Kraken is a prominent United States–based cryptocurrency exchange established in 2011. It gained notable attention when it became one of the earliest bitcoin exchanges to be featured on the Bloomberg Terminal. Valued at approximately $10.8 billion as of mid-2022, Kraken provides users with a platform to trade a diverse range of cryptocurrencies such as BTC, ETH, DOT, ADA, DOGE, and XMR. Moreover, it supports fiat currencies including USD, EUR, JPY, GBP, CAD, AUD, and CHF. Based in San Francisco, California, and owned by Payward, Inc., Kraken is headed by CEO Dave Ripley. The exchange is renowned for its longevity, market reputation, diverse range of supported cryptocurrencies, and high-standard security measures, making it a top choice for traders globally. In this article, we will delve deeper into Kraken’s history, features, security protocols, and more.
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History of Kraken Exchange
Established in 2011, Kraken formally began its trading operations in 2013 under the ownership of Payward Inc. Dave Ripley, who succeeded co-founder Jesse Powell in 2022, currently helms the exchange. Kraken stands apart due to its intuitive integration with linked bank accounts, enabling seamless transfers between bank accounts and the Kraken trading platform.
In 2014, during a period when cryptocurrencies were gaining traction, Kraken and Coinbase were chosen to provide bitcoin trading market data to the Bloomberg terminal, a pivotal achievement that significantly bolstered Kraken’s market presence. Bloomberg’s clientele could access cryptocurrency prices, charts, news, and social media updates through the terminal, further enhancing Kraken’s credibility in the trading community. Subsequent to this collaboration, Kraken joined hands with chart-service provider, TradingView. This partnership, coupled with the introduction of multiple cryptocurrencies and fiat currencies such as USD, GBP, and JPY to its platform, solidified Kraken’s position in the market.
Advantages of Kraken Exchange
Kraken’s reputation has been solidified not just by its longevity in the market but also by its commitment to security, user experience, and comprehensive trading options. In the subsequent sections, we will delve into the specific advantages that set Kraken apart, offering insights into why many in the crypto community have chosen it as their primary trading hub:
- High Security: Kraken employs state-of-the-art security measures, including two-factor authentication and cold storage solutions.
- Broad Cryptocurrency Selection: Offers trading options for a wide variety of cryptocurrencies.
- User-Friendly Interface: Both beginners and experts find the platform easy to navigate.
- Global Reach: Kraken is accessible in many countries, making it a global platform.
Disadvantages of Kraken Exchange
Kraken, despite its prominence and widespread acclaim, has its set of drawbacks. Understanding these potential pitfalls is vital for users to make an informed decision about where and how they trade:
- Complex Features for Beginners: Some features might seem complex for users new to crypto trading.
- Limited Payment Options: Unlike some competitors, Kraken offers fewer payment methods.
What Are Kraken’s Fees?
The fee structure at Kraken is designed to be competitive and transparent. Depending on the trading volume and the type of transaction, fees can vary:
|Transaction Type||Fee Range|
|Spot Trading||Taker Fee 0.10% – 0.26%Maker Fee 0.00% – 0.16%|
|Stablecoin||Taker Fee 0.001% – 0.20%Maker Fee 0.00% – 0.20%|
|Futures Trading||Taker Fee 0.01% – 0.05%Maker Fee 0.00% – 0.20%|
|Margin||0.01% – 0.02%|
Kraken operates with a comprehensive fee structure, catering to various trading and transaction activities. The fees are designed to incentivize traders and are based on the volume of trading activity over a rolling 30-day period.
- Spot Crypto: Kraken employs a maker-taker fee system with volume incentives. For instance, a user with a trading volume of $0 to $50,000 in the past 30 days would incur a maker fee of 0.16% and a taker fee of 0.26%. The fee schedule varies as the 30-day trading volume increases, with substantial discounts for higher volumes.
- Stablecoin, Pegged Token, and FX Pairs: Fees for these currencies differ based on whether the stablecoin is the base or quote currency. Notably, trading volume discounts are exclusively based on crypto trading volume.
- Margin: This involves fees applied both at the opening and closing of margin positions. Eligible clients can maintain open spot positions on margin indefinitely, provided the margin requirements are met.
- Futures: Fees for futures trading are contingent on trading volume over the past 30 days. For instance, a user trading between $0 and $100,000 would encounter a maker fee of 0.0200% and a taker fee of 0.0500%.
Their fees are based on a “maker-taker” model, and they offer volume discounts based on a user’s trading activity over the past 30 days.To dive deeper, here’s a breakdown of the fees for Spot Crypto for a 30-day trading volume of:
- $0 – $50,000: Maker Fee is 0.16% and Taker Fee is 0.26%
- $50,001 – $100,000: Maker Fee is 0.14% and Taker Fee is 0.24%
- $5,000,001 – $10,000,000: Maker fee is 0.02% and Taker Fee is 0.12%
- $500,000,000+: Maker Fee is 0.00% and Taker Fee is 0.04%
Please note that fees for volumes ranging from $100,000,000 to $500,000,000 are part of a fee trial that lasts until September 30, 2023. Also, volume generated with Instant Buy does not count towards the 30-day volume incentives.
