Kraken is a fully functional crypto exchange platform with low transaction fees and around sixty coins. It regularly added new coins to its platform – Bitcoin Cash in August 2017; Ocean Protocol (OCEAN) and Energy Web Token (EWT) were added in March 2021.
Kraken is one of the largest and oldest exchanges and one of the few cryptocurrency exchanges in the US to offer advanced trading tools like margin. Kraken has five main investment options: crypto assets, crypto assets, futures trading, margin trading, and over-the-counter (OTC) trading.
Kraken aims to be the best and most secure platform. Read on for our comprehensive Kraken review to discover its advantages and disadvantages and whether it is the right trading platform for you.
Launched just two years after Bitcoin itself, Kraken is a fully built cryptocurrency exchange platform with top-notch security, low trading fees and a range of cryptocurrencies available. It enables Kraken users to borrow or lend their coins for rewards.
Kraken was founded in July 2011 and eventually emerged as a platform to reduce the bitcoin market’s dependence on a single exchange. Jesse Powell, founder and CEO of Kraken, provided assistance to Mt.Gox, which accounted for about seventy percent of all bitcoin trading between April 2013 and early 2014, after two hacks in 2013.
Powell later launched the beta version of Kraken, and the startup began expanding into the San Francisco Bay Area, one of the world’s tech hubs.
Who Should Use Kraken
Kraken is an excellent choice for beginners who are entering the world of cryptocurrency trading. It is highly recommended due to its high-quality security protocols, low transaction fees, and broad support for various cryptocurrencies. However, investors are advised not to stay in beginner mode for too long to avoid losing huge amounts of money invested for fees on their training wheels platform.
An experienced trader may also benefit from Kraken’s wide selection of coins, margin offers, and bets. In fact, margin offerings are what sets Kraken apart from many other cryptocurrency exchanges out there. While margin and fix offerings have recently been restricted to US investors with very large amounts of assets, they are still open to investors outside of America. Advanced US traders can still benefit from the amount of Kraken’s large crypto trading markets and increasingly lower fees as trading volume increases.
However, investors need to be careful when trading on Kraken or any other platform. Do not invest money that you cannot afford to lose.
Key Features of Kraken
Kraken offers a trading platform with advanced features for individual cryptocurrency enthusiasts as well as large trading firms. It has a variety of services available (OTC trading, margin trading, account management, etc.) and Kraken account types that cover the needs of all types of traders and investors. Let’s dive in.
Kraken is fully committed to securing its platform and has taken several steps to this end. As a result, it ranks highly on CER, a website that reviews the security levels of exchange platforms.
Kraken is under regular scrutiny to demonstrate that it has the full reserves of cryptocurrency to support its operations and was the first to provide verified cryptographic proof of reserves after the implosion of Mount Gox.
Kraken offers secure coin storage, where 98% of deposits are kept offline in geo-distributed cold storage. Its servers are kept in secure cages under 24/7 surveillance by armed guards and video monitors. It also encrypts all sensitive contact information and regularly engages in testing for vulnerabilities in its system.
Kraken offers two-factor authentication. It recommends setting a Master Key to recover your account if you lose access to your login details or prevent a password reset if a hacker gains access to your account.
Kraken also recommends enabling Global Setup Lock (GSL) if you plan to hold your crypto assets on the Kraken platform for a long time. While GSL is enabled, no changes can be made to your account settings, and hackers will not be able to add new checkout addresses or change the email address associated with the account.
PGP can also be set up within your email as an extra layer of security to ensure all communications from Kraken are genuine and not phishing links.
Unlike many other cryptocurrency exchanges, Kraken has never been hacked. However, in May 2017, Kraken and Bitcoin exchange Poloniex were hit by a distributed denial of service (DDoS) attack, which resulted in huge losses for market participants.
Additionally, to encourage white-hat hackers to uncover security holes on the site and help correct them, Kraken offers a bug bounty with a discretionary reward based on the severity of the problem.
Kraken’s popularity is also due to its ease of use. While the instant buy feature can be pricey for beginners, user verification is automatic and done within minutes for most types of users (Kraken has four).
Level 1 allows you to trade in digital currencies only, which restricts the use of fiat currencies for deposit or withdrawal. Level 2 loosens the restrictions on fiat currencies, allowing you to withdraw $2000 per day and $10,000 per month, depending on which country you are in. Both Levels 1 and 2 can be verified within an hour. The higher level, Pro, requires manual review of KYC documents, which can take several days to complete. Levels 3 and 4 can take anywhere from one to five days to be verified, as it is not automated as it is at lower levels.
Kraken’s transaction fees depend on various factors, including the total cost of your order, the currency pairs you’re trading, your 30-day trading volume, and whether your order is a maker or a taker. Furthermore, if you are trading on margin, two additional fees will apply – opening and renewal fees.
The main screen indicates the transaction fees you will pay and the fees you can expect if your trading volume goes up to a certain amount.
To withdraw funds, you need to pay a fee that depends on the cryptocurrency you want to withdraw.
Finally, the Kraken app is now available in the US, with the exception of Washington and New York. Although the new app does not support credit or debit card deposit, you can use your bank account as a payment method. There is also support for instant buying.
Kraken is one of the best places to trade on margin and has introduced this feature since May 2015. Margin trading allows you to amplify your gains (as well as losses), as Kraken offers 5:1 leverage for pairs like BTC-EUR, ETH- XBT and 2:1 For XMR-EUR and USDT-USD.
The margin feature is useful for advanced traders, who can borrow money to open a position larger than their account balance and possibly increase their profits if the market moves in their favour. On the other hand, it can lead to huge losses for investors when prices drop suddenly.
Users are required to pay an overnight fee and open margin. The opening fee ranges from 0.01% to 0.02%, depending on the base currency. On the other hand, the rollover fee is a fee for maintaining or holding your trading position. They are applied every four hours and cost between 0.01% to 0.02%, with the base currency being the primary determinant.
In addition to margin trading, you can bet specific Kraken coins to receive rewards when Kraken uses those coins to verify transactions for Proof of Stake coins.
Kraken is among the most popular virtual currency trading platforms: it features margin trading, futures, various security features, and support for a wide range of cryptocurrencies.
Kraken has an excellent reputation, and clients can be confident that the exchange will do their due diligence before adding more cryptocurrencies.
On the other hand, Kraken can be quite challenging for beginners – with so many coins and so many jobs; Beginners will find it difficult to adapt. Limited initial account (level 1), slow account funding, and unsatisfactory customer support are other minor shortcomings of the exchange.