Kraken Exchange Review 2018 | Security, Fees, Limits, etc.
Kraken is a major US-based exchange with low fees, lucrative fiat/crypto trading pairs, and advanced trading options. It is consistently ranked as one of the best exchanges by independent media outlets.
But performance and credibility issues have rocked its once-stable user base.
Is it safe to use? Are there verification issues? Does the exchange even work after a massive overhaul? Be sure to read this review to learn everything you need to know about trading safely on Kraken in 2018.
Kraken is a major US-based exchange that was unleashed on the high seas way back in 2011. It’s known for its tight security, advanced trading options, and low trading and withdrawal fees. It offers clients in North America, the EU, and Japan services in USD, EUR, CAD, GBP, and JPY as well as a range of cryptocurrencies.
It bills itself as the “the largest Bitcoin exchange in Euro volume” and currently sits at #8 in 24-hour volume on Coinmarketcap (January 30th, 2018). This feature-rich, detailed, and secure exchange is an excellent option for advanced traders, but not beginner-friendly. It is especially appealing to European traders (more on this later). It even offers mysterious dark pool trading services.
Aside from being a pioneer of transparency in the industry, Kraken is consistently rated as one of the most secure exchanges. Through all of the criticism it remains a reputable exchange.
However, it has been constantly plagued by performance issues. CEO Jesse Powell publicly apologized for the sites issues and promised major upgrades. Kraken now goes into 2018 with high hopes.
But is it still safe to use? Have the issues been fixed? And how do you even use the site?
There is a lot to know about Kraken and very little reliable information. That’s why I’ve created this guide. Read it to learn everything you need to know about trading on the platform.
NOTE | January 30, 2018 - Kraken overhauled its trade engine and interface on January 11th. The update caused a site-wide shutdown for over 36 hours that stopped trading and withdrawals. The internet imploded; however, things have recovered and Kraken is coming back. The jury is still out on whether or not the issues have been totally solved. The consensus is that Kraken performed much-needed updates, but handled the process poorly. More on this throughout the review.
Kraken employs a range of security features and heavily secures accounts. It carries out regular reserve audits, is trusted by Germany’s Fidor Bank, and is cozy with the government of Tokyo and Bloomberg.
In November, 2017, CEO Jesse Powell said “no defending the recent state of the platform”. It was buggy, frequently down, and slow. A recent overhaul has promised to fix the issues. Things look promising but time is needed.
Fiat options are great for beginners, but that’s about it. Verification can get heavy and the interface is extremely complex.
Kraken has a complex fee system, but is very trader-friendly. It also has some of the lowest withdrawal fees in the known world.
Kraken offers trading pairs in USD, EUR, GBP, CAD, and JPY as well as 16 cryptocurrencies. Advanced margin trading options are especially lucrative for professionals.
Kraken is a good platform for trading fiat and some cryptocurrencies, but the jury is still out on performance issues. The lack of coins and support are negatives. However, its trading options make it a no-brainer for serious traders.
Jesse Powell unleashed the Kraken way back in 2011. Since then, it has had a tumultuous life. This San Francisco-based exchange pioneered new territories in Bitcoin security and real-world integration. It was the first exchange to pass a cryptographically verifiable proof-of-reserves audit and the first to have trading price and volume displayed on Bloomberg!
Its low fees, high security, and diverse functionality helped Kraken quickly rise to being the leader in Euro volume trades. It is routinely ranked at the top of overall volume trading.
Despite criticism in recent times about its performance, I found the company’s reputation to be rather solid. It is operated by San-Francisco based Payward Inc. and received $6.5 million in funding over 3 funding rounds. And when Mt. Gox went into the tank, Kraken was chosen as the partner to facilitate payments to users affected by the hack.
With that said, there are plenty of negatives about the exchange. There’s also plenty of negative sentiment around the web. It isn’t beginner-friendly and performance issues abound. That and how they recently handled their systems upgrade all have the web up in arms.
Overall, Kraken is seen as a good platform with advanced functionality and a solid reputation.
“Kraken is an exemplary institution that the rest of the Bitcoin world should look up to... One of the first exchanges to pass an independent audit.” - TheBlogChain
How Does Kraken Work?
