Unsure whether to use Coinbase or Kraken?
Look no further!
In this in-deptch comparison, we will tell you everything you need to know about Kraken and Coinbase and their differences.
By the end of the article, you should have a very good idea about which exchange is better for you!
Picking a reputable exchange is one of the most important steps to take before buying Bitcoin. Many people have lost money in various hacks and scams over the years.
Coinbase and Kraken are two of the largest and best-established cryptocurrency exchanges in the world. Both headquartered in San Francisco, the two have expanded their offerings to many countries worldwide.
The future looks bright for both exchanges, though their next steps lead in slightly different directions.
Coinbase is making its way to the New York Stock Exchange, as the company has announced it intends to go public via an Initial Public Offering (IPO). This will make it the first major U.S. exchange to do so. It will allow Americans to purchase shares of the company itself, whose most recent estimated valuation was around $8 billion.
Kraken is taking a slightly different route. Instead of going to New York, the exchange has opened a new division in Cheyenne, Wyoming. Kraken Financial’s application for a bank charter recently won approval from the State of Wyoming, meaning it is now cleared to operate as the first crypto bank in the U.S.
Clearly, both exchanges are actively working toward bigger and better things.
But how do their offerings stack up for those looking to buy, sell, or trade Bitcoin?
Kraken was launched in late 2013 by Jesse Powell. Powell had worked with Mt Gox in 2011, helping what was the dominant Bitcoin exchange at the time recover from a hack. Powell saw the continued issues with the exchange and saw the effect that its potential (and eventual) collapse could have on the whole Bitcoin world.
Luckily, Kraken took off and provided a meaningful alternative. Soon after Mt Gox’s meltdown, Kraken’s markets represented more than half of all BTC/EUR trading.
Kraken is available in 48 U.S. states (NY and WA excluded) and 176 countries worldwide.
Kraken left New York in 2015 after the introduction of the BitLicense, a uniquely restrictive license that all crypto companies operating in the state need to obtain.
Kraken gave nine reasons for their refusal to apply for a BitLicense:
Yet Kraken is not anti-consumer protection or against all forms of regulation. The exchange has founded multiple organizations working towards self-regulation of cryptocurrency firms, complied with (and passed) FinCEN audits, and provided thoughtful responses to proposed legislation.
Additionally, the creation of Kraken Financial as an approved depository institution in Wyoming has shown that the exchange is more than willing to work with regulators when they show themselves to be open to collaboration.
Back to its exchange product, Kraken’s focus on security and spotless track record has led to it being one of the leading Bitcoin exchanges.
It offers just about every feature you could want for buying or trading Bitcoin.
Let’s take an in-depth look at Kraken’s services.
When signing in to Kraken, you’ll be greeted by the following account security reminders. This is the first of many instances of Kraken’s committment to security.
Once logged in, you’ll find that Kraken’s interface is very customizable.
You can watch prices with a simple chart:
Or you can use Kraken Pro’s much more detailed interface:
Here, you can have all the information you need to trade Bitcoin on one screen. You can buy with leverage, set stop-limit, stop-market, and take profit orders, and view your trade history and open positions.
On Kraken’s Trade screen, you also have the option of selecting a Simple, Intermediate, or Advanced interface. Intermediate offers more options than Simple, such as leverage and how long your order should stay on the books if it’s not executed immediately. Advanced adds all the functionality of Kraken Pro’s trading interface.
If you’re just looking to buy Bitcoin with the minimum amount of hassle, Kraken’s Simple interface is all you will need.
You may be wondering why Kraken shows Bitcoin's ticker as XBT rather than the more common BTC. Kraken is following guidance from the International Standards Organization (ISO) which states that any currency not associated with a country should begin with an "X". In Kraken's words, this "reflects its growing legitimacy as an international currency."
Kraken has ample liquidity for just about any trader, with hundreds of millions of dollars worth of crypto changing hands on the platform each day.
Kraken has a great mobile app that provides all the functionality you could want on-the-go.
