Kraken appears to be one of the safest and most promising cryptocurrency exchanges where you can invest in bitcoins and other cryptocurrencies. As our article about the best places to get bitcoin shows, Kraken appears to be one of the oldest and safest cryptocurrencies exchanges. Location of the company’s headquarters in the United States and relatively low fees – especially with its largest competitor Coinbase – make this platform one of the best exchanges for purchasing cryptocurrencies. Our in-depth Kraken review will help you find out all aspects of trading at Kraken, get to know subtle moments about doing so, and assess all the risks, given the advantages and disadvantages of Kraken.
General Information About Kraken
Company’s Foundation Year: 2011.
Headquarters: San Francisco, CA, United States.
Deposit Methods: Bank transfer, cryptocurrencies (known as altcoins).
Withdrawal Methods: Bank transfer, altcoins.
Fiat Currencies Supported: JPY, CAD, EUR, GBP, USD.
Mobile App: No.
Friendly Towards Beginners: No.
Customer Support: Average.
Community Trust: Good.
Kraken Review: General Overview of the Company
Kraken belongs to Payward, Inc. and tends to be one of the largest cryptocurrency exchanges in the world. Even though it lags behind Coinbase in terms of trading volumes, Kraken claims to be “the largest cryptocurrency and bitcoin exchange in euro liquidity and volumes.” Besides, Kraken can boast to have the largest percentage of mobile traffic – more than 38% of the Kraken traffic comes from mobile devices and smartphones. Any other major cryptocurrency exchange can boast that figure to be not higher than 27%.
The scope of this cryptocurrency exchange can be described with one simple fact: Kraken is an exchange that provides pricing of bitcoins to the Bloomberg terminal. Yet, the company did not become a dominant exchange immediately. Largely it happened thanks to a rapid wave of expansion undertaken by Kraken’s management. In particular, Kraken acquired such companies like Cavirtex (Canada, on 19th January 2016) and Coinsletter (US, on 19th January 2016 as well), CleverCoin (the Netherlands, on 27th June 2016), and Cryptowatch, a trading and charting platform (the deal was closed on 1st March 2017).
The markets where Kraken operates include Japan, Canada, the United States, and the European Union. Kraken attracts many users thanks to its really very low fees, and this stands in a sharp contrast with other cryptocurrency exchanges. That is achieved thanks to the ability to deposit and withdraw funds via bank transfers. For instance, fees for withdrawal of funds in EUR via SEPA bank transfers may be as low as 0.09 Euro – quite a drastic change from the typical $10 fee charged by banks. Actually, Kraken charges fees that vary from 0% to 0.26%, and they are typically based on the percentage of trade volume. Both sellers and buyers are charged fees, though sellers usually pay less. Besides, one should also point out that the fees for cryptocurrency trading pairs are lower than the fees for crypto and fiat currency trading pairs (such as USD/XBT).
In regards to the withdrawal fees, depositing and withdrawing your funds via bank transfers costs $10 (or 10 EUR or 10 GBP) beyond the United States and $5 in the United States. Though, Canadians who withdraw their funds in CAD (Canadian dollars) are able to withdraw their funds for free. The same stands for the Europeans who deposit or withdraw their money via the SEPA wire transfer.
In regards to the cryptocurrencies, the following cryptocurrencies are traded on Kraken:
- Bitcoin (XBT)
- Ethereum (ETH)
- Ripple (XRP)
- Litecoin (LTC)
- Dash (DASH)
- Monero (XMR)
- Lumens/Stellar (XLM)
- Melon (MLN)
- Iconomi (ICN)
- Augur tokens (REP)
- Ethereum Classic (ETC)
- EOS (EOS)
- Gnosis (GNO)
- Tether (USDT)
- Dogecoin (XDG)
- Zcash (ZEC).
As it has been mentioned above in our Kraken review, however, not everything is that good with this cryptocurrency exchange. First and foremost, it is difficult for beginners to get started with Kraken. And it is not going about the difficulties with signing up, but about the difficulties with using this service in general. If you are new to the cryptocurrency world, you are unlikely to use this service with comfort. Instead, the chances are that you are going to face serious issues with the Kraken interface, and a relatively slow support will barely help you.
Another thing that worries many clients is the growing number of hack attacks Kraken is a subject to and vulnerable to. Throughout 2017, the company has suffered a large number of DDoS attacks and experienced numerous performance issues. The attacks were so frequent that the website became barely suitable for using. In result, the trading volumes have declined on the website.
