Kraken Review: A deep dive into this crypto exchange

Kraken review
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Starting your crypto journey can be especially hard if you don’t have the right information. And the most challenging part of the entire process is finding an exchange that ticks all your boxes. For crypto enthusiasts who want to give trading a try, you’re welcome to read our Kraken review. Hopefully, you’ll find them worth giving a try.

The Kraken crypto exchange is a functional, low-fee exchange that offers various coins. Moreover, it offers advanced trading tools such as margin trading that other U.S. crypto exchanges do not offer. 

In our Kraken exchange review, we’ll examine the platform’s features to see if that’s true and if it’s a good exchange for you.

Let’s get started.

An in-depth review of Kraken

Those looking for advanced features and margin trading will find this cryptocurrency exchange a good fit.

Pros

  • Ensure your security
  • A variety of cryptocurrencies
  • Features for advanced traders
  • A reasonable fee structures

Cons

  • It is not suitable for beginners
  • The starter account is limited
  • A slow funding processes
  • Unsatisfactory customer service
  • Tax support is not available

Top Benefits

Kraken has established itself as an excellent cryptocurrency exchange for almost a decade. There are a lot of positives to this option.

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MIN. DEPOSIT

$250

EXCL. OFFER

USER RATING

9.8

4.9/5

73% of retail investor accounts lose money 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.

MIN. DEPOSIT

$50

EXCL. OFFER

USER RATING

9.7

4.8/5

CFDs are complex instruments and carry a high risk of losing money quickly through leverage. 78% of retail investor accounts lose money when trading CFDs from 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.

MIN. DEPOSIT

$250

EXCL. OFFER

USER RATING

9.3

4.5/5

CFDs are complex instruments and involve a high risk of losing money quickly because of the leverage effect. 65.3% of retail investor accounts lose money 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.

Security

Kraken is one of the oldest in the world. It was launched in 2013 after being founded in 2011. It has always prioritized security. Despite its longevity, it has never been hacked.

In terms of security, the U.S.-based exchange is in the lead. This exchange ensures physical and financial security. Plus, it helps users adopt healthy security practices.

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Various cryptocurrencies

Kraken deals with seven different fiat currencies and almost 60 different cryptocurrencies. Although this is not the most extensive selection of digital currencies, it’s comparable to some of the most popular cryptocurrency exchanges. It’s also an improvement over many brokers who only offer a few well-known coins. Kraken has a high level of liquidity, making it easy to buy and sell at a fair price.

As Kraken uses currency pairs, not all of its currencies are interchangeable. But what is a currency pair? For example, you want to exchange dollars for euros during your vacation in Germany. That’s what a currency pair is. Whether you buy Bitcoin for dollars or Ethereum for Bitcoin, it is always a trade-off between currencies.

A trading platform with advanced features

Kraken is among the few exchanges that offer crypto short sales, margin, and stop orders. Additionally, it has a dark pool where high-volume investors can conduct anonymous trading. For eligible clients, Kraken offers a margin facility of up to $500,000 and enables traders to leverage a currency pair by up to 5x. Margin trading is risky, so you should do your research. It involves borrowing money to invest.

Consider an investment of $100 in Ethereum. Say you use a 5x margin. When Ethereum appreciates, you will gain five times as much. You will also lose money if Ethereum loses value. Investing in cryptocurrencies is already risky, so using margin raises the risk exponentially.

A reasonable fee structures

As for Kraken’s fees, they are comparable with several exchanges. While it is not the cheapest, its maker-taker fees are lower than other exchanges. The amount of money you trade each month determines your trading fee, which varies from exchange to exchange. Make sure you consider how much it will cost you to deposit and withdraw funds and how much you’ll pay per transaction.

Areas that Kraken could improve

It is not suitable for beginners.

Kraken has various educational resources available if you are new to cryptocurrency trading. For example, you can view currency guides and watch explainer videos. This site, however, is designed for more experienced traders because it has numerous advanced features. Due to a large number of coins and many functions, beginners will find it difficult to get used to it.

The starter account is limited.

In Kraken, you can choose from three account levels: starter, intermediate, and pro. You won’t be able to do much with the starter account because you need to submit a photo ID to get one.

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As a user, you may find that frustrating. Kraken uses it to make their system more secure and to offer these advanced features.