Kraken and Stablecoin Fees
For trades involving stablecoins, Kraken charges a flat fee of 0.20% for a 30-day trading volume for $0 – $50,000. However, the fee structure is composed so that the fees vary depending on the volume where the bigger the volume is, the smaller the fee is. For instance:
- $0 – $50,000: Both Maker and Taker Fees are 0.20%
- $50,001 – $100,000: Both fees are 0.16%
- $10,000,001 – $100,000,000: Maker Fee is 0.00% and Taker Fee is 0.01%
- $100,000,000+: Maker Fee is 0.00% and Taker Fee is 0.001%
This fee schedule is specifically for pairs where the stablecoin is in the base currency (like USDT/USD or DAI/USDT) and pegged tokens (like TBTC/BTC or WBTC/BTC).
Kraken Pro Fees
Kraken Pro, designed for advanced traders, adopts a tiered fee structure. The more you trade, the lower the fees. Kraken Pro, primarily designed for advanced and institutional traders, offers a plethora of features for efficient trading. Here are the fee structures related to Kraken Pro:
- Spot Trading: The fees are based on your trading volume over the past 30 days. Fees decrease as trading volume increases, with volume incentives set to motivate traders.
- Margin Trading: In addition to spot trading fees, margin traders also encounter fees at the opening and closing of margin positions. This fee structure includes numerous cryptocurrencies, each with its unique fee percentages.
- Futures Trading: Kraken Futures offers a separate fee schedule based on trading activities in the previous 30 days. It’s vital to note that volume in Kraken spot markets, FX pairs, and stablecoin order books doesn’t contribute to any volume-based discounts on Kraken Futures and vice versa.
Here is an overview of Kraken’s margin fees for certain currencies:
|Currency||Opening Fee||Rollover Fee|
|ADA (Cardano)||0.02%||0.02% per 4 hours|
|BTC (Bitcoin)||0.01%||0.01% per 4 hours|
|ETH (Ethereum)||0.02%||0.02% per 4 hours|
|GBP (British Pound)||0.015%||0.015% per 4 hours|
|USDT (Tether)||0.02%||0.02% per 4 hours|
Kraken Instant Buy Fees
When utilizing Kraken’s Instant Buy/Sell Services for transactions like custom orders or recurring purchases, the fees comprise both a displayed fee and a spread incorporated into the price. This spread is based on multiple factors, such as transaction size, the particular asset, and prevailing market conditions. For instance, in times of heightened market volatility or low liquidity, Kraken might levy a higher spread. It’s essential to understand that this spread is determined before order execution and can vary for similar transactions.
Remember, it’s always a good idea to periodically review the exchange’s official website or platform for the most up-to-date fee information.
How Do You Fund a Kraken Account?
You can fund your Kraken account via the following options:
- Wire Transfer: Accepted globally and can take 1-5 business days.
- Credit Card: Instant but might have higher fees.
- Digital Currency: Transfer your crypto assets directly to your Kraken wallet.
To fund your Kraken account, follow these steps:
- Sign in to your Kraken account.
- Click on the “Deposit” option.
- Choose the currency you want to deposit (such as USD).
- Follow the provided instructions to deposit digital assets, buy assets instantly with a card, or fund your account with traditional currencies.
- For cash deposits, select a suitable deposit method like bank transfers or other available options.
- For cryptocurrency deposits, you can directly send your crypto assets to your Kraken wallet address.
- Be aware of minimum deposit amounts, fees, and processing times associated with each deposit method.
- If you’re depositing local currency, you might need to link your bank account and follow the provided instructions.
Does Kraken Exchange offer support for institutional investors?
Yes, Kraken offers specialized services for institutional investors. These services include dedicated account managers, advanced trading tools, and higher security features.
According to a 2019 Businesswire article, Kraken’s completed threacquisition of Interchange, a service provider for institutional cryptocurrency accounting and portfolio reconciliation, which further emphasizes its commitment to catering to institutional clients by providing specialized services such as cryptocurrency accounting and portfolio reconciliation for institutions.
Kraken and Developer Grants
Kraken supports the crypto community by offering developer grants. These grants help fund individual developers and teams working on innovative projects in the blockchain and crypto sectors. Their grant programs include:
- Bitcoin and Crypto Developer Grant Program: Kraken provides grants to developers and projects without obligations, allowing them to share updates on their work. This program aims to support the impact of their contributions.
- Ethereum Grants: Kraken matched $150,000 in grants to Ethereum projects, recognizing the maturity and significance of the Ethereum ecosystem.
- Bitcoin Developer Center: Kraken granted $150,000 to the Brink Bitcoin Developer Center, which supports established open-source developers and nurtures new talent through fellowships.
- University of Wyoming Education Grant: On their 10th anniversary, Kraken committed to offering up to $300,000 over three years to the University of Wyoming. This grant aimed to support educational efforts related to cryptocurrencies.
