposit methods on the Kraken exchange.
Deposits, Trades, and Fees
Making deposits and trades, along with types of fees, are different for each cryptocurrency exchange. Here’s a look at what you can expect when dealing with Kraken.
Make your way over to the “Funding” tab, then choose which method you’ll use to deposit funds. You can select bank transfer or wire, or you can transfer funds in using a cryptocurrency wallet.
After you’ve funded your account, you can choose the “Trade” tab, then find “New Order.” Once that’s done, select which digital currency you want to buy, along with your payment currency. Choose the amount of crypto you want to buy or sell, then select limit or market order. When you press the green confirmation icon, your trade will be executed.
Deposit & Withdrawal Fees
Kraken has a variety of withdrawal and deposit options, that attract different fees. Here are the fees for different deposit options:
- CAD Wire Deposit – Free, EFT Withdrawal – $10 CAD fee.
- EUR Wire Deposit – €10 (outside the US).
- EUR SEPA Deposit – Free, Withdrawal – €0.09 (EEA countries only).
- JPY Bank Deposit – Free, ¥5,00 minimum deposit, Withdrawal – ¥20 (Japan only).
- USD Wire Deposit – $5 USD, Withdrawal – $5 USD (Within US).
- USD Wire Deposit – $10 USD, Withdrawal – $60 USD (Outside US).
In addition to fiat deposit and withdrawal fees, there are also fees associated with crypto transfers too:
- Bitcoin – Deposit is free, Withdrawal is 0.001 Bitcoin.
- Bitcoin Cash – Deposit is free, Withdrawal is 0.001 Bitcoin Cash.
- Ethereum – Deposit requires a small transaction fee, Withdrawal is 0.005 Ether.
- Litecoin – Deposit is free, Withdrawal is 0.02 Litecoin.
- Ripple – Deposit is free, Withdrawal is 0.02 Ripple.
The majority of trades and transactions on Kraken fall under $50,000 in volume. This means that almost everyone will be paying a Kraken maker fee of 0.16% or a taker fee of 0.26%. These fees will apply for any Bitcoin trades made with any fiat currencies supported by the exchange.
If you’re trading more than $50,000 in volume per month, the fee drops down to 0.14% for makers and 0.24% for takers. As the volume increases, the percentage of the fees decrease. For trading activity greater than $10,000,000, the fees are 0% for makers and 0.10% for takers. Fees are charged on each trade, and the site uses a 30-day period to determine trading volumes.
Account Verification Limits
Kraken uses a tiered system for trading limits, which allows certain users to perform a certain amount of transactions on a daily and monthly basis. For instance, users in Tier 0 only have the ability to look through the exchange. They do not have permissions to withdraw or deposit funds or make trades.
Users in Tier 1 can withdraw and deposit cryptocurrencies and trade in both fiat currencies and cryptocurrencies. Tier 1 offers no deposit limit, however, crypto withdrawals have a daily limit of $2,500 and $20,000 a month.
Tier 2 users unlock the ability to withdraw and deposit fiat currencies. These users have deposit and withdrawal limits of $2,000 each day and $10,000 a month for fiat currencies. However, their cryptocurrency withdrawals are limited to $5,000 a day and $50,000 a month. Margin trading is also unlocked.
Those verified to Tier 3 have further enhanced limits and can deposit/withdraw $25,000 in fiat currency each day and $200,000 a month. Digital currency limits are also raised to $50,000 a day and $200,000 a month.
Tier 4 users are allowed the highest funding limits on the exchange. Kraken recommends that Tier 4 users reach out to support to clarify requirements for daily and monthly deposits and withdrawals. This level of verification is only required for very high net-worth people or corporate accounts.
Kraken supports popular digital currencies like Bitcoin, Ethereum, Bitcoin Cash, Dash, Monero, Ripple, Litecoin, and Ethereum Classic. Something to keep in mind when using the site is that Kraken uses XBT as the abbreviation for Bitcoin instead of the usual BTC. In total, 17 different cryptocurrencies are available to trade on the exchange.
Trading pairs supported for margin trading by the exchange include REP/XBT, REP/EUR, REP/ETH, ETH/XBT, ETH/EUR, ETH/USD, ETC/XBT, ETC/ETH, ETC/EUR, ETC/USD, XBT/USD, and XBT/EUR.
