Kraken and Coinbase are two major cryptocurrency exchanges, with most industry enthusiasts using their services to buy and sell crypto.
In this Kraken vs Coinbase review we will go over both platform’s strong and weak points and see which of the two options fits better for your needs.
|Deposit Methods||Debit Card, Bank Transfer||Bank Transfer, Cryptocurrency|
|Withdraw Methods||PayPal, Bank Transfer, Cryptocurrency||Bank Transfer, Cryptocurrency|
|Available Cryptocurrencies||31, including Ripple, Bitcoin, and Ethereum||28, including Ripple, Bitcoin, and Ethereum|
Kraken was founded in 2011 by Jesse Powell following the Mt. Gox security breach but was officially released on the market in 2013.
When it was released, the platform supported Bitcoin, Litecoin, and Euro trading. But today Kraken accepts 31 cryptocurrencies and several fiat currencies. You can read a full Kraken Review from our publication.
Coinbase was founded in 2012 and acts as both a cryptocurrency trading platform as well as a digital currency wallet.
While Kraken was designed with a focus on security, Coinbase was created with a different approach. It was developed with the aim of being the easiest to use crypto exchange on the market. You can read a full Coinbase Review from our publication.
Kraken vs Coinbase – Getting started
In order to start trading on these platforms, you’ll need to create an account and make a deposit.
On Kraken, this process usually takes a while, since it doesn’t support debit card payments or PayPal. Therefore, the process generally looks like this:
- Sign up and verify your account;
- Deposit fiat currency through a bank transfer;
- Wait for the transfer to be completed (which generally takes between 1 to 5 business days);
- Trade your fiat coins for cryptocurrency.
Coinbase, on the other hand, makes the process a bit quicker for users who are just getting started, with the process looking like this:
- Sign up and verify your account;
- Deposit fiat currency using a debit card or through PayPal;
- Trade your fiat coins for cryptocurrency.
So, as you can see, the support for debit cards and PayPal significantly reduces the time it takes to start trading. While through Kraken you may have to wait for up to 5 business days, Coinbase allows you to start trading on the same day.
Kraken vs Coinbase – Trading
Alright, so your account is verified, and you made a fiat deposit which is now available in your account. What next?
If you’re on Kraken, you have multiple trading options available, which you may want to opt for depending on your trading experience.
While you can simply buy, let’s say, $100 worth of Bitcoin, you can also use margin (leverage) trading. Margin trading is a system that allows you to trade with more capital than you actually have in your account.
For example, let’s say that you deposited $1,000. If you trade with you choose to trade Ethereum with a 5x leverage, you can buy $5,000 worth of ETH using only $1,000.
If the price of ETH then rises, your investment could be worth $7,500 instead of $5,000. If you choose to sell at this point, you just made a $2,500 profit. However, margin trading goes both ways.
If you choose to buy ETH with margin trading and the value of your investment goes down, you will come at a loss if you decide to sell.
Double the risk, double the reward.
Coinbase, on the other hand, doesn’t provide leveraged trading. You can only buy or sell cryptocurrencies using your own funds.
However, one system that is available on both platforms is futures trading. A futures contract binds to you buy or sell a currency at a predetermined price at a later date.
Generally, Kraken is the go-to choice for more experienced traders, as the margin trading allows them to capitalize on the market and potentially multiply their investment.
Coinbase, on the other hand, is the preferred option for traders who are just getting started, as its interface and trading process is simpler and more user-friendly.
Kraken vs Coinbase – Trading Fees
When it comes to trading, fees are an important aspect that should not be ignored.
Coinbase is more focused on small trades, and this can be observed from their fee system. For buy/sell transactions of digital currencies, they charge a spread fee of approximately 0.50% of the trade value. Additionally, they charge a Coinbase fee, which can differ based on the region of the user or the value of the transaction:
- $0.99 for transactions less than or equal to $10;
- $1.49 for transactions between $10 and $25;
- $1.99 for transactions between $25 and $50;
- $2,99 for transactions between $50 and $200.