Kraken is a digital asset exchange that supports both fiat currency and cryptocurrency. It is a matching platform that connects buyers and sellers and takes a fee for each trade.
One major advantage of Kraken is that you can deposit with your bank account. Many exchanges require you to already have crypto to start trading. This is a major headache that you avoid. It is easy to liquidate fiat currencies on the site (especially Euro).
Think of Kraken like the New York Stock Exchange: you trade assets with other users via the exchange and pay the exchange for its troubles. You are not actually buying anything from Kraken like you would Coinbase.
Margin Trading** - Margin trading is essentially trading with borrowed funds. You trade with other user’s money using peer-to-peer loans. The money in your margin account is used only as collateral to settle debts later on. If you make a profit, the funds are paid back to the lender. Margin trading allows you to enter into larger deals and potentially make (or lose) more money. This is opposed to margin lending where a user lends their crypto to get a return on investment from borrower. Kraken is considered to be an excellent platform for margin trading/lending. Be aware that it is very volatile and complex, so it is best left to experienced traders. For the full explanation, see BitFinEx’s guide to margin trading.
Is Kraken Safe? | Is Kraken a Scam or Not? | Is Kraken Insured?
With all of the horror stories going around about scam exchanges, ponzi schemes, and million-dollar hacks, I wasn’t surprised to see the web full of these questions. Users wanted to know if Kraken was just another scam or if it was legit.
Well, I dug deep into the dirt and found some promising information.
They claim their own security is impeccable, but who wouldn’t say that? They don’t do much talking on their website, but they do plenty of walking when it comes to security. Here’s what I dug up:
All the clues point toward strong security. The company has never suffered a hack.
Verdict: Good security.
What Are Kraken’s Funding Options and What Are the Fees?
Kraken has low fees in general. But some of the fees are so low its comical. What most US customers don’t realize about Kraken is that it is actually more favorable to foreign users than it is to domestic ones. Despite being based in the US, Kraken’s fees for foreign withdrawals are very low while US ones are high. Deposits and withdrawals in general have low fees. Fees are as follows:
Crypto deposits are basically free; however, withdrawals of cryptocurrencies are subject to a fee. In my experience, their withdrawal fees are in line with industry norms and not out of control like Binance. Here is the full list of fees:
What Are Kraken’s Trading Fees?
Kraken’s trading fees are dependent on which currency pair you trade. In general, they are very low. The company employs a maker-taker fee schedule, meaning you pay a different fee depending on if you are buying or selling.
The only issue is that their fees are extremely complex, volume-based, and tough to grasp. Here are a few things you should know:
Chances are that you won’t be doing volume as heavy as $50,000, so expect to pay around .26% as a taker.
What Are Maker-Taker Fees?
In every trade, one party increases the liquidity in the market and the other decreases it. Makers are users who place orders on the book (to buy or sell) and takers are the ones who match the orders. Makers are given a discount because their order increases the liquidity (they make the market busier) and takers pay more because they decrease that liquidity.
So this means if you are taking coins off the market, you pay a higher fee. The person putting the coin on the market is given a discount in exchange for increasing market liquidity. Basically, these fees encourage deals.
Making sense? Here is a great market-maker explainer video.
How to Trade Bitcoin on Kraken | Registration, Verification, Trading, and More
Kraken is not the most beginner-friendly site on the market. Registration is fairly straightforward, but from there things get a bit dicey. Kraken has a number of advantages for users trying to buy some Bitcoin, namely easy SEPA deposits/withdrawals and fiat currencies. When you know what you’re doing, trading is lucrative and even a bit fun!
Let’s get to it:
1) Register and Confirm Your Email Address
Ready to sail the high seas? Climb aboard.
2) Verify Your Account
If you want to trade, you've got to verify your account. This is where things get a bit difficult. Kraken’s verification tiers are a bit complex. Here’s a brief overview:
How Long Does Verification Take?
Level 1 and 2 should only take a few minutes. Level 3 should take a few days maximum. But as of January 31, 2018. Support is still under heavy load and performance is degraded. Verification is their last priority.
If you use the Basic interface, buying/selling is relatively simple. The new buying interface is much better:
Here’s a quick video showing how to change currency pairs and tools.