Kraken Review: Advantages of Kraken
Indeed, every cryptocurrency exchange has its drawbacks and disadvantages, and Kraken is not an exception. At this point of our Kraken review, we will disclose the main advantages that may prompt you to get started on Kraken. While there will definitely be mentioned several edges that were already mentioned above, this part of our review appears to be a detailed analysis of the exchange’s excellences.
So, the advantages of the Kraken cryptocurrency exchange are the following ones:
- Kraken frequently leads the rankings of the best cryptocurrency exchanges.
- Kraken supports a large variety of fiat currencies and cryptocurrencies, offering far more flexibility to its customers than Kraken’s competitors.
- Kraken tends to be a popular platform for intermediate and advanced traders.
- Kraken charges very low fees in comparison with other cryptocurrency services, such as Coinbase.
- Free-of-charge deposits in Canadian dollars, Euro, and Japanese yen.
- An exchange that sticks to the transparency policy: Kraken was the first to implement a proof-of-reserves auditing.
- SEPA wire transfers allow the customers from Europe to withdraw their funds really fast (not longer than 2 days).
- This exchange supports margin trading, which is beneficial for those customers who know what they do and who have a relatively small upfront capital.
- Security at Kraken is ensured as well, and, in particular, this exchange provides the clients with an ability to enable a 2-step verification.
Kraken Review: Disadvantages of Kraken
As it was mentioned above, Kraken has also certain disadvantages. This section of our Kraken review helps you to understand what kind of difficulties you may face when using the Kraken exchange. So, the disadvantages of this exchange are the following ones:
- The exchange’s support is slow and frequently unresponsive, especially after a new influx of users to Kraken took place.
- Similar to many other popular cryptocurrency exchanges, Kraken holds your private keys to the account’s crypto address.
- Deposits and withdrawals via SWIFT transfers (international banks) are likely to be expensive, up to $15 per transaction.
- Slow execution of orders that is characterized by numerous bugs, which results in the fact that professional traders lose their money thanks to such bugs.
- There have been disputes over the closed accounts on Kraken, though this issue happens here more rarely than at Coinbase.
- The user interface is not friendly towards beginners at all, which makes this exchange unsuitable for complete beginners.
- The procedure of account verification on Kraken sometimes takes as much time as it does at the websites of Kraken’s competitors.
Types of Accounts on Kraken
Before you will sign up for Kraken, you need to learn about the account types that are available of Kraken. Those types of accounts are known as tiers, and there are 5 tiers of Kraken accounts (from 0 to 4). What kind of an account tire you have actually defines the fees you incur, how much you can deposit and withdraw daily, etc. Even though it may seem easy to upgrade one’s account, this thought cannot be even more erroneous.
The Kraken Team
So, the following account types are available on Kraken:
Tier 0. Once you have signed up for Kraken, you will get your tier 0 account. When having such an account, you can neither deposit nor withdraw your friends. Actually, all you can do is accessing statistics and trading charts.
Tier 1. This type of Kraken accounts allows you to deposit and withdraw cryptocurrencies. Even though there are no limits on depositing funds, you can withdraw no more than $2,500 per day and $20,000 per month. Keep in mind that this type of accounts allows you to trade only cryptocurrency pairs, but not fiat and cryptocurrency pairs. In order to qualify for a tier 1 account, you need to provide the following information: telephone number, country of residence, birthdate, and full name.
Tier 2. When having such an account, you are able to deposit and withdraw fiat currencies: up to $2,000 per day and up to $10,000 per month. For cryptocurrency withdrawals, the amount increases to $2,500 per day and $50,000 per month. In order to qualify for such an account, you need to confirm your postal address.
Tier 3. Qualifying for a tier 3 account is more difficult. You need to:
- Provide your social security number (for the citizens of the United States).
- Verify your residence (provide a copy of an utility bill).
- Provide ID issued by the government.
- Provide ID-confirmation photo.
With this tier of Kraken account, you can deposit in fiat currencies as much as $25,000 per day and $200,000 per month (the same stands for withdrawals). In regards to depositing and withdrawing cryptocurrencies, the limits are raised to $50,000 per day and $200,000 per month.
Tier 4. This is the last account tire at Kraken and in our Kraken review as well. This tier can be reached only if you are a legal entity or you are a trader with high volumes. This tier allows you to deposit and withdraw $100,000 per day and $500,000 per month – in both crypto and fiat currencies. In order to start the process of upgrading your Kraken account to the tier 4, contact Kraken’s support.