- Bitcoin Rust Maintainer: Kraken funded a full-time Bitcoin Rust maintainer in collaboration with Brink, focusing on the development of the Bitcoin Rust programming language.
Is Kraken Secure?
Security is paramount at Kraken. The platform has gained a reputation for its robust protective measures. Some of these measures include:
- Two-factor authentication.
- Cold storage solutions.
- Encrypted wallets.
- Regular internal audits.
- Active bug bounty programs where external entities are rewarded for identifying potential vulnerabilities.
These measures ensure users have a safe trading experience and can trust the platform with their assets.
Concerns About Kraken
While Kraken boasts numerous accolades and advantages, it’s not devoid of concerns. Some users have reported issues with delayed customer service response times. Furthermore, certain trading tools and features, especially those tailored for advanced traders, can seem complex and overwhelming for beginners. It’s essential for potential users to assess these aspects alongside the platform’s benefits when considering Kraken for trading.
Kraken vs. Other Cryptocurrency Exchanges
When compared to competitors like Coinbase, Binance, or Gemini:
|Number of Cryptos Offered||50+||40||100+||30+|
Kraken’s Affiliate Program
Kraken’s affiliate program incentivizes users to promote the platform. Referrers can earn up to 20% of the trading fees generated by the clients they bring to the platform, with potential earnings capped at $1,000 for each referral. Below is a comprehensive breakdown of the benefits and requirements for the affiliate program.
Kraken’s Affiliate Program: Benefits and Payouts
- Commission Structure: Affiliates earn a competitive 20% commission on the trading fees collected from referred clients. This commission is sustained for the client’s entire lifetime with Kraken.
- Maximum Payout: There’s a cap on earnings per referral, ensuring affiliates can earn up to $1,000 USD for each individual they refer.
- Fee Inclusions: The trading fee calculations encompass various charges, such as spot and futures trade fees, spot margin opening fees, and spot margin rollover fees.
- Payment Method: Unlike many other programs that opt for exchange account payouts, Kraken directly credits your bank account.
- Currency and Transfer: The payouts are facilitated via bank transfers, and you’ll receive the funds in your bank account’s default currency.
- Flexibility: Kraken’s program has no specific deadlines for affiliates.
Kraken’s Affiliate Program: Eligibility and Requirements:
- Social Media Influencers: Individuals or entities should boast a following of at least 5,000. While finance or crypto specialization is preferred, non-finance or non-crypto social media accounts are still welcome.
- Websites and Mobile Apps: These platforms need to be related to finance or crypto. There’s no mandatory requirement concerning traffic volume.
- Facebook Groups or Pages: These should have a follower count surpassing 5,000 and need to be oriented towards finance or crypto topics.
- General-purpose Sites: Online shopping platforms and news websites that feature finance or crypto sections are acceptable.
- Ineligible Properties: Applications from entities identifying their Partner Type as “Offline” or “Other”, those using private social media accounts, or those linking to unowned properties will be automatically declined. Additionally, LinkedIn accounts aren’t acceptable for property type.
- Geographical and Sectoral Restrictions: Kraken won’t affiliate with U.S.-based websites associated with online gambling, like Bovada.
Should You Use Kraken?
To use Kraken is to opt for a platform that emphasizes security, variety, and user experience. Kraken is generally considered a reputable cryptocurrency exchange with several advantages. It offers top-notch security and low trading fees, making it an attractive choice for both new and experienced investors. Kraken supports a solid range of available cryptocurrencies, providing options for diversification. However, it’s essential to understand your trading needs, compare it with other platforms like Coinbase, and ultimately evaluate if Kraken aligns with your preference.
How Big Is the Kraken Exchange?
As of now, Kraken is among the top 10 global exchanges in terms of trading volume. It supports millions of users worldwide and handles billions in trades annually. Here are some numbers that further clarify Kraken’s influence:
- As of 2022, Kraken has been valued at US$10.8 billion.
- According to BitDegree, Kraken had its largest daily trading volume on March 12, 2023 of US$1.21 billion.
How Do You Get a Coin Listed On Kraken?
Getting a coin listed on Kraken involves a meticulous process:
- Project Submission: Developers submit a comprehensive proposal detailing the cryptocurrency.
- Preliminary Review: Kraken’s team conducts an initial review assessing the coin’s utility, security, and demand.
- Deep Dive: If the coin passes the initial review, a deeper analysis of its technical aspects and market viability is conducted.
- Integration Testing: The coin undergoes integration testing to ensure compatibility with Kraken’s platform.
- Listing and Launch: Once approved, the coin is listed on Kraken and becomes available for trading.
- Is Kraken a trusted exchange? Yes, Kraken is a trusted exchange with a solid reputation in the crypto community.
- How is Kraken different from Coinbase? Kraken offers a broader range of cryptos, and its fee structure can be more competitive.
- Is Kraken an exchange or a wallet? Kraken is primarily an exchange, but it also provides wallet services for users to store their cryptocurrencies