Kraken Review: The Best Monster in the Crypto Sea?
Kraken is a cryptocurrency exchange that has been in operation since 2013. It was founded in San Francisco, California by Jesse Powell who still continues as CEO to this day. Kraken was once the largest Bitcoin exchange in all of Europe and it now handles about 10% of all trades happening on any given day. With offices in San Francisco, Tokyo, and London, Kraken is truly a genuine global exchange.
In this Kraken review, we will look at Kraken’s main pros and cons, compare it to other popular exchanges like Binance and Coinbase, and explain what makes Kraken so popular among crypto enthusiasts around the world.
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What is Kraken?
Kraken is a cryptocurrency exchange which provides access to various fiat currencies like USD/EUR, and also supports the trading of various cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and Monero (XMR). It provides traders with the ability to trade crypto futures, place short orders on crypto, and to margin trades for long term holdings of crypto assets.
Kraken’s interface is intuitive and easy to use, and this is a major reason why Kraken is so popular. There are a number of technical graphs that help users to gauge the current state of trading on Kraken, as well as indicators for more novice traders.
These charts are also interactive so that users can zoom in or out easily, which allows them to see what is happening with trades at different levels.
Kraken also offers an offline wallet that is encrypted and easy to use. This type of vault protects keys from being stolen or hacked, as long as they are not stored on a computer with internet access. Users can also store their key in any other type of bitcoin hardware wallet by exporting it through Kraken’s API.
What is Kraken used for?
- Short term investments (trying to gain profit from short-term fluctuations in prices)
- Longer term investments (the classic buy low, sell high!)
- Exchanging Bitcoin and other cryptocurrencies with fiat currencies – This often has lower fees than exchanging one crypto currency for another, and also provides more liquidity so that users have better odds of being able to buy or sell coins at an agreeable price than if they were trying to convert between two different cryptos.
What are the Advantages of Kraken?
Beginner Friendly Platform
Kraken is a very beginner-friendly cryptocurrency exchange. There are only four steps to follow when signing up:
- Create an account
- Set your password and two factor authentication
- Verify phone number using SMS verification or call in the confirmation code sent via email
- Activate the account with Google authenticator app by scanning barcode on screen or entering key manually
Once activated, users can deposit funds into the account from a bank wire transfer of US dollars or Euros through SEPA conversion for free – this means no chargebacks!
It is especially positive for beginner traders to be able to use fiat currencies rather than being forced to use cryptocurrencies that they don’t understand because this will scare them away.
Kraken has a simple interface and offers plenty of guidance on how crypto works, which is always helpful for users who are new to trading. Kraken also supports lower volume accounts and there are fewer options on the screen when checking your balances.
One of Kraken’s major features is its security. It offers a variety of advanced levels such as two-factor authentication, third party service verification and hardware wallets. All these elements work to make it one of the most secure exchanges on the market today. And when coupled with an offline wallet for additional storage in case users lose their phone or laptop, it becomes virtually impossible for hackers to access user account even if they were able to break through every other layer of protection offered by Kraken.
Furthermore, Kraken says it holds 98% of customer funds offline in encrypted cold storage vaults or paper wallets so they’re not vulnerable to hackers.
Multiple Payment Options
Fees can be paid using any major credit card, wire transfer, SEPA bank transfer or international SWIFT service which means users from most countries should have no problem depositing funds on the platform, unlike some other more regional players.
If users lose their account ID or password, Kraken can reset the information and send it to another email address chosen by the user. Kraken also has a number of different account protection features that are unavailable on some other exchanges. These include two-factor authentication (which is now the industry standard) and email confirmation for sensitive actions like withdrawals.
Added Protection for Big Withdrawals
Kraken also includes one-time passwords for users who need to withdraw more than $20k worth of cryptocurrency at once (though it is worth noting that this is something that many Bitcoin investors will never have to do.)
One of the most nuanced features on Kraken is margin trading. This means that if users have a balance of 1000 units, and deposit 100 more, then their leverage will be at roughly 20:100 or only two times. It is worth noting, however, that despite their benefits, margin trades are not for inexperienced traders because they carry high risks and rewards.
Stop-loss orders are a popular type of order on Kraken. They allow traders to set an automatic sell level, which is triggered when the market price falls below that level. For example, if you a user has $1000 worth of bitcoin and wants to hedge against downside risk, they could use stop-losses as follows:
- Place a buy limit order at $600 for 100 BTC at a cost of $60
- Place two sell stop loss limits – one at $580 (105% of your position) and another at $490(150%)
If the current market value drops down to either one these levels during trading hours then they will automatically be sold off in order to minimize potential losses.
