Trying to find a reliable cryptocurrency exchange can be a challenge. It seems like every month an exchange gets hacked. With BTC hitting new highs almost every week, finding an exchange you can trust is crucial.
Kraken seems to check all the necessary boxes for a reliable and secure encrypted exchange. It is based in the US and has never been hacked. Kraken allows you to trade directly from fiat to cryptocurrency. There are also over 50 cryptocurrencies available for trading in the US.
- One of the oldest and safest cryptocurrency exchanges
- Pay rewards for staked tokens
- Provides advanced tools such as margin and futures trading
Who is the Kraken?
Kraken is a cryptocurrency exchange. It was founded in July 2011 and is headquartered in San Francisco, California. It is one of the largest and oldest exchanges. Its founder was Jesse Powell. The company has raised $118 million in seed funding.
What do they offer?
Kraken allows you to exchange fiat currencies like USD, CAD, EUR, and GBP into cryptocurrencies. You can also exchange from one cryptocurrency to another. There are over 90 cryptocurrencies on Kraken that can be purchased or exchanged for fiat currency, but over 35 of these tokens are currently not supported in the US
The Kraken platform has just added support for two more cryptocurrencies: Ocean Protocol (OCEAN) and Energy Web Token (EWT). Both currencies will be available for deposit and trading starting March 3, 2021. However, it should be noted that EWT transactions are currently not available for residents of the United States and Canada.
Fiat Funding Options
Kraken has different methods to fund your account with fiat currency. It uses companies that provide money transfer services (similar to Plaid). Each account has different minimums, maximums and fees.
You can also buy cryptocurrencies with a credit card, but this is the most expensive method. There is a fee of 3.75% + EUR 0.25. To use fiat currency, you need to complete KYC (Know Your Customer) verification. KYC requires verification of your identity. You cannot withdraw funds within 72 hours after opening an account.
Once the account is funded in fiat, you can choose which cryptocurrencies to buy. There are coins that let you go directly from fiat to crypto (main), and there are (alt) coins that you can only access through the main crypto. For example, if you want to invest in EOS, you cannot buy it with fiat currency. You have to buy BTC (Bitcoin) or some other major cryptocurrency first and then use it to trade EOS.
One of the attractions of Kraken is staking. This allows you to be rewarded with coins available in your wallet. Currently, 10 tokens can be staked. Rewards are paid out every two weeks. The exact reward rate you earn will vary from coin to coin, but currently ranges from 4% to 20%.
In the Accounts section you will find open orders and positions. You can also place trades here, including market and limit orders. This area includes the basic web-based interface and Kraken Pro, which we’ll discuss shortly.
After completing the transaction, consider transferring your cryptocurrencies to a software or hardware wallet. To transfer funds to your software wallet, you will withdraw from Kraken by providing your software wallet address. The first time you withdraw, you will need to confirm your wallet via email. From then on, your wallet address will be available in Kraken.
Kraken Pro can be used after creating a wallet. Kraken Pro is more polished than the basic web-based trading interface. It is similar to Coinbase Pro. It includes charts, market depth, open orders and positions, and the ability to place trades.
Kraken Pro offers certain features not found even on some of the most advanced platforms, such as margin trading and cryptocurrency futures trading.
The Kraken Pro platform also offers lower transaction fees than many competitors. For example, while Coinbase Pro fees start at 0.50% and Gemini ActiveTrader fees start at 0.35%, Kraken Pro starts at just 0.26%.
Is there any fee?
Yes, the basic Kraken exchange charges 0.90% for stablecoins and 1.49% for all other crypto pairs. If you fund your purchase using bank transfer (ACH), you will pay an additional 0.50%; if you pay with a bank card or digital wallet, you will pay an additional 3.75% + EUR 0.25.
Kraken Pro uses a more competitive maker/taker fee structure. Most traders will pay 0.16% for maker orders and 0.26% for taker orders. However, the rates for both decrease as the 30-day volume increases.
How do I open an account?
You can open an account by visiting the Kraken website. You need to be at least 18 years old to open an account and must reside in one of Kraken’s supported regions. Kraken also has a mobile app available in most countries.
Is my money secure?
Kraken has never been hacked and is considered a reliable cryptocurrency exchange. However, it is still best to transfer your cryptocurrencies to an off-site wallet.
Kraken offers various levels of protection to its users. It uses Google Authenticator 2FA for
Transactions and financing. There is also a Masterkey (Yubikey recommended) security level. Masterkey is very useful if you lose your phone or Yubikey.
Note: In testing, we encountered issues with Kraken’s two-factor system with Yukikey and the Authenticator app. You can get locked out of your account by these tools, which is a big problem. Hope Kraken fixes it, but be forewarned.
Global Settings Lock (GSL) is only available when the above three levels are set. GSL prevents 2FA for funds and 2FA for transactions from being altered if login is compromised.
Is this worth it?
There is a lot to explore on Kraken. It has one of the largest lists of supported currencies today (including the popular Dogecoin meme currency), offers rewards when you invest in coins, and even allows margin and futures trading. It’s certainly worth a try.
However, other cryptocurrency exchanges may offer higher interest rates/rewards or less complex fee structures for staked crypto assets.
Here are some of the most common questions people ask about Kraken:
Is Kraken an American company?
Yes, Kraken is headquartered in San Francisco, CA and is available in 48 US states.
Does Kraken have a crypto rewards card?
No, so far, no upcoming cards have been announced.
What fees does Kraken charge for margin trading?
Margin traders are charged a 0.02% setup fee and a 0.02% rollover every four hours.
Does Kraken have Shiba Inu?
Yes, Kraken will start to support Shiba Inu deposits on November 29, 2021, and will be available for trading the next day.