Language:
By Ashwani Shoda
Published on 29 Apr 2024 11 min read
As the world of cryptocurrency continues to grow, finding a reliable and secure platform for buying, selling, and trading digital assets is essential. A cryptocurrency exchange platform is an online marketplace where you can buy, sell, or trade cryptocurrencies.
It acts as an intermediary between buyers and sellers by providing a platform for them to conduct their transactions securely.
However, with so many popular crypto exchanges available, you may wonder which one is right for you. Two popular exchanges that often come up at the top of the list are Coinbase and Kraken.
We’ve prepared a comprehensive comparison guide to break down the key differences between these two giants of the crypto world to help you make an informed decision.
Whether you’re a seasoned trader or just starting in digital assets, we have all the information you need to make an informed decision. We will compare these two platforms, exploring their features, fees, and security measures to help you uncover the similarities and differences between Coinbase and Kraken and see which one may best suit your crypto needs. Let’s dive right in!
What is Coinbase?
Coinbase is a popular cryptocurrency exchange with widespread recognition in digital assets. It lets you buy, sell, and store cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and more.
Founded in 2012, it quickly gained popularity because of its user-friendly interface, making it easy for beginners to start buying and selling cryptocurrencies. The platform also offers a mobile app for iOS and Android devices, making it convenient for users to manage their investments on the go.
In addition to its essential exchange services, Coinbase offers advanced trading features through its premium platform, Coinbase Pro. These features include options such as limit orders, stop-loss orders, and margin trading.
The platform uses industry-standard security measures such as two-factor authentication (2FA) and cold storage of funds to protect against hacking attempts. In the event of any unauthorized activity on a user’s account, Coinbase has insurance policies in place to cover any losses.
Another attractive feature of Coinbase is its ability to facilitate fiat-to-crypto transactions. Thus, users can directly purchase cryptocurrencies using their local currency or sell them back without first using an intermediate currency.
Coinbase also offers additional services, such as a crypto wallet where users can store their digital assets securely. Their ” Vault ” feature provides an added layer of security by requiring multiple approvals for withdrawals from the wallet.
With its user-friendly interface, strong security measures, and ability to facilitate fiat transactions, Coinbase has become a popular choice for new and experienced cryptocurrency investors.
However, it’s worth noting that Coinbase charges higher fees than other cryptocurrency exchanges like Kraken. Fees can range from 1.49% to 3.99% depending on the transaction type and amount. However, these fees are lower on Coinbase Pro.
What is Kraken?
Kraken is one of the leading and most established cryptocurrency exchanges, offering a wide range of services for individual traders and institutional clients. Thanks to its large trading volumes, the exchange has gained a reputation for its high liquidity levels.
This means that users can buy or sell their chosen cryptocurrency anytime without experiencing significant price slippage.
Kraken offers a diverse selection of cryptocurrencies to buy and trade, including popular coins like Bitcoin, Ethereum, and Litecoin. It also supports fiat currencies such as US, euros, and Canadian dollars, allowing users to quickly deposit and withdraw funds directly from their bank accounts.
If you’re unsure whether your bank is the best fit to support your crypto investment, we recommend checking out our guide on how to choose the right bank.
Kraken’s user-friendly interface makes it easy for beginners to navigate and execute trades. It also caters to more experienced traders with advanced order types such as limit orders, stop-loss orders, and margin trading.
Therefore, the exchange utilizes advanced encryption techniques to protect user data and funds, with most customer assets being stored in offline cold storage wallets. This provides an extra layer of protection against potential cyber-attacks.
Kraken is a reliable and secure cryptocurrency exchange that offers a variety of features for both beginner traders looking to enter the market and experienced investors seeking more advanced trading options.
It’s worth noting that while Coinbase primarily targets retail investors with its simple interface and ease of use, Kraken caters to professional traders by providing a more comprehensive range of tools and features.
Supported Cryptocurrencies by Coinbase
Coinbase was founded to buy and sell Bitcoin, but over the years, it has expanded its list to include some of the top cryptos in the market. Currently, Coinbase supports around 5,500 assets, including major players like Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), and Ripple (XRP).
Additionally, Coinbase also supports a variety of smaller altcoins, such as Chainlink (LINK), Stellar Lumens (XLM), EOS (EOS), and Tezos (XTZ). These coