May 24, 2022

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Kraken Review 2022 | NextAdvisor with TIME

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Kraken is an all-around decent exchange, as it’s accessible to beginners but can scale to more advanced investors/traders, and you can trade more than 65 cryptocurrencies. The exchange says it prioritizes security and maintains dedicated protection for your investments. 

Kraken claims to be one of the first exchanges to offer spot trading on margin and other advanced products. Unlike many other exchanges, it does not offer a wallet option. The platform is unavailable in New York and Washington states, and other areas may have restrictions. It was founded in 2011 and launched in 2013. 

Pros and Cons of Kraken

Pros

  • Strong security measures

  • Over 65 cryptocurrencies

  • High-liquidity exchange means you can make trades quickly

  • Earn rewards though staking

  • Cryptocurrency guides and videos for beginners

  • Minimum trade depends on the currency

Kraken At A Glance

  • Over 65 cryptocurrencies
  • Not available in all states
  • Centralized
  • Features may be limited depending on where you live
  • Strong security measures
  • Standard fee structure
  • Instant buy version for quick buys
  • Pro version for advanced traders
  • Learning tools for beginners

Cryptocurrencies Available on Kraken

You can trade a lot of different coins on Kraken — over 65. While experts recommend most investors stick to Bitcoin and Ethereum, this is one of the larger selections among popular cryptocurrency exchanges. Here are a few more popular coins it offers:

  • Bitcoin 
  • Ethereum 
  • Tether
  • Polkadot
  • Solana
  • USD Coin 
  • Cosmos
  • Litecoin
  • Dogecoin
  • Chainlink

Kraken also offers an array of trading pairs, including crypto to crypto and crypto to cash. The exchange also offers cash-to-cash, though this is not available for U.S. investors.

Kraken Fees

The Kraken Fees you’re charged vary depending on which Kraken product you use. U.S. investors can choose between Instant Buy or Kraken Pro. If you’re a beginner, you may want to stick with the Instant Buy method for ease of use.

Kraken has a different fee structure for instant buying vs. the more complex Kraken Pro, which is geared for more advanced cryptocurrency traders. While Kraken Pro offers the chance for the lowest fees, you may want to wait until you’re more familiar with the ins and outs of cryptocurrency trading as the ordering system and ordering options are more complex.  Kraken Pro charges fees based on how much you trade — the more you buy, the lower your fee. 

Instant Buy

Instant Buy is Kraken’s standard interface that presents you with the simplest entry point. While you can do cash-to-crypto and crypto-to-crypto trades, you’ll pay a 0.9% fee to purchase stablecoins with USD or another stablecoin, and a 1.5% fee if you buy a stablecoin with another crypto. You’ll also pay 1.5% on any other crypto trading pair. On top of your Kraken fee, you’ll pay additional fees for your payment method and any transfers:

  • Payment card processing fee: 3.75% + $0.28
  • Digital wallet payments processing fee: 3.75% + $0.28
  • Online banking/ACH processing fee: 0.5%

For example, if you want to transfer $100 from your online checking account and use it to buy Bitcoin, you would pay 5 cents, then $1.50 for your Kraken fee, so you’d get a little over $98 worth of Bitcoin instead of $100. Note that for the above transfer fees, Kraken lists the flat charges in euros, so we converted to U.S. dollars.

Kraken Pro, for the advanced investor, offers the chance to save on fees. Fees are charged on a maker-taker fee schedule and calculated as a percentage of the trade’s quoted currency volume. For 30-day trade volumes of $0-$250,000, maker fees range from 0.16%-0.12% (running backward the more you trade) and taker fees range from 0.26% to 0.22%, similarly. Kraken also offers up to 5x margin trading for intermediate and pro users who meet certain criteria. 

Kraken Security

Compared to other exchanges, Kraken is transparent about its security measures. It says 95% of all deposits are kept in offline, air-gapped (meaning isolated from unsecure networks), geographically distributed cold storage. 

Kraken says its servers reside in secure cages under 24/7 surveillance by armed guards and video monitors, with all sensitive account information encrypted.

Other security features:

  • Two-factor authentication (Google Authenticator and Yubikey) to keep your account secure
  • No phone/SMS account recovery, so it’s all in your hands
  • Email confirmations for withdrawals with self-serve account lock
  • Configurable account timeout for added protection
  • Customizable API key permissions with range boundaries
  • Global settings time lock for when you’re away
  • Pretty Good Privacy (PGP) signed and encrypted email for secure communication
  • Secure Sockets Layer (SSL) encryption to protect you when browsing Kraken 
  • Constant, real-time monitoring for suspicious activity
  • 24/7 live chat and email support for urgent concerns

Who Is Kraken Best For?

Thanks to Kraken’s advanced security measures and host of interesting features like margin trading and futures, we think Kraken is good for beginner and advanced investors alike. Kraken is one of the most transparent exchanges out there when it comes to sharing security measures. 

Beginner investors can get a lot of value from the exchange by using the platform’s Learn hub, where you can read and watch videos featuring in-depth guides to different cryptocurrencies and concepts.

These learning guides offer explanations into over 65 cryptos, explaining what they are, how they were created, and how to buy them. The videos give overviews of topics from basic to complex, starting with a series of “Crypto 101” videos. There’s also a separate video series for Crypto Security, plus access to multiple webinar panel discussions. 

The most limiting factor for Kraken is that it is not available in all U.S. states. New York and Washington state residents do not have access to Kraken. There may also be restrictions for some of the more advanced features based on where you live.

Verification Restrictions

The most notable geographic restrictions come down to verification levels United States users can access. Kraken uses different levels of verification to designate specific features and access for different users. 

These are automated verifications that usually take less than a minute for approval. All U.S. clients except for those residing in Texas will have a starter-level verification, which includes a $9,000 lifetime limit on cash deposits into your account, and a $9,000 daily and monthly cash withdrawal limit. Texas residents don’t have these restrictions. 

For someone interested in buying and holding a small portion of cryptocurrency, these geographic limitations won’t matter much (unless you live in New York or Washington). 

Kraken Compared to Others

Kraken Gemini eToro
Coins 65+ cryptocurrencies 70+ cryptocurrencies 50+ cryptocurrencies
Fees For instant buys, 0.9% on certain stablecoins transactions, 1.5% on other cryptos 0.50% convenience fee $0.99 to $2.99 transaction fee; 1.49% transaction fee for trades over $200 0.75%-4.9% spread (varies by crypto)
Wallet Storage Kraken does not offer its own wallet, but you may transfer your holdings into your own wallet at any time Keep coins on Gemini account, Gemini Wallet option, or transfer to your own wallet Keep coins on eToro trading platform account, move them to an eToro wallet, or transfer to your own wallet
Minimum trade Varies per coin (0.0001 BTC) Equal to the smallest amount of each coin that can be traded (0.00001 BTC) $25

Frequently Asked Questions

Does Kraken Work in New York?

No. Kraken is unavailable in New York and Washington, and other states may have limited features. Be sure to check before you sign up.

Does Kraken Have a Wallet?

No. Kraken does not offer its own wallet. But you can transfer your holdings to a digital wallet of your choice at any time.

Is Kraken Safe?

Compared to other cryptocurrency exchanges, Kraken is very transparent about its security measures. The exchange keeps 95% of its deposits in offline cold storage — the safest way to store cryptocurrency.