A slow funding processes

Using FedWire, you can deposit dollars once your account has been verified and provided with your ID. You cannot deposit using a credit or debit card if you live in the U.S. Deposits made in fiat currency can take up to one week to process.

Depositing coins will take about five minutes if you have a starter account. There are resources available for transferring funds from another exchange in Kraken.

Customer service

An easy-to-navigate help center and 24/7 customer service are two key features of this crypto exchange. Unfortunately, it doesn’t score very well on Trustpilot. 

Reviews can be difficult to verify for sure, but you should put your trust in the people you’re transferring your money to. Many customer reviews complain that money didn’t reach their accounts, and customer support didn’t respond.

Here are some alternatives to consider

Those interested in diving into the crypto waters: Robinhood offers a limited number of cryptocurrencies and low-cost stock and ETF trading.

A popular and easy-to-use exchange is Coinbase, which lets you pay by debit card. You can transfer cash electronically or pay with your debit card with this service.

How Kraken works

The Kraken exchange is purely crypto based. Also, it does not provide loans or savings accounts, and a wallet is not even available.

The exchange can be accessed online and is centralized. There is no U.S. app for it yet. We have discussed that Kraken offers margin, stop orders and crypto short sales to qualified users. 

If you leave the currency in your account, you can earn interest on it.

Providing essential information, such as your name, date of birth, and address is required to set up a basic account. You must be 18 and live in a supported area (except Washington, DC, and New York).

Each level of verification is as follows:

  • Starter: In this basic account, you can deposit, exchange, and withdraw bitcoins, but that’s all you can do. To move dollars into crypto, you will need to upgrade your account.
  • Intermediate: If you wish to upgrade to an Intermediate or Pro account, you must provide a valid ID, SSN, and proof of residence. Using Kraken, futures will be available once you upgrade and can deposit fiat.
  • Pro: A Pro account can unlock higher account limits, an over-the-counter desk, and a “dark” trading pool. The desk facilitates large orders on the public exchange without causing price fluctuations.
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The fee structure below explains how to fund your Kraken account. The U.S. Kraken platform does not accept debit or credit cards for purchases of cryptocurrencies. It typically takes five days to process payments.

Fees 

Like many exchanges, Kraken charges maker-taker fees. It offers discounts to traders with large volumes.

Deposit and withdrawal fees for cryptocurrencies depend on the currency. For example, with a minimum deposit of 0.00050 BTC, you can withdraw Bitcoin for 0.00015 BTC.

Also, there are three types of fees, which include:

  • Funding fees
  • Maker-taker fees
  • Stablecoin and FX pairs

Cryptocurrency selection

Kraken offers a variety of cryptocurrencies. Nearly 60 coins are available for U.S. traders, including popular coins such as Bitcoin, Ethereum, and Cardano. It supports seven different fiat currencies and three stable coins.

Can you trust Kraken with your cryptocurrency?

Kraken’s guiding principle is security. There have been no hacks since it launched in 2013, and it is generally considered one of the most secure cryptocurrency exchanges. However, cryptocurrency security is controversial, and any exchange can be vulnerable to hacks. Here’s how Kraken handles security.

Coin storage: According to Kraken, 95% of its crypto assets are kept in cold storage (offline and protected against hacks). It also boasts total reserves and has been audited by an outside firm to prove its reserves.

Platform and information security: Physical servers are monitored on a 24-hour basis. Encryption is used at both the system and data levels.

Security testing: As part of its bug bounty program and internal team, Kraken conducts ongoing penetration tests on its systems. A bug bounty program encourages ethical hackers to find and report bugs.

User security features and education: It has two-factor authentication, secure emails, and security locks. Kraken’s site points out that “no amount of security can compensate for inadequate personal security.” Furthermore, the site teaches users how to protect themselves.

Kraken is a suitable choice if:

  • If you’re a seasoned trader and want to take advantage of the margin.
  • You’re an investor eager to increase your coin collection and features.
  • You prioritize security over usability and want to keep your money safe.

Conclusion

If you’re looking for a crypto exchange that has everything you’re looking for, you’ll not be disappointed to check out Kraken. But while at it, take some time to consider some of the platform’s biggest drawbacks and see if they are things you can deal with. If not, you can explore other popular crypto exchanges like Binance, Coinbase, Crypto.com and more.

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