You can view data for all supported assets and track your holdings.
Buying and selling is easy from within the app.
Yet the app is not available in all locations just yet. Notably, the U.S. is excluded. However, this is based on which country your App Store is associated with, rather than the country associated with your Kraken account. This means that if you’re willing to go through the hassle of changing your App Store settings to a different country, you can still use the app as normal.
Kraken also offers a Kraken Pro app. This is for advanced users. You sign-in via an API key rather than your username and password.
Kraken supports deposits in USD, EUR, CAD, GBP, CHF, JPY, and AUD.
Most users will not be able to deposit funds using a debit card, and credit cards are not supported at all. Kraken only supports debit card (or cash) deposits for Canadian Dollars (CAD) using their partnership with Canada Post. Verified Canadian users can generate a QR code on Kraken and go into any Canada Post office to pay this invoice with a debit card or cash. This is only available for deposits, not withdrawals.
The best way for Kraken customers to deposit funds is via wire transfer. Users can deposit USD via FedWire or SWIFT transfers.
You can deposit Euros via SEPA, InstantSepa, or SWIFT transfer.
In addition to depositing using a debit card or cash, Canadian users can send funds using a domestic wire or SWIFT transfer.
Australian Krakeners can use a regular bank transfer or Osko payment to deposit funds. If using an Osko-enabled account your deposit should be confirmed within just a few seconds.
Kraken’s trading fees are very reasonable, especially when compared to Coinbase’s exorbitant charges.
Kraken calculates fees based on two factors:
*Maker orders* are limit orders that are posted to the order book. E.g. the price of Bitcoin is $40,000, and you submit a buy order for $39,950 or a sell order for $40,050. Neither of these will execute instantly, instead they sit on the book and add liquidity, *making the market*.
*Taker orders* are also known as market orders. They generally execute instantly, as they *take* available liquidity from the market. By executing a taker order you are fulfilling someone else's maker order.
Taker orders incur fees roughly 2.5x greater than maker orders on Kraken. However, fees are low enough to begin with that it needn’t be too much of a consideration unless you’re actively day-trading.
|30-Day Volume (USD)||Maker Fee||Taker Fee|
|0 - 100,000||0.0200%||0.0500%|
|100,001 - 1,000,000||0.0150%||0.0400%|
|1,000,001 - 5,000,000||0.0125%||0.0300%|
|5,000,001 - 10,000,000||0.0100%||0.0250%|
|10,000,001 - 20,000,000||0.0075%||0.0200%|
|20,000,001 - 50,000,000||0.0050%||0.0150%|
|50,000,001 - 100,000,000||0.0025%||0.0125%|
Limits also apply depending on your verification level.
Kraken has a comprehensive support center.
Here, you can learn about dozens of cryptocurrency topics, from how to secure your account using two-factor authentication, to spot vs margin trading, and advanced guides such as API trading.
Kraken also has a Crypto 101 series which covers more general cryptocurrency-related information such as Proof of Work vs Proof of Stake, DeFi, and Bitcoin mining.
Kraken offers a host of security features to ensure that your account is kept under your control.
The exchange does not support SMS two-factor authentication (2FA), as this is vulnerable to SIM-swapping. SIM-swapping involves an attacker using social engineering or identity theft to convice your phone provider to port your number across to a new device. The attacker can then receive all the 2FA codes sent to this number and authorize withdrawals or change your password.
Instead, you can use an authenticator app such as Authy or Google Authenticator to provide time-based codes. An attacker would need to gain access to the physical device you use in order to obtain the verification code.
Even better than authenticator apps are security keys. These are physical keys that can authenticate logins and generate one-time passwords (OTPs).
You’re more likely to lose your phone than a dedicated security key. You can also configure multiple security keys to work for the same logins, meaning you can store one or more in extra-safe locations like a bank deposit box. For these reasons, Kraken recommends security-conscious users take advantage of the benefits of security keys over authenticator apps.
