In this Kraken review, we will talk about this cryptocurrency exchange platform in great detail, and we will help you decide whether or not this platform is appropriate for your trading needs. Kraken is one of the oldest cryptocurrency exchanges in the world. This exchange platform still retains a strong appeal to many investors today.
Ranked fourth virtual currency exchange in the world by CoinMarketCap in 2021, Kraken remains one of the market leaders of digital asset brokers. With a good level of liquidity, security, and visibility, Kraken holds up over time and stands out for its stability.
Discover our presentation of Kraken, the platform's asset offer, but also the tools and services offered for trading, the fees charged, as well as our opinion on Kraken.
Kraken: history and key figures
Kraken was co-founded in 2011 by Jesse Powell. The parent company, Payward Inc, is based in San Francisco, California. Kraken is a platform regulated by authorities such as the famous SEC (Security and Exchange Commission) in the United States.
The platform was launched in 2013, after two years of preparation, and is gradually diversifying its asset offering. Kraken also offers the possibility of trading with several currencies, including mainly the dollar, the euro, the pound, the Swiss franc, the Yen, etc. The platform thus provides access to more than forty cryptocurrencies including Bitcoin, Ethereum, Litecoin, Dash, Ripple, Cardano, Dogecoin, etc.
The volume of trading on Kraken exceeds one billion dollars daily and can sometimes reach several billion. In addition, Kraken benefits from a good level of liquidity. CoinMarketCap measures its liquidity index at 57%, against 67% for Binance or 55% for Coinbase or 41% for Bitfinex. Essential in the world of virtual currencies, Kraken, for example, bought the famous site Cryptowatch in 2017. Today, Kraken has over 7 million customers in over 170 different countries.
Trade cryptocurrencies from the Kraken platform
Kraken offers a good diversity of crypto assets and very well meets the needs of occasional investors. For the most experienced investors, it is possible to access positions on cryptocurrencies with a leverage effect or to access future contracts.
Placing orders on Kraken is done by selecting the type of order: simple, intermediate, or advanced. Simple orders allow you to buy or sell, at the price or threshold indicated, for the desired amount. Intermediate orders allow you to select the duration of the order, as well as to select the desired leverage effect. These order types allow clients to trade their assets with many options. Other services and features are also available.
Tools to manage virtual currency investments on Kraken
The platform offers many features and the various investment tools allow all investor profiles to meet their needs. Although Kraken may provide access to less diversification than other platforms, the options offered provide access to all desired levels of risk. Kraken thus offers three different investment approaches.
The Spot Market and Margin Trading
Kraken allows its funds to be invested in virtual currencies in its own name. The spot market, that is to say, the direct purchase and sale of cryptocurrencies between users, is, therefore, the preferred market for beginners. For the more experienced with less risk aversion, the platform offers margin trading, i.e. taking positions with a leverage effect.
The leverage effect offered by Kraken goes up to 5 times on classic positions, i.e. you can buy or sell crypto assets up to 5 times more than you have. Rollover charges do not exceed 0.02% in 4-hour increments.
Staking
Kraken, like many cryptocurrency platforms, offers staking. As a reminder, staking consists of blocking part of its cryptocurrencies for the benefit of the platform to speed up blockchain processes and thus increase the liquidity and fluidity of the virtual currency market. In exchange for blocking part of its cryptos, the platform remunerates the user with a more or less high return. For example, staking the cryptocurrency Palkadot (DOT) on Kraken yields 12% per year in 2021.
The platform even offers returns of up to 20% per year for staking Kava, or even a return between 5% and 7% per year on Ethereum (ETH2). Details of Kraken staking returns are available on their website. Comparatively, Kraken offers better returns on some virtual currencies than other exchanges.
The futures market on Kraken
For more seasoned investors, the platform provides access to the futures market. As a reminder, a futures contract is a two-party agreement for the purchase or sale of securities at a fixed price and on a given date. Futures contracts are useful for investors with good time-intensive analysis and clear objectives.
Kraken thus offers leverage effects on future contracts (up to 50 times), which makes it possible to increase its gains tenfold, but also its losses in the event of poor anticipation. With extreme leverage of 50, for example, you guarantee 2% of the position, but your gains and losses are magnified 50 times. The Kraken Futures platform offers an overview of different trading possibilities.
Other services offered by the Kraken platform
Kraken has developed a particularly interesting range of services.
Account management
Kraken, unlike other platforms, offers more personalized offers. For major regular users, the platform even goes so far as to offer the assignment of an almost permanent account manager. This allows clients to resolve their issues or questions related to their account or trading. Nevertheless, customer service is sometimes considered by some users to be slightly less accessible than on other crypto platforms.