Users want a platform that they know is safe and secure. The good news is that Kraken is one of the few exchanges that can boast about not being hacked. We can only think that Kraken’s extensive internal security has played a major role behind this track record and we are sure that security standards will be updated as new threats emerge.
Perhaps the most secure feature Kraken employes are its cold storage wallets. Simply put, this means that the majority of funds held by the exchange are stored in wallets disconnected from the internet. This means that funds stored by the exchange are less likely to be hacked.
In addition, all data on the Kraken platform is encrypted and updated daily. The exchange also separates its client data from its internal network, which means staff can only view your account information for verification purposes and nothing else. Kraken also keeps extensive reserves of fiat currency in their accounts so that the exchange can process all customer withdrawal requests.
User accounts are required to use two-factor authentication for verification. This added layer of security helps to protect a user account if someone is able to get hold of a password without permission. Kraken also offers an option for users to use a global settings lock on their account. This feature prevents changes to an account and hides sensitive user information for a specified period of time.
For customer support, Kraken offers a ticketing system to answer customer questions. However, users have experienced delays with account verification. Aside from this issue, we think Kraken does a great job when it comes to customer support.
If you need to get an answer to a query right away, Kraken does give you a live chat option on your account dashboard. Live chat support is available 24/7, which means no matter what time zone you are in you will be able to speak to someone about it. If you like phone support, then just be aware that Kraken doesn’t offer this. If this support method is important to you, it could be a key reason for choosing Coinbase over Kraken.
Pros and Cons Of Kraken
- Supports fiat bank deposits.
- Offers margin trading.
- Secure and reputable exchange.
- Supports 17 different cryptocurrencies & 5 fiat currencies.
- Excellent user account protection.
- Lack of phone support.
- Account validation can take a while.
- Ticketing response times can be slow.
Coinbase is perhaps the most popular and well-known cryptocurrency exchange out there. It has a user base of over 25 million people and operates in over 30 countries. This reliable and highly rated platform launched in 2012. Just like Kraken, Coinbase is located in San Francisco.
Unlike other exchanges, Coinbase gives its users the ability to trade at a set price based on the current market value of the crypto. This means users can purchase their digital currencies quicker than they could on other exchanges where orders need to be matched on the exchange itself.
Account Creation and Validation
Creating a Coinbase account is relatively straightforward. However, if you want to be guided through the process we have a walkthrough for that.
Once you’ve got your account set up, the next step is to add a payment method. Coinbase allows its users to select from two methods of payment: a bank transfer or by using a credit/debit card. If you choose to use a bank transfer, Coinbase will quickly verify your information with a small transaction to and from your account.
If you decide to go with a credit/debit card, the Coinbase will request a photo of your card. Bank transfers are the cheapest deposit method on Coinbase. However, deposits can take up to five working days before hitting your account. Debit and credit card deposits happen immediately but are significantly more expensive in terms of fees.
Once you have your account verified and funds loaded, you can begin buying cryptocurrency. Make sure you’re on the ‘Buy/Sell’ tab in your account and that have selected the cryptocurrency you want to buy.
Before the transaction is processed, Coinbase will give you a breakdown of the fees and show you the amount of cryptocurrency being purchased. Once everything is confirmed, your crypto will immediately be credited to the relevant wallet on Coinbase.
Fees and Limits
Coinbase deposit fees range anywhere from 0% to 3.99%. These charges depend on your method of payment and the country you are depositing from. The cheapest way to deposit on Coinbase is via bank transfer. So if you’re happy to wait a few days for funds to hit your account, then this is going to be your best option.
In terms of trading fees, Coinbase charges a flat fee of 1.49%. This means the cost to buy $100 of any cryptocurrency will be $101.49.
At this time, Coinbase users can only purchase Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Ethereum Classic and 0X. The platform has announced that it plans to add additional digital currencies in the future. However, if a wider cryptocurrency selection is what you’re after, then do consider using Kraken.
Limits on transactions will vary based on verification status, deposit method, and country of residence. Coinbase does have a page on the site which allows users to view their limits, so if you’re curious, you can find the information there.
Users can apply for higher limits on Coinbase, however, you should keep in mind that these types of applications don’t apply to credit card transactions. If you decide you want to move forward with applying, Coinbase will ask that you verify your identity. Once approved, US residents have a limit of $50,000 a week, while European users typically have a ceiling of $30,000.