Automatic Withdrawal Option
Kraken offers an automated withdrawal option for its users. This is a very convenient feature that can be used to withdraw any assets from a Kraken account without the need to manually enter details and wait days or weeks for transactions to process.
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What are the disadvantages of Kraken?
High Fees Compared to Other Exchanges
Kraken is known for having high fees and trading volume calculations that don’t quite add up. In comparison to other exchanges, their pricing tends to be on the higher end of what’s considered market average.
Ineffective User Support
The Kraken support team has a reputation for not being very timely in responding with solutions or fixes to user issues users. Many people have also found that they are often very quick to close an issue without any resolution leaving users with no choice but to try and find a solution themselves.
High Trading volumes
One thing people will notice upon visiting Kraken’s website is that they trade over $30 billion worth of cryptocurrency every single day! This number might seem like it would make sense since this makes them one of the top ten largest crypto-exchanges by daily bitcoin volumes, but the problem is that they also have a large trade volume in fiat currencies which makes up most of their trading activity. This means Kraken can’t easily pivot to crypto-only transactions without either significantly shrinking or halting operations while this transition takes place.
There are some limitations in place when making trades on this platform such as not being able to take out cash from an account until after three days (or six months). This is something beginners might find frustrating because many other platforms allow withdrawals instantly or even offer credit card purchases options where money gets deposited straight away.
Previous Liquidity Issues
In order for exchanges like Kraken, Coinbase and Binance to be successful, they need high liquidity and low fees. This enables traders to get out of positions quickly with as little damage as possible when market conditions change. Unfortunately, Kraken has had some issues with having enough liquidity because it’s not just Bitcoin being traded on its platform but all different types of cryptocurrencies too. On top of that, there are other problems associated with how Bitcoin prices, themselves, fluctuate relative to FIAT currency each day.
Users Need to Prove their Identity
This can be a problem for new users, especially if they don’t have the right documents readily available (i.e. a passport, driving license) and other information such as bank details.
Is Kraken Trustworthy?
Kraken is one of the oldest cryptocurrency exchanges in operation, and has a reputation for being extremely trustworthy. It offers trades through all major fiat currencies, including USD, EUR and even CAD. The exchange has strong standards when it comes to its security protocols as well as the storage of users funds. However, users should be cautious as Kraken does not have insurance in place to cover losses from security breaches or slips up on trades.
Is Kraken Good for Beginners?
Kraken is an excellent exchange for beginners because it offers many easy-to-use features. Beginners will find that they can buy and sell crypto coins as well as other tokens with just one account. It has an intuitive user interface where users can see the real-time price of their trade on the screen so that they know when to buy and when to sell.
Has Kraken ever been Hacked?
Kraken has never been hacked but in April 2016, someone managed to access Kraken’s private API key and user info from an unencrypted cookie on the web server. The hacker was then able to display a message that said “Hacked by Ockham’s Razor Team!” However, no funds were lost or compromised during this attack because of two-factor authentication in place through Authy for all withdrawals above one Bitcoin (about $350). All passwords had also been reset immediately.
Kraken has never been hacked again after this incident. They also implemented new security features such as password encryption and forcing users to provide their phone number if withdrawing more than one Bitcoin per day.
How does Kraken Compare to Other Exchanges?
Many users find Kraken to be the number one choice when it comes to cryptocurrency exchanges.
One major advantage to Kraken over some other cryptocurrency exchanges is it offers a diverse variety of fiat currencies, including USD and EURO. As an added bonus, there are no withdrawal or deposit fees in any currency!
Furthermore, Kraken’s interface has also been lauded as more user-friendly than many competitors due to the clean, uncluttered layout. The website itself loads quickly and intuitively with clear instructions if you need help getting started without the need for any additional downloads.
Some people find that Coinbase is a bit more beginner-friendly than Kraken. However, unlike Kraken, Coinbase does not currently support as many cryptocurrencies, and there is no way to buy Bitcoin on Coinbase with USD.
Our Final Verdict:
Kraken is a great exchange for your crypto needs. If you want to buy, sell, trade or store various cryptocurrencies in one place with minimal fees and quick trades then this is the right exchange for you! Kraken offers extensive research features that can help users find opportunities in the market as well as tools like charts and graphs which make it easy to analyze data. The user interface is clear and simple so even beginners should have no trouble navigating their way around Kraken and unleashing its full potential. With many superior features compared to other major exchanges, there are so many reasons to try out Kraken today!
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I’m Jon, owner of Trade Wise at https://tradewise.community/ and https://www.youtube.com/channel/UC7VmOx8DbvX4Rbrac2pPcjw
I review forex and crypto trading products and services to find the best of what’s out there for creating a passive income without becoming a full-time trader.