Kraken is a popular bitcoin exchange that typically sits in the top 5 biggest exchanges by volume. Find out everything you need to know about Kraken today in our review.
What Is Kraken?
Kraken is a cryptocurrency exchange that offers bitcoin and Ethereum trading, leveraged margin trading, and a dark pool (a dark pool is a private securities exchange where investors – typically large financial institutions and high net worth individuals – can make trades anonymously). The exchange is available worldwide and in most US states.
The main advantage of Kraken is its popularity: it’s typically in the top 5 or top 3 most-popular bitcoin exchanges by volume. That means traders enjoy great liquidity and easy trades. At the time of writing, Kraken was sitting just behind Poloniex in total 24 hour volume (Bittrex, Bitfinex, and GDAX have similar volume to Kraken).
Another advantage of Kraken is the diverse range of trading pairs. Like most large exchanges, Kraken has good liquidity in some lesser-used currencies. The market recently introduced new fiat pairs for Ripple, for example, including EUR, USD, JPY, and CAD.
Kraken rose to prominence after the 2014 collapse of Mt. Gox. Kraken has particularly good liquidity in the BTC/JPY pair because many Japanese-based traders jumped to Kraken from Mt. Gox after the hack.
In terms of security issues, Kraken hasn’t had any major hacks over the years. In 2016, however, a number of Kraken accounts were robbed/emptied. Kraken took some heat because they shifted the blame of the hack onto users. The users who were hacked did not enable two factor authentication.
Kraken, like most other exchanges, makes big promises about its liquidity, reliability, and security. Here are some of the specific features advertised by the platform:
- Liquidity: Fast funding and low fees, bitcoin dark pool.
- Reliability: 24/7/365 support and legally compliant platform.
- Security: Kraken uses encrypted cold storage to keep users’ funds protected.
- Bitcoin Margin Trading: Enjoy leveraged trading up to 5x, with shorting allowed.
- Advanced Order Types: Stop-loss orders and automated trading are both available.
- Proof of Reserves Audits: Not all exchanges are audited. Kraken actually pioneered the industry standard for cryptographically-verified auditing.
- Mobile Apps: Kraken offers apps for iOS, but not for Android. You can always access the platform over your web browser on any device.
- Two Factor Authentication: Kraken offers two factor authentication and PGP/GPG encryption.
Most trades (volume under 50,000 of your particular currency) are charged a maker fee of 0.16% and a taker fee of 0.26%. These fees apply for all Bitcoin trades with USD, EUR, JPY GBP, and CAD pairs. The same fees apply to most altcoins as well, including DASH/EUR, DASH/USD, and DASH/XBT.
If your volume is greater than 50,000, the fees drop to 0.14% and 0.24%. Fees continue dropping with volume all the way up to trading activity greater than 10,000,000, in which case fees are as low as 0% (makers) and 0.10% (takers).
Fees are charged on a per-trade basis. The trading volume listed above is for trades in a 30 day period.
Deposits typically cost a flat rate of $5 USD for US residents, although that rate jumps up to 10 EUR or 10 GBP for citizens of Europe and the UK. Interestingly, citizens of Japan and Canada enjoy free bank deposits. Deposits are also free for EEA countries using EUR SEPA deposits.
For withdrawals, EUR SEPA withdrawals are assessed a fee of 0.09 EUR, while USD bank wire withdrawals are $5 USD for US citizens ($60 USD for those outside the United States).
How To Open A Kraken Account
Opening a Kraken account is similar to opening an account on any other platform. Signups aren’t anonymous: Kraken will ask you basic personal information to open a basic trading account. However, if you want to open an advanced account, then you’ll need to provide more extensive documentation (similar to opening a traditional bank account).
Some customers will need to open an advanced account. Advanced accounts are required in certain jurisdictions around the world. They’re also required for those who are trading with large volume.
If you need to setup an advanced account, you’ll be required to input your government-issued ID and proof of residence. US citizens may be required to input their SSN, while citizens of Germany and Japan will require additional ID authentication.
The reason Kraken requires authentication is to prevent fraud while remaining fully compliant with KYC and AML regulations for the trading of digital assets.
Who Created Kraken?
Kraken was created by Jesse Powell, CEO and co-founder, with the goal of providing “an exceptional bitcoin experience.”
The company was founded in July 2011. By 2013, Kraken had launched its open beta. In September 2013, Kraken officially launched to the public.
Some of the notable achievements by the exchange include becoming the number one Euro exchange by volume in 2014, creating the world’s first verifiable cryptographic proof of reserves audit system in 2014, and being listed on Bloomberg Terminal in April 2014.
Kraken is one of the best-known exchanges in the bitcoin community. It’s a popular, high-liquidity exchange that offers trades across a diverse range of pairs – including more obscure pairs like Ripple/JPY and DASH/CAD. If you’re looking for a high-liquidity exchange that’s well-regarded among the community, then Kraken may be a good option.
However, it’s not the cheapest exchange, and some customers have had issue with the customer support (with many reports of customer service taking weeks to respond to ID verification requests in May and June 2017).