Kraken is one of the largest cryptocurrency exchanges available today. As a high-volume trader, though, it’s probably better for experienced and intermediate traders who have some knowledge of currency exchanges. Even with 24/7 customer support and excellent security protocols, it can be daunting for the novice.
People say that Philosophy degrees are useless, but, Jesse Powell, a philosophy graduate from the University of California, developed Kraken after a visit to the headquarters of one of the first cryptocurrency exchanges— Mt. Gox. Feeling the security at Mt. Gox was lax, he got the idea of creating a secure exchange to take market share in case Gox was ever hacked.
Powell was right, of course. Mt. Gox suffered a massive hack and collapsed that same year, but that wasn’t reason enough to shove an untested exchange out the door. Instead, Powell worked on and tested his exchange for two more years before launching it in 2013.
After that, the company sprinted forward. Kraken formed an exclusive partnership that same year with German bank Fidor allowing them to offer SEPA wire transfers for deposits and withdrawals. It was a smart move, and it positioned Kraken to become one of the most-used cryptocurrency exchanges in Europe.
Since then, Kraken has gone through several rounds of capital investments and made a few terrific acquisitions. In 2016, Kraken acquired Coinsetter, which provided customers with access to 37 US states and Canada. In the same year, they acquired the Dutch exchange, Clearcoin, providing it with a hot wallet service for its customers.
These moves made Kraken into the powerhouse that it is today. Now it’s one of the only Bitcoin exchanges that offer margin trading, which expands its market share even further. It’s also one of the first cryptocurrency exchanges listed on the Bloomberg Terminal, making it one of the chosen exchanges for professionals.
If you’re a beginner, this may all sound intimidating. You wouldn’t be alone in thinking so. One of the most common complaints about Kraken is that they don’t make it easy for beginner traders.
If you find yourself intimidated or need help getting started, Kraken offers 24/7 customer support. Log in, create an account, and let their professional support staff help sort things out for you.
That said, Krakens’ benefits outweigh its daunting deficits. Its 16 cryptocurrencies, access to margin trading, five fiat currencies, and serious security make it worth considering.
Kraken is a robust trading platform supporting 16 cryptocurrencies and designed with professional traders in mind. It uses Bloomberg acronyms for all its listed cryptocurrencies, so it may take some getting used to if you aren’t familiar with them.
It’s a full currency exchange, so it’s essential to keep in that mind when approaching it as a novice. Reach out for help if you need to through the online chat customer service.
If you’re unfamiliar with the layout and design of monetary exchanges, there’s going to be a learning curve, but it is possible to quickly understand things if you have a little patience and some time.
Start by creating an account and choosing a tier for verification. Once a customer submits their information, it will take a few days for verification. Users are not eligible to make trades or deposits while waiting for verification, but they will be able to familiarize themselves with the platform.
Once customers are authenticated, they’re ready to begin adding funds to their account balance. They’ll choose from a list of cryptocurrencies to start trading. All transactions require a two-step authentication process to complete, so customers should make sure they have all the information on hand.
At the time of writing, Kraken offers 16 different cryptocurrencies paired with five fiat currencies, including:
- Bitcoin Cash
- Ethereum Classic
- Stellar Lumens
- Tether (Omni Layer)
Fees and Limits
It would be shocking for an exchange with the pedigree of Kraken to not have fees and limits. Kraken bases its fees on volume traded and is weighted on the side of makers. If you’re the maker on a trade, your share of the fee can be as low as 0.00 if the total value is high enough.
Withdrawals and deposits have fee structures that depend on the fiat currency. People used to European markets will be happy to find that Kraken offers withdrawals and deposits with 0 fees for SEPA bank transfers, but deposits or withdrawals in US dollars incur a $5 flat fee for either, which can be inconvenient.
Bitcoins and other cryptocurrencies scale their fees based on a percentage of the total value of the transaction. It’s one of the less popular fee structures, but it isn’t without precedent – and, of course, it’s how the service makes its money. Check their fees here.
Kraken uses identity verification and trade volume to create a tiered structure for trade limits. Each tier requires different verification, and you’ll need to provide it each time you go up a level.
Tier 0 is the most basic level and allows users to browse the site without making any transactions. You aren’t obligated to make any deposits either. Choose this option when you’re trying to decide if Kraken will work for you.
Most beginners should consider the Tier 1 structure which has no deposit limit but does limit withdrawals. As a Tier 1 user, you’ll only be able to withdraw $2,500 per day or $20,000 per month. This tier requires your full name, date of birth, country, and phone number to qualify.
Tier 2 requires another level of verification but allows a higher cap on deposits and withdrawals in fiat currency. You may only make withdrawals, deposits, and trading in digital currency, but some fiat currency funding is available depending on your country.
Tier 3 requires validation of proof of residence and a valid government ID, but you’ll get access to margin trading at this level, and your caps on withdrawals and deposits in fiat currency will increase again.
Of course, that means that Tier 4 has the highest cap on transactions and requires the highest level of verification. If you think you’re interested in this level, contact Kraken for details on qualification.