Coinbase makes it easy to send, receive, and store cryptocurrency on its site. This is what makes it great for those new to cryptocurrency. If you want to store or send your cryptocurrency, just head over to the “Send” tab on your account. Select which wallet you want to send from and input the amount. Once that’s entered, just type in recipient’s public key, press send, and you’re done.
Receiving cryptocurrency is just as easy. Head over to the Accounts tab, and select the wallet you want to use to receive the funds. Then hit the Receive button to get the wallet address you can share with the sender. Once you provide that information, the sender can then send you your funds, which will show up in your wallet when they do.
Due to issues that have been reported with some cryptocurrency exchanges, the perception is that using these platforms is still a risky proposition. If you’re one of these people, Coinbase should help put your mind at rest. It is considered by many as one of the most secure exchanges available.
For starters, Coinbase is based in the United States, which means it has to adhere to all Federal and State laws. By comparison, some exchanges based in other countries do not face the same restrictions and regulations that Coinbase must comply with. Customer funds are also insured and segregated. US customers are insured for balances of up to $250,000.
Additionally, the exchange has investments from high-profile investors. These include BBVA and the Bank of Tokyo, which help to boost the legitimacy of Coinbase. After all, if Coinbase is good enough for the Bank of Tokyo, it’s probably good enough for you.
Coinbase makes an effort to be as transparent as possible when it comes to storing funds. Like Kraken, Coinbase separates its company funds from its user’s funds. The platform itself has publically announced that if the company becomes insolvent, neither Coinbase nor its creditors have rights to user funds.
From a cryptocurrency storage perspective, Coinbase says that it stores 98% of user’s digital currency offline. This could be through paper wallets stored in vaults, hardware wallets, or the use of safety deposit boxes. Additionally, Coinbase says that the cryptocurrencies that are stored online are insured. That way, if a hack occurs, customers will be fully reimbursed for any funds that are lost or stolen.
Users on Coinbase can use 2-factor authentication to provide an additional layer of security to their account. This can be done through third-party applications like Googe Authenticator or through an SMS sent to your smartphone. Coinbase also sends a notification to a user if a new IP address or device attempts to access an account.
Keep in mind, however, that if your account is compromised, Coinbase will not be held liable for any funds lost. Because of this, the best thing you can do is store any cryptocurrencies you have purchased in an offline wallet that you have control over.
Users can access Coinbase customer support via email or through an FAQ and Knowledge Base. Wait times are varied, however, there has been a recent increase in demand, so you may experience some delayed responses.
Typically, response times range from 24-72 hours. Some users, however, have expressed frustration over canned responses that don’t address the issue properly.
Coinbase Pros and Cons
- The biggest crypto exchange in the world.
- Great for beginners.
- Insured deposits.
- High liquidity.
- Mixed reviews with customer service.
- Limited cryptocurrency selection.
- Limited deposit options.
Coinbase Vs Kraken Comparison Table
To help you make your choice here’s a high-level comparison chart of how Kraken vs Coinbase stack up against one another.
|Deposit Fees||Very low for bank deposits & high for card||Low|
|Cryptocurrencies||Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ethereum Classic & 0X||Bitcoin, Ethereum, Bitcoin Cash, Dash, Monero, Ripple, Litecoin, Tezos, and Ethereum Classic|
|Buy/Deposit Methods||Credit and Debit cards, Cryptocurrency, Bank transfers||Cryptocurrency, Bank transfers|
|Sell/Withdrawal Methods||Bank transfers, Cryptocurrency, Paypal||Bank transfers, cryptocurrency|
|Supported Fiat Currencies||CAD, EUR, GBP, SGD, & USD||EUR, USD, CAD, GBP & JPY
|Customer Support||Email and FAQ/Knowledge base, Phone in US and UK only||Email and Chat|
|Made Your Choice?||Sign Up To Coinbase||Sign Up To Kraken|
Both of these exchanges are excellent options for anyone wanting to enter the cryptocurrency markets. For those new to cryptocurrency, Coinbase is probably the better choice. The site is easy to use and navigate, and there isn’t a lot of confusion or complexity involved in buying or selling digital currencies. It is this focus on simplicity which has propelled Coinbase to being the most popular crypto exchange on the planet.
If you’re comfortable with crypto, then you might want to give Kraken a try. Their advanced trading options and lower fees are a good way for those interested in crypto trading to take the step up to the next level without getting in too deep too quickly.