Top 3 Alternatives to Kraken for More Coins
One knock on Kraken (aside from its soul-crushing trade engine) has been its lack of coins. It has the major coins that everyone knows and loves (BTC, LTC, Dash. Monero), but limited options otherwise. If you are looking for something with more options, here are the top 3 alternatives to Kraken for you:
It’s binary. It’s finance. It’s Binance. This Asian crypto exchange is the world’s #1 exchange by volume, and it only opened its doors in 2017. Liquid markets, rare altcoins from all corners of the globe, and a lightning fast trade engine all make for a trading experience unlike any other. Where else can you expect to trade for Stratis AND get a chance to win a Porsche while doing it? Binance is crypto-only (no fiat) but it gives you access to nearly 200 trading pairs!Check out the full review of the Binance exchange.
Looking for all of the detailed charts, margin options, and low fees of Kraken only with access to 100 digital assets? Poloniex is the choice for you. With over 50 million unique visitors per month (January 2018), it is the largest exchange in the world in terms of visitors. Here you can trade via an intuitive interface and make big profits with its unique trading options. Check out the full review of the Poloniex Bitcoin exchange.
The US rival to Binance, Bittrex is more polished and regulated than its Asian cousin. It is one of the most liquid markets in the world, with over 250,000 BTC worth of assets traded PER DAY (January 2018). Tight security, low fees, and an advanced trading engine are all backed by the stability of a highly regulated operation. The best part? 190 + currencies ready to be traded on its detailed interface. So go get to it! Want a full review of Bittrex including fees, verification, security, and more? Read our Bittrex exchange review.
Kraken vs. Binance: Which is the Best Bitcoin Exchange?
Kraken and Binance are two of the largest, most liquid, and fastest exchanges in the Wild West. But which one will come out ahead in this showdown? On one side, the old money exchange based in Silicon Valley with fiat currency. On the other, the young, crypto-only upstart based in the shadowy corners of Asia. Both of these Bitcoin exchanges serve their niches well, but which one is best?
I’ve compared fees, verification headaches, user experience, trading, currency options, and more. Here’s my conclusion:
Neither of the exchanges are regulated, but Kraken’s ties to transparent companies located in Silicon Valley give it the edge. Kraken has overhauled its trading engine, so the jury is still out on its trading experience. However, Binance’s is the most advanced in the business.
What I really love about Binance, though, is the ability to trade without verification. That and it has nearly 200 digital assets on offer compared to about 20 for Kraken.
This one is a wash in my opinion, because it’s unfair to compare the two. They both serve two separate different segments.
Kraken: Best for users who want fiat currencies, a good UX, and cheap withdrawals within Europe.
Binance: Best for users who want to cheaply speculate on rare altcoins and make lots of trades with crypto.
Even before the massive update in January, 2018 users had a lot of questions about Kraken. After it, there were even more. This FAQ is a collection of the most common queries users had. Don’t start trading without reading!
Q: Does Kraken Provide a Wallet?
A: Yes, Kraken provides a free wallet to all of its customers. However, it is not recommended to ever store your crypto somewhere where you don’t control the keys. This is one of the most important Bitcoin safety tips you will ever learn.
Q: Which Currencies Can I Trade on Kraken?
A: Kraken offers a decent list of currencies for trading. Fiat options are USD, EUR, CAD, GBP, and JPY. They offer popular coins like BTC, DOGE, XRP, and ETH as well many others. For a full list of pairs, see Kraken trading pairs on on Cryptocharts.info.
Q: What Are Kraken’s Deposit Fees?
A: For the most part, depositing crypto is free (some coins incur a micro fee). US deposits are either $5 or $10 depending on your options. Euro deposits are €5.
Q: Is Kraken a Legit Exchange?
A: Yes, Kraken is usually in the top 10 exchanges in terms of the volume. The vast majority of customers have no issues. They are backed by venture capital groups and based out of San Francisco. They are not a scam.
Q: Does Kraken Have an App?
A: Yes it does. The Android app currently has a 4-star rating with over 1,500 reviews (January 2018). The iOS app is apparently a shame though—1.5-star rating with about 200 reviews (January 2018).