You’ll need to provide a two-step verification each time you start or accept a trade. This system is designed to provide another degree of security.
If there’s a regular complaint about Kraken, it’s that their customer service isn’t as responsive as people would like. Users report that contacting a representative is easy, but staff often lack the authority to make necessary changes to the account. It’s a byproduct of their rigorous security, but it can be aggravating when you’re used to making quick trades.
Contacting their customer support is as simple as clicking a button on their website. Their online chat is available 24/7 and covers all global markets. However, it is still an online chat, which can slow down due to high volume at times.
They’re very proud of their customer service and claim over 2 million tickets served, but reviews on several sites haven’t always been kind. Complaints about delays and unresponsive technicians who can’t make alterations to accounts are common.
These issues seem to be a byproduct of their quest for robust security, and insistence on verification throughout the customer service process. The trouble is, customer service requests the same level of authentication as the system while processing requests. Every time a question transfers between personnel, they ask the same authentication, which slows the process down.
There’s evidence that Kraken is trying to change things around, though. Recent reviewers mention that the current customer service is prompt, well informed, and efficient. Kraken appears willing to listen to its customers and to fix nagging issues like this, so it may be worth looking into.
Is Kraken Safe to Use?
Kraken takes its security seriously, as you might imagine from a company that began with the pending implosion of its predecessor. They do a stunning amount of digital business in a day, so it’s easy to understand why, but the rigor of authentication and testing can test the patience of professional traders who are accustomed to doing a higher volume of trades quickly.
When a customer begins an account, they’ll enter verification information, and then wait for it to be verified. It can take up to two days to verify the information before users are eligible to make their first trade. Each tier of trading requires higher levels of verification, which can get exhausting when dealing with customer support.
All of Krakens’ coin storage is kept offline in safe air-gapped cold storage, which makes it almost impossible for hackers to penetrate.
Kraken has been through several rounds of investments, guaranteeing that it has the reserves available when you need them. You’ll be able to withdraw whenever necessary, with the assurance that your bitcoins are in the wallet where you left them.
Given its size and reputation, Krakens’ record on preserving its security is impressive. They’ve been subject to a continuing onslaught of denial of service attacks for years and have yet to experience a breach. They also regularly hire security professionals to attack their internet defenses in every possible way, securing your information and finances.
The only trouble with Krakens’ security, it seems, is that it can be frustrating for professional traders used to things moving much faster. Every trade is double authenticated, which is time-consuming and will delay time-sensitive orders, but if your concern is security, Kraken has you covered.
Frequently Asked Questions
Does Kraken Have an App?
Kraken had an app for IOS and Android, which was released in 2014, but it wasn’t very well received, so they removed it. Their response to the negative reception shows they’re responsiveness to customer complaints and willing to change course when it’s required.
As of 2019, it hasn’t been replaced, and according to Kraken’s web page, there are no plans to release another app for IOS or Android. This seems an odd move given the overwhelming popularity of mobile browsing and app integration these days.
However, Kraken does offer mobile trading support on its Cryptowatch platform. If you’re interested in futures trading, they also provide mobile support on their Futures platform.
What Countries are Supported by Kraken?
Kraken is available in the majority of countries, so it’s easier to list areas they don’t service. You can’t currently set up an account in Afghanistan, Cuba, Iran, Iraq, Japan, North Korea, or Tajikistan unless you’re a resident of those countries living outside of them. These restrictions come from regulations or sanctions against those countries.
Additionally, residents of Washington and New York State can only submit for pre-verification. When Kraken gets regulatory approval in those states, the accounts will be ready to go.
Does Kraken Provide a Cryptocurrency Wallet?
Kraken doesn’t provide an individual wallet for cryptocurrency. Instead, deposits go into a corporate wallet, which is held either as a hot wallet for trading and withdrawals, or cold storage for security. From there, customers deposits are available for quick trading.
Withdrawals come from the hot wallet and are available immediately.
Kraken recommends investing in a hardware wallet to hold your cryptocurrency and suggests several different hard wallets on their website. Given Krakens’ rigorous security demands, it may be inconvenient, but it adds another level of security and imposes less risk on the exchange.
Kraken is one of the oldest cryptocurrency exchanges around and has the funding and security measures to prove it. However, their system isn’t very user-friendly for newcomers to cryptocurrency, and their customer service still has a way to go. None the less, the company’s impressive record on security, acquisitions, and investments make it a compelling market to consider whether you’re a beginner or a professional.
Kraken has a limited number of fiat currencies to choose from, but an extensive portfolio of cryptocurrencies to begin trading. Its tiered fee structure will get you started quickly, but the system itself has a learning curve that might still be daunting.
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Disclaimer: Digital currencies and cryptocurrencies are volatile and can involve a lot of risk. Their prices and performance is very unpredictable and past performance is no guarantee of future performance. Consult a financial advisor or obtain your own advice independent of this site before relying and acting on the information provided.