Additionally, security keys will soon (with the implementation of the U2F protocol) protect you from phishing scams. As they bind to the specific URL of a website, your security key will never authenticate a fraudulent website or reveal your information.
Kraken also has detailed guides on setting up PGP encryption for all emails between you and the exchange. PGP (which stands for Pretty Good Privacy) encryption is built on the same cryptographic ideas as Bitcoin.
This is an intermediate-to-advanced security setting, but will ensure that your communications are kept as private as possible.
While you might not make use of every security feature that Kraken offers, it’s good to know that they’re available and that Kraken takes security very seriously.
In September 2020, Kraken was granted the first special purpose depository institution (SPDI) charter in Wyoming.
This charter will allow Kraken to open up the U.S.’s first “crypto bank,” which will be able to provide many services not currently available to retail and institutional investors.
These services include digital asset custody services that meet the requirements of the Investment Advisers Act, prime brokerage, and a seamless nexus between fiat and digital currencies.
We expect to be able to not only service companies and provide services to larger organizations, but also to realize greater efficiencies in our ability to service the retail clients that have built this company.
It is difficult to state the over-importance of this milestone. I think this is a specific development in the course of crypto affairs. This represents the development of an efficient, transparent, responsible nexus between the world of traditional finance and the developing crypto ecosystem. I think this is a historical time and the kind of thing that students of finance and history will look back on as a watershed moment for the development of financial assets.
Banking and Bitcoin have had a troubled relationship for many years. Banks have often been openly hostile to Bitcoin. They have come out publicly against it and frozen the accounts of individuals and businesses that transact in crypto, all the while working on their own blockchain technologies or even advising their customers on the huge upside to be found in Bitcoin.
Kraken’s foray into Wyoming represents the next step in this relationship. Soon, cryptocurrency investors will be able to bank with an institution that is as ideologically (and financially) committed to Bitcoin as they are.
Kraken truly sets the standard for what a cryptocurrency exchange should be in 2021.
Jesse Powell has been committed to security since before even starting Kraken and has been a reasonable voice in the often-heated debate over cryptocurrency regulation.
Kraken offers just about any tool investors and traders could want from an exchange. Support articles are a comprehensive resource for almost any question.
And now the exchange is pushing Bitcoin into new realms with their groundbreaking entry into the banking sphere.
All of these reasons contribute to Kraken’s position as one of the best cryptocurrency exchanges in the world.
Coinbase is one of the oldest continually-operating exchanges, having been founded in 2012 by Brian Armstrong and Fred Ehrsam. Ehrsam later moved onto other projects, leaving Armstrong the public face of Coinbase.
Coinbase reached 1 million users in 2014, and has reportedly hit more than 13 million since then.
In 2017, Coinbase obtained a BitLicense from the New York State Department of Financial Services which allowed it to legally trade Bitcoin and Ethereum in the state of New York.
Coinbase allows users in 44 countries to buy Bitcoin and other supported assets on their platform, while most other countries can convert between cryptocurrencies and make use of Coinbase Wallet. The exchange supports 49 U.S. states, with the exception of Hawaii.
Coinbase can’t be faulted on its interface. It’s simple and easy to use. That’s a major consideration for the new-to-crypto users that Coinbase targets.
There’s a big blue Buy Bitcoin button, making it easy to do what you came for.
It’s also easy to set up recurring purchases, so you can dollar cost average (DCA) your way into the market.
Coinbase’s mobile app is a great counterpart to the browser version. Buying, selling, and transferring funds is just as easy as on a desktop.
U.S. customers can pay buy crypto on Coinbase via a number of methods.
Bank transfers (ACH) can be used for buying, as well as depositing and withdrawing fiat. They generally take 4-5 business days to clear.
Debit cards are ideal for small investments. They clear immediately, but can only be used for buying crypto directly through the online platform or app.
Wire transfers are good for depositing and withdrawing fiat, while US customers can also withdraw funds instantly via Paypal.