Q: Is Kraken Safe?
A: Kraken has multiple avenues for support, advanced security measures, and cold storage protocol to maintain reserves. They aren’t heavily regulated and secure like some competitors, but they have never suffered a hack. Kraken is safe.
Q: Does Kraken Require Verification?
A: Technically, no. If you only want to view charts, you’re fine. But if you want to trade you must get verified.
Q: What Are Kraken’s Margin Trading Fees?
A: You either pay .01% opening and rollover fees or .02% depending on which currency pair you trade. For the full list, see the support page on margin trading fees.
Kraken Reviews | Is This Bitcoin Exchange Reliable?
Despite high community sentiment, Kraken’s trade engine and site performance were the subject of endless support tickets, Twitter rants, and Reddit threads. In general, the site struggled to cope with the meteoric rise in popularity of cryptocurrency. Users everywhere complained of buggy performance and downtime.
However, the update did not go over well. Instead of being down for only a few hours, the site was down nearly two days. Rumors of Mt. Gox rumbled from the foul depths of the web. Those fears were mostly undue panic. Kraken grossly underestimated how long it would take, causing a stir on Reddit.
However, Kraken triumphantly returned with FREE trading for all of its loyal customers and heartfelt apologies for the heart attacks it caused everyone. Coindesk details the incident well in their roundup.
What Positive Reviews Say
The community loves Kraken (when it works). It isn’t held in as high esteem as some of competitors, but in general it is liked. Positive reviews focus mainly on 3 things:
Here are a few examples:
Here’s a link to a Reddit thread where a user wants to know if Kraken is trustworthy. Gauge the community’s sentiment for yourself.
What the Negative Reviews Say
Negative reviews were not hard to find. Even though the community generally likes Kraken, there are plenty who have been burned.
Negative reviews focus almost solely on system performance.
Morris_Dungpile paints a vivid picture of the Kraken’s coding team.
Verdict: Kraken is apparently a very good exchange when it works. Great fee structure, access to fiat, fast withdrawals, and more all come along with high community trust. But whether or not their system will actually work remains to be seen.
Cryptopositive | Likes and Dislikes
Bitcoin exchanges, like the people that run them, are extremely complex. Sometimes good people do bad things and sometimes great exchanges don’t have the power to serve their clients. Kraken is one of the those exchanges. It is both great and awful, amazing and horrible. There’s a lot to like and dislike, so let’s get to it.
Withdrawals are cheap, especially to Europe. And their crypto withdrawals are more competitive than most. Their maker-taker volume fee schedule is also extremely trader friendly. I’ve used a lot of exchanges in my day, and I have to say Kraken is one of the best for pro traders.
It’s good to have access to the world’s most common currencies. It makes life easier and presents lucrative trading possibilities.
The community has a love/hate relationship with Kraken. Like that athlete who has all the tools to be great but just doesn’t put the work in. There’s high trust for Kraken, but they just can’t seem to get their act together.
Kraken is usually one of the top 5 or 6 exchanges in terms of 24-hour volume. It currently sits in 8th.
Hey, nobody is perfect (see above).
Kraken just can’t seem to get its own exchange to work without bugs, downtimes, and support issues. We’ll see if they clean this up.
With about 20 currencies/coins to choose from, Kraken’s options are limited compared to competitors.
Kraken’s verification tiers and confusing trade interface are not beginner friendly.
Judgement - January 31st, 2018.
Kraken is a liquid exchange offering a great trading experience when it actually works. High-volume order books, fiat currencies, and a smooth UX all work together to make trading fun and profitable. From its detailed trading tools to margin trading/lending, it gives users a lot of ways to make good money. And it’s easy to get money off the site cheaply (especially for Europeans). You can even engage in dark pool trading.
It’s secure, well-connected, and transparent. Being in business 7 years shows its stability.
However, there’s a lot to dislike. These positives only apply when the site actually works. Be prepared to slam your fists on the table in anger more than a few times. Godspeed, my friend.
Verdict: Kraken is a good exchange for experienced traders who can take advantage of all it has to offer, but it has limited coin options (it does have fiat, though). It isn’t beginner friendly. It might not even work. I’d let time decide on whether or not it has improved before trading.