In addition to being one of the first cryptocurrency exchange platforms, Kraken has a lot to offer investors of all levels. Some of its top features include:
Over the years, cryptocurrencies have proven particularly vulnerable to hacks resulting in millions of dollars in lost coins. While most hacked exchanges have reimbursed their clients for any lost value, you don’t want to wind up at a crypto exchange with low cybersecurity that might leave your coins ripe for the picking.
Kraken takes its commitment to security seriously, ranking first with a perfect score on crypto exchange security review site CER. Notably, Kraken has not had any major hacking events in its 10-year history, which even the international industry mainstay Binance cannot claim.
Not only does Kraken offer safe coin storage, with 95% of deposits held offline in cold storage units spread across the world, but it also promises platform security: Its servers are kept in secure cages under 24/7 surveillance by armed guards and video monitors. In addition to physical security measures, Kraken encrypts all of your sensitive contact information at the system and data level and regularly engages in vulnerability testing of its own system.
Ease of Use
Though its Instant Buy platform can make Kraken a pricey first foray into crypto, there are no barriers to entry if you’re just getting started. Most user types (Kraken has four) let you get verified in minutes automatically. The highest tier, Pro, can take several days as it requires certain documents be reviewed manually.
Once you’re verified, you can fund your account with fiat currency, such as U.S. dollars, and start purchasing cryptocurrencies. Though most major crypto platforms these days allow this, not all do and instead require users to buy cryptocurrency elsewhere to make purchases on their platform.
An important note: Kraken uses third-party companies to handle these fiat fund transfers, and each of these companies has varying minimums and fees for account funding, meaning you may end up owing a fee when you transfer your cash in, if you aren’t careful.
In addition to being caught off guard by the number of fiat transfer options, new investors may feel a little overwhelmed by Kraken’s assumption of customer knowledge, although the platform does offer decent educational information—but you’re mostly on your own with the actual investing.
Finally, the Kraken app recently launched in the United States, with the exception of New York and Washington. Though the app currently does not allow debit or credit card payments, it does allow for both Instant Buy trading and traditional trading using other payment methods.
Advanced Investing Options
More sophisticated investors will be pleased with several of Kraken’s additional offerings.
In addition to the coins available to everyone, Kraken offers high-net-worth investors access to margin trading, a risky form of investing that allows you to borrow money to fund purchases using your existing investments as collateral. Margin may allow you to see exponentially greater gains but also leaves you open to margin calls that can cause massive losses if prices drop unexpectedly. Margin trading is a less common feature currently on platforms available in the U.S. as the federal government works out how it’s going to treat crypto.
Margin trading comes with some additional costs. Kraken clients can expect to pay opening margin fees and rollover margin fees. The opening fees are assessed when you first open your position (a.k.a. borrow from Kraken) and purchase something. Kraken’s opening fees range from 0.01% to 0.02%, depending on the base currency.
The rollover margin fees are charged to you for maintaining your position. These fees are assessed starting four hours after opening your position and are reapplied every four hours thereafter. These fees also range from 0.01% to 0.02, depending on the base currency.
In addition to margin trading, you can also stake select coins at Kraken, meaning you agree to lock your cryptocurrency on the exchange to receive rewards. Staked coins are then loaned out to others so they can do things like verify more transactions for proof-of-stake cryptocurrencies. This is not unlike what happens behind the scenes with money in your bank account, though coin staking does not offer the same federal insurance that banks do. Kraken pays out biweekly rewards for coin staking.