Their region fees can range anywhere between $0 (in)/$0.15 (out) for SEPA bank transfers from Europe to 3.99% for credit/debit card transactions.
Kraken, on the other hand, has a fee system based on your 30-day trading volume, with fees ranging from 0% to 0.26% of the total value of the transaction.
For example, for a volume between $0 and $50,000, Kraken applies a 0.16% fee for makers and 0.26% for takers. On the other end of the spectrum, if you have a trading volume of over $10,000,000, the taker fee drops to 0.00% and the maker fee to 0.10%.
For margin trading, Kraken applies two additional fees:
- A margin opening fee;
- A margin rollover fee.
For fiat transactions, Kraken charges depending on their payment partner.
- US wire transfer (USD) – flat rate or $5 for deposits/withdrawals;
- SEPA bank transfer (EUR) – free deposits, EUR 0.09 for withdrawals;
- Canadian wire transfer (CAD) – free deposits, but the bank charges a fee of around $10.
- Electronic funds transfer (CAD) – 0.25% withdrawal fee.
As we can observe, Kraken has more competitive trading fees, which generally attracts investors with large amounts of capital. However, when it comes to lower trades, Coinbase’s fees are not that bad, thus managing to attract several beginner investors.
Kraken vs Coinbase – Available currencies
Currently, the difference between the two platforms when it comes to supported currencies is not that high. Kraken supports 31 cryptocurrencies, while Coinbase is following closely with 28.
Both platforms accept major cryptocurrencies, including:
- Ripple (XRP);
- Bitcoin (BTC);
- Bitcoin Cash (BCH);
- Ethereum (ETH)
- Ethereum Classic (ETC);
- DASH (DASH);
- Litecoin (LTC).
Kraken vs Coinbase – Security
Millions of dollars are stored on these platforms; thus, security should be one of their top priorities when it comes to business operations.
Both Coinbase and Kraken adhere to KYC and AML procedures, with their customers being required to complete various security checks in order to get verified.
The user funds are segregated on both platforms, meaning they are stored separately from the company’s capital and are not used for operational purposes. Both Kraken and Coinbase use cold storage wallets for the vast majority of the funds, protecting them from potential hacks or security breaches.
Coinbase also provides insurance for online stored funds by U.S. customers, covering up to $250,000 by FDIC insurance.
I should also state that at the moment, Kraken is the only cryptocurrency exchange that did not suffer any security breach or hack since its public release.
Kraken vs Coinbase – Availability
Both exchanges are based in San Francisco, US, and accept services on a global level. Coinbase is available in more than 100 locations around the globe, including Africa, Asia, Australia, all of Europe, North America, and South America.
Kraken is also available worldwide, with a few exceptions:
- North Korea;
An important thing to state is that due to local restrictions and regulatory compliances, Kraken is not available in Washington and New York.
Kraken vs Coinbase – Customer Support
The support provided is an important aspect for any business, and even more so when it comes to trading.
And while both exchanges are known to have great support teams, there still are several complaints across online forums regarding various processes.
Kraken apparently struggles with account verification, with the process taking longer than expected. At the same time, several users complained that their support team is sometimes hard to reach, with replies coming in after more than 3 days after the initial request.
Coinbase, on the other hand, is doing a little better, managing to respond to support tickets within 24 to 48 hours. However, there have been instances where Coinbase’s team took up to 3 business days to respond to less-urgent tickets.
Coinbase also has an available chatbot which comes in handy for assistance in account management or basic information that you couldn’t find on the website.
Choosing a favorite between Kraken and Coinbase is difficult, and it generally boils down to personal preference.
Coinbase provides more support and is easier to use by beginning users, but Kraken offers greater chances to significantly increase your earnings through margin trading.
Both platforms have exceptional security, storing most of the funds on cold wallets.
When it comes to customer support, Kraken and Coinbase provide great and useful support, but sometimes fall short on response time.
If you plan on quickly trading a few cryptocurrencies to get started on the market, Coinbase may be the better choice for you. But if you’re in the long game and want to trade larger sums, Kraken’s lower fees and advanced trading options might be just what you need.