Kraken is a fully functional cryptocurrency exchange platform known for its low transaction fees and support for a wide array of digital assets. It regularly expands its offerings, having added prominent coins like Bitcoin Cash in 2017 and more recent additions such as Ocean Protocol (OCEAN) and Energy Web Token (EWT) in 2021.
As one of the largest and oldest exchanges, Kraken stands out among U.S.-based platforms by providing advanced trading features like margin trading. The platform supports multiple investment options, including crypto and fiat assets, futures trading, margin trading, and over-the-counter (OTC) transactions.
Committed to being a secure and user-friendly platform, Kraken combines robust security measures with a comprehensive suite of tools suitable for various types of traders. This review explores its history, features, security protocols, and ideal user profiles to help you determine if it meets your trading needs.
History and Background
Launched just two years after Bitcoin’s inception, Kraken has grown into a well-established exchange emphasizing security, low fees, and diverse cryptocurrency support. It also allows users to stake or lend their coins to earn rewards.
The exchange was founded in July 2011 with the goal of reducing the Bitcoin market’s reliance on a single platform. Its founder and CEO, Jesse Powell, played a key role in assisting Mt. Gox after it suffered significant security breaches. Following this, Powell launched Kraken’s beta version, and the company expanded from its base in San Francisco’s Bay Area.
Ideal Users
Kraken is an excellent option for beginners entering the cryptocurrency space due to its strong security, low fees, and extensive coin support. However, new users are encouraged to advance beyond the basic account tier to avoid higher fees associated with entry-level features.
Experienced traders can benefit from Kraken’s wide selection of coins, margin trading options, and staking capabilities. While margin and staking features have been restricted for some U.S.-based users, they remain available to international investors. Advanced traders in the U.S. can still access a broad range of markets and enjoy reduced fees as their trading volume increases.
It's important to remember that all trading involves risk. Only invest funds you are prepared to lose.
Key Features
Kraken offers a robust trading environment tailored to both individual traders and institutional clients. Its services include OTC trading, margin trading, and flexible account management. Below, we explore its standout attributes.
Security Measures
Security is a top priority at Kraken. The platform consistently receives high ratings from the Crypto Exchange Rater (CER) due to its rigorous protocols.
Kraken undergoes regular audits to verify its full cryptocurrency reserves, a practice initiated in response to historical exchange failures. The platform stores 98% of user deposits in offline, geographically distributed cold storage. Servers are housed in secure facilities with 24/7 surveillance and armed guards.
All sensitive user data is encrypted, and the exchange conducts frequent vulnerability tests. Users can enable two-factor authentication (2FA), set up a Master Key for account recovery, and activate the Global Setting Lock (GSL) to prevent unauthorized changes to account settings.
Kraken also supports PGP encryption for email communications to mitigate phishing risks. Although the platform has never been hacked, it experienced DDoS attacks in 2017. To further enhance security, Kraken operates a bug bounty program, rewarding researchers who identify and report vulnerabilities.
User Convenience
Kraken is designed for ease of use. Its Instant Buy feature simplifies purchases, though fees may be higher for this service. Account verification is automated for lower tiers, often completed within minutes.
The platform offers multiple account tiers:
- Tier 1: Allows digital currency trading only; no fiat deposits or withdrawals.
- Tier 2: Permits limited fiat withdrawals—up to $2,000 daily and $10,000 monthly, varying by location.
- Tiers 3 and 4: Require manual verification, which can take one to five days.
Transaction fees depend on order size, currency pairs, 30-day trading volume, and order type (maker or taker). Margin trading incurs additional opening and rollover fees. The interface clearly displays fee schedules and potential discounts for higher volumes.
Withdrawal fees vary by cryptocurrency. The Kraken mobile app is available in most U.S. states, excluding Washington and New York. It supports bank transfers and Instant Buy but not credit or debit card deposits.
Margin Trading
Kraken has offered margin trading since 2015, providing leverage up to 5:1 for pairs like BTC/EUR and ETH/XBT, and 2:1 for others such as XMR/EUR. This feature allows advanced traders to amplify potential gains—though it also increases risk.
Margin fees include:
- Opening fees: 0.01%–0.02%
- Rollover fees: 0.01%–0.02%, applied every four hours
In addition to margin trading, users can stake certain coins to earn rewards through Kraken’s proof-of-stake validation services.
Conclusion
Kraken ranks among the top cryptocurrency exchanges due to its advanced trading tools, strong security, and support for numerous digital assets. Its reputation for thorough due diligence when listing new coins inspires confidence among users.
However, beginners may find the platform overwhelming due to its extensive features and coin selection. The limited functionality of starter accounts, slow funding processes, and occasional customer support delays are minor drawbacks.
Overall, Kraken is a reliable choice for both new and experienced traders seeking a secure and feature-rich trading environment.
Frequently Asked Questions
What cryptocurrencies can I trade on Kraken?
Kraken supports nearly 60 cryptocurrencies, including major coins like Bitcoin and Ethereum, as well as newer assets such as Ocean Protocol and Energy Web Token. The list continues to expand regularly.
Is Kraken suitable for beginners?
Yes, Kraken offers a user-friendly interface and strong security, making it a good choice for newcomers. However, beginners should upgrade from the basic account tier to avoid higher fees and gain access to more features.
What are the fees for using Kraken?
Fees vary based on trading volume, order type, and currency pair. Maker-taker fee schedules apply, and margin trading involves additional opening and rollover fees. Withdrawal fees depend on the cryptocurrency.
How does Kraken ensure security?
Kraken employs cold storage for 98% of funds, 24/7 surveillance, encryption, 2FA, and regular audits. It also offers a bug bounty program to encourage reporting of vulnerabilities.
Can I use margin trading on Kraken?
Yes, margin trading is available with leverage up to 5:1 on select pairs. However, U.S. users may face restrictions based on account size and location.
Does Kraken have a mobile app?
Yes, the Kraken app is available in most U.S. states and supports bank transfers and Instant Buy functionality. Credit and debit card deposits are not currently supported.
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