Continental European users can buy crypto or deposit funds using SEPA transfers, iDEAL, SOFORT payments (especially popular in Germany), debit cards, and some credit cards.
Additionally, withdrawals via SEPA, Paypal, and Instant Card Withdrawals are available.
UK-based customers have almost identical payment and withdrawal options available, with the addition of Faster Payments.
Coinbase was the first global crypto exchange to be granted an e-money license by the UK’s Financial Conduct Authority, and was the first exchange to support the Faster Payments initiative, which aims to reduce inter-bank transfer processing times down from 2-3 business days to just a couple of seconds.
Customers in the EU and UK can also sign up for Coinbase Card, a debit card that allows you to spend your crypto.
Canadian Coinbase customers are not quite so lucky. The only payment methods available to citizens of the Great White North are debit cards for purchases and Paypal for withdrawals. A rather limited selection.
Coinbase’s fees are notoriously high. Buying with a debit card will cost you almost 4% in fees, on top of the 0.5% spread that Coinbase bakes into the price. Converting between cryptocurrencies will cost you 2%.
|Country/Region||Payment Method||Funds Available||Currency||Fees|
|Europe||SEPA Transfer||1-3 days||EUR||1.49%|
|SEPA Transfer or Faster Payments||Instant||GBP||1.49%|
|USA||Bank Transfer||5-7 days||USD||1.49%|
|Coinbase USD Balance||Instant||USD||1.49%|
It’s this model that has allowed Coinbase to make over $2 billion in fees since its inception.
Coinbase users in nearly any country can convert between cryptocurrencies, but cannot always convert crypto back into local currency.
Additionally, many people report long waiting times for wire transfers to clear, up to two weeks in some cases. This shouldn’t be a problem if you’re investing regularly and spreading your buys out, but if you’re looking to take advantage of short-term price action it’s worth taking into account.
Coinbase has many of the same security features as Kraken, though places less of an emphasis on their importance. For example, SMS verification is the default form of two-factor authentication. As this is the least secure method, and many users are unlikely to change from the default settings, it seems to be a missed opportunity on the part of Coinbase to increase their customers’ account security.
You do have the option of setting up authenticator apps or security keys, and Coinbase at least makes the ranking each 2FA method by security clearly visible.
One good setting is that all cryptocurrency withdrawals require 2FA by default.
Coinbase has a comprehensive knowledge base, where you can find answers to many questions you may have.
On the Support page, there is a chatbot which can assist with basic inquiries, or you can submit support requests through the helpdesk. Some users have reported long wait times to have their queries answered.
Coinbase also has dedicated numbers to call if you believe your account has been compromised, a handy feature which could make all the difference in such a potentially disastrous situation.
Coinbase Pro is the company’s equivalent to Kraken’s Trader interface: a full-featured trading platform.
Coinbase Pro has lower fees than the simpler interface, the ability to set limit, market and stop-loss orders, as well as a slick design.
Originally called GDAX (Global Digital Asset eXchange), Coinbase rebranded its top-tier offering in 2018. In addition to trading tools geared toward intermediate to advanced traders, Coinbase Pro offers API integration for automated trading.
Another benefit is the fact that Coinbase Pro supports same-day wire transfers, meaning that as long as you submit the transfer before the cut-off time (usually 2pm) you can trade with your money straight away. Note that this will incur a $10 fee on top of any fees your bank charges.
Check out our full review of Coinbase Pro.
Coinbase has won itself a large share of the first-time crypto demographic thanks in part to Coinbase Earn. This platform rewards users with cryptocurrency for watching short videos that explain different digital assets, such as DAI, BAT, and EOS.
It’s a good way for new users to be introduced to crypto in a beginner-friendly way, and earning up to $50 without investing a dollar surely creates a nice first impression of the space.
While all cryptocurrency exchanges must deal with increased traffic during periods of high market volatility, Coinbase is notorious for going offline more than any other major exchange. At least half a dozen times in 2020 alone, users were greeted by an error message when they tried to log in to trade during large price movements.
Other times, users could log in but were not able to execute any trades. You can imagine how frustrating it would be to watch the market soar or slide while you can only sit on the sidelines.
If this occured just once or twice it could be excused, but the exchange has had more than enough time to implement the changes required to ensure that it is online to serve its customers when they need it most.
It really is inexcusable for one of the world’s largest exchanges (and one that is often see as the face of crypto to many of those new to the space) to have such consistent issues.
In February 2019, Coinbase acquired a small startup named Neutrino. Neutrino offered blockchain analytics software, claiming to be able to track transactions not just on the Bitcoin network - which anyone with a lot of time on their hands can do - but also on privacy-focused blockchains such as Monero.
Over the past 3 years, we've created one of the best platforms available for the analysis, investigation and identification of illegal cryptocurrency transactions on different blockchains and within smart contracts.
As Coinbase continues building out more products and services, Neutrino technology and expertise will be used to improve compliance processes, trustworthiness and transparency, as well as to better protect the end-to-end integrity of customers' cryptocurrency transactions as much as possible.
This all plays into Coinbase’s strategy of proactively working with governments and law enforcement agencies. Yet the acquisition of Neutrino caused a bit of a stir, as the startup was founded by three former members of Hacking Team - an Italian surveillance company that has sold tracking software to governments of countries with less than stellar human rights records, such as Bahrain, Saudi Arabia, and Sudan.
The CIA, DEA, DoD, and FBI are also customers of Hacking Team, making use of their products which can remotely monitor computers, decrypt files (potentially including encrypted cryptocurrency wallets), record VOIP calls, and surreptitiously activate microphones and webcams.
Coinbase founder Brian Armstrong addressed the backlash in a post shortly after the acquisition.
Subtly acknowledging that Coinbase was aware of the Neutrino founders’ previous work, Armstrong stated that the his company “did not properly evaluate everything from the perspective of our mission and values as a crypto company. We sometimes need to make practical tradeoffs to run a modern, regulated exchange, but we did not make the right tradeoff in this specific case. We will fix it and find another way to serve our customers while complying with the law.”
Coinbase does a lot more than just comply with the law, it actively works with government agencies to weaken cryptocurrency and restrict users’ civil liberties.
In acquiring Neutrino, which claims to be even able to track Monero transactions, Coinbase is going above and beyond its regulatory requirements.
Recently, news came out that both the DEA and IRS intend to buy access to Coinbase Analytics, the tracking platform that the company developed with the help of Neutrino. The deal would be worth up to a quarter of a million dollars for Coinbase.
“Bitcoin — and crypto more generally — is about the rights of the individual and about the technological protection of civil liberties,” Armstrong says.
If you’re getting involved in crypto and agree even slightly with that statement, it’s worth considering spending your money at an exchange whose CEO does more than just pay lip service to the ideology behind crypto.
So, which exchange best suits your needs? Hopefully this article has given you some backstory on both Kraken and Coinbase, explained the futures, features, and fees of each, and helped you to consider the ideology behind each company.
If you’re a beginner just looking to get started with buying cryptocurrency, either of the two will provide all the tools you need in a simple, intuitive platform. Kraken’s fees are lower, though Coinbase generally has more payment methods available (depending on your country of residence).
If you’re looking to get more involved in trading, Coinbase Pro and Kraken Trade are very similar. Kraken offers margin trading to everyone and futures to non U.S.-residents, while neither are available on Coinbase Pro as of November 2020.
If you’re concerned about privacy and furthering the trustless, decentralized ideology behind Bitcoin, it’s best to stay away from Coinbase. Their work with Neutrino, Hacking Team, and government surveillance agencies renders any claim to care about the revolutionary power of decentralization completely meaningless.
Kraken’s committment to security is one of its best features. The exchange’s support articles will guide you through the process of learning more than you can imagine about Bitcoin and security.
The choice is yours to make, and hopefully this article has given you a good idea of each exchange’s pros and cons. Enjoy your journey into crypto.