Kraken (sometimes called Karaken, Kracken or Craken) was founded in 2011 like major competitor Coinbase and has carved a niche for itself as processing the largest volume or euro transactions per day. Based in the United States, the Payward Inc. owned Kraken and it's CEO Jesse Powell have traced an interesting path to reach this point.
Following the collapse of Mt Gox in 2015, Powell was appointed as a trustee, with the responsibility of processing creditor claims and distributing funds. This is a rather thankless task, but he took on the job in the hopes of rehabilitating the name and reputation of Bitcoin. What this shows is his unwavering commitment to the concept of cryptocurrency.
While the collapse of Mt Gox did dent confidence in crypto, the largest exchange collapsing represented an opportunity that Kraken wasted no time capitalizing on. Between January 2016 and now, they acquired five smaller exchanges, helping the exchange to rapidly expand and gain market share. The funds for this growth have come from venture capital investment.
At the time of writing, Kraken seems to be suffering some growing pains. Due to a high volume of trades, the website has been experiencing periods of downtime, which have been further exacerbated by DDoS attacks. This has caused discontent and a drop in overall volume.
So is this crypto exchange the best platform for you?
Let?s start by taking a look at the services and digital currencies available on the exchange in this Kraken exchange review.
Kraken is a full service exchange and has a lot to offer customers. We will have a detailed look at each of these features to help you decide if it suits your needs for buying, selling or trading.
First though, we will look at what cryptos can be bought and sold on the platform, as arguably, this is the most important piece of information you need.
Kraken deals with the following digital currencies:
As you can see, Kraken offers a range of cryptos. Not all are available for trading, but all are eligible for conversion to other types of crypto.
Unlike other large exchanges (see our list by clicking here), Kraken are relatively quick to add new altcoins to the platform, giving some of these coins their first big break. It is one reason why the exchange has become so popular.
Now let's review the main features of the platform.
One of the main attractions of this cryptocurrency exchange for traders is the ability to trade Bitcoin on margin. If you are not already into trading you won't want to start margin trades straight away, but it is worth understanding how it is done.
Basically, a margin loan is a loan from your broker, which you use for trading. This compounds your gains, but also any losses. That's why only confident traders take the risk. Kraken is one of the few platforms where this functionality is available.
For those who like to do high frequency or complex trades, Kraken has the ability to execute advanced order types. You can easily set stop losses and other more complex orders. This does make the interface quite complex and not so beginner friendly.
Is Kraken right for you?
This Kraken exchange review below will help you to make the right decision.
Kraken is one of the biggest exchange platforms out there and it offers a range of exciting new cryptocoins. That does not mean that it is the safe or right choice for everyone, as investment needs differ from person to person. Before you decide to open an account with this trading platform, there are some things you should consider.
First of all, is the topic of fees. This exchange has some of the lowest fees of all the major exchanges. Both buyers and sellers are charged fees on this platform, but they go down as your trade volume increases. Trading fees start at 0.26% and can be as low as 0% for high volume users.
There are Kraken fees of between $5 and $15 dollars for bank deposits and withdrawals. This is not unusually high, though it does mean that it makes moving small amounts in or out of the exchange costly.
Next, we should consider volume. As one of the largest exchanges, Kraken has impressive daily volumes, which is a positive for you. What this means is that you will always have a ready market of buyers or seller for cryptocurrencies when using this platform.
Finally, we should look at the security and stability of the platform. Kraken is very secure, having learnt considerable lessons from the Mt Gox hack. They were the first exchange to submit to an external digital audit and passed with flying colors. Unfortunately, the stability of the service is lacking right now, but hopefully that can be addressed.
As you can see (and as many exchange reviews with confirm), this crypto exchange is a very powerful and safe platform. It can be used for high frequency or margin trading, as well as for simple buy and sells.
But what other advantages are there to using Kraken?
Being large, with a large user base gives Kraken a number of advantages over other exchanges, which include:
This platform has a lot going for it. However it is not perfect. There are also some disadvantages to using Kraken that you need to understand before investing.
Although Kraken has benefited from the rush to buy crypto, it has also led to a number of problems. The main disadvantages of this platform are:
Reviews show that a high number of the current problems with this exchange come down to increases in user numbers. The hope is that in the coming months the company can introduce new systems to deal with this and return the service to it's previous usability.
Now in this review, we are going to go in depth about some of the exchange specific news and features you will need to know about to get started with this currency exchange.
Kraken made a strategic move recently and acquired Cryptowatch, who had a very well regarded trading platform. This has now been fully integrated and a full range of high quality charts are now available for use.
As soon as you login to your Kraken trading account, you can select a trading pair and view the chart. These charts show the recent price movements and you can configure your charts by clicking on the gear icon at the top of your screen.
All your margin trading needs are also available in the trading interface on Kraken. We would suggest that you not start using margin loans until you have some experience. It has a great beginners guide you should read through first.
You can open and close a margin position very easily. When placing an order, you can specify a leverage percentage. What this does is automatically borrow from Kraken lending pool to the amount specified.
The system is set up to not lend more than you could repay from your available funds should the trade go badly. In the case of this happening, your trade can be automatically closed by the system before your losses become too great.
The biggest news about this app lately concerns the massive demand for the service and the instability it has created. The founder has claimed during interviews that his team is receiving up to 10 000 support requests per day and 50 000 new account sign ups.
Obviously, Kraken's systems are buckling under this volume of requests. It has been stated that new capacity is coming online in the new year which should begin bringing service levels back to normal.
As you'll see in many Kraken reviews - verification is in tiers, with lower tiers taking just a few minutes to process, but these have low account limits and restrictions. The tiers are detailed below.
Tier 0: You can login and look, but cannot create any orders or deposit money.
Tier 1: Deposits of digital currencies are accepted and you can trade in digital and fiat currency. For this tier, you need to give your full name, D.O.B and a phone number.
Tier 2: Crypto deposit and withdrawals are enabled and some restricted fiat deposits and withdrawals are possible. To get this tier, the app needs your address.
Tier 3: At this level, all fiat funding options open up to you and limits are increased. This is the most common verification tier. Kraken asks for uploads of a government issued ID and proof of address (like a utility bill).
Tier 4: This tier is for high volume users, or corporate accounts. The personal information needed for this level are at the point of being invasive. All of the documents on the ?Know Your Client? list are needed.
There are two types of fees on Kraken: banking fees and trading fees. When depositing or withdrawing funds, you are liable for banking fees, except in some regions or currencies which are fee free. These fees are a fixed value and are as low as $5. The highest fee is for international SWIFT transfers at $15.
When trading, you pay a percentage based fee. Maker (or seller) fees start at 0.16% and goal the way to 0% when sufficient volume is traded. Taker (or buyer) fees start at 0.26% and reduce to 0.10% at the highest volumes. Right now, there is no fee for simply having an active account with Kraken.
By now you are probably excited by the features available to you on Kraken. Here, we will walk you through how to use them step by step so that you can get started buying, selling or trading on the platform as soon as possible.
Before you start, you will need at least a Tier 1 account open, verified and funded. Once you have that, open up Kraken, login and follow these steps:
Selling happens in a very similar way to buying as detailed above. Follow these steps:
When trading, there are a number of advanced order types that you can use. We will detail some of them here.
Margin lending allows you to leverage your trades by using more funds that you would otherwise have available. Kraken makes this process very easy, but you will need a Tier 3 or 4 account.
Margin loans are used to take a long position, which is a bet on the price going up, or a short position, where you sell in anticipation of the price going down.