Le service OTC
This is a special Kraken service accessible for orders from $100,000, so it is reserved for a small wealthy clientele. As a reminder, the OTC market, or Over-The-Counter, is a market in which sellers and buyers of very large quantities of securities agree to avoid causing prices to move too strongly through their transactions.
This market allows certain wealthy people to enter or exit the market without difficulty for such amounts. On virtual currencies, holders of more than 1,000 Bitcoins are often nicknamed "whales" (in 2021 there are 2,150 addresses of more than 1,000 Bitcoins which concentrate 42% of the capitalization). The OTC Kraken office relies on the know-how of investment bankers from major banks, 24/7.
The professional account
Kraken offers the opening of a professional account for companies that wish to do so. Kraken, for example, allows the opening of a special account for institutions, i.e. banks, investment funds, companies related to cryptocurrency, trading, or insurance companies.
This allows access to transaction and withdrawal limits that are significantly higher than conventional accounts. All these companies that may be called upon to carry out transactions of particularly large sums can thus facilitate their daily activities.
Kraken Platform Fees
Fees at Kraken are often rated slightly higher than at some competitors like Binance. First of all, Kraken applies different fees depending on the type of order and differentiates "Maker" transactions, i.e. users who place an order to buy or sell at a given price (pending order ), “Taker” transactions, those that buy or sell immediately at the current price. Kraken is also reducing its transaction fees with the increase in monthly volumes processed by the user. The table below shows the different Kraken fees.
| Volume over 30 days | Global fees | Fees on stablecoins and currency pairs | |
|---|---|---|---|
| Maker | Taker | Maker & Taker | |
| $0 to $50K | 0,16 % | 0,26 % | 0,20 % |
| $50 to $100K | 0,14 % | 0,24 % | 0,16 % |
| $100K to $250K | 0,12 % | 0,22 % | 0,12 % |
| $500K to $1M | 0,1 % | 0,2 % | 0,08 % |
With this fee system, Kraken encourages agents to trade in advance, which further increases the liquidity of the platform. For their part, currency deposits are generally free on the platform. In addition, if the withdrawals are in cryptocurrencies, Kraken applies fees and a minimum amount [see the detailed fee schedule on their site].
So, withdrawing USD Coin, for example, requires a minimum amount of 10 USDC (i.e. $10). The fees applied to withdrawing USDC are 7.5USDC ($7.5), which is not negligible for very small wallets.
Open an account with Kraken
Opening an account with Kraken requires the usual documents. You can create an account by entering your email address and some personal data (name, address, telephone, profession) and by sending proof of address, identity document, and photo.
This step, identical on all other platforms, is necessary to ensure the transparency of the user and his eligibility to open the account (prohibited for those under 18 or for nationals of certain countries, etc.). To make a deposit, simply make a SWIFT or SEPA transfer with the data specified in your Kraken account.
Finally, you must, depending on the type of account opened and the amounts that can be deposited, provide Kraken with proof of income, in accordance with the jurisdiction of your country in the context of the fight against money laundering implemented by the States.
Subsequently, it is also possible to activate double security on your account with the google 2FA system. In short, opening an account with Kraken is no more complex than with most other cryptocurrency exchanges available today.
Our opinion on Kraken
On the one hand, Kraken is a regulated and old platform. On its site, Kraken specifies for example that “the funds of Kraken customers are held directly by the customers in their own bank accounts of our partner banks which are highly regulated. Kraken Bank is regulated by the Wyoming Banking Division. ».
One of the first exchange platforms created, it is maintained today and shows remarkable stability, in particular thanks to its move upmarket.
In addition, Kraken is renowned for its security, having never been hacked before. The platform has also decided to further strengthen its security in 2020. In addition to the possible double identification process on its account, Kraken has developed a sufficiently secure network.
Kraken further states that nearly 95% of deposits are kept in offline servers in multiple locations. The online servers are constantly monitored using a high level of physical security. Finally, Kraken also implements scenarios in the event of a hack to test its own system.
Nevertheless, the complexity of using Kraken can play against investors who will prefer platforms that are easier to use, such as Bitpanda for example. The mobile application, which offers fewer features than most competing offers, or the complexity of the price list may cause some users to find the platform impractical.
It should also be noted that the fees are slightly higher than on other crypto platforms. The possibilities of diversifying your portfolio are also important, but less present than with some cryptocurrency platforms.
Disclaimer:
All of our information is, by nature, generic. They do not take into account your personal situation and do not in any way constitute personalized recommendations with a view to carrying out transactions and cannot be assimilated to a financial investment advisory service, nor to any incentive to buy or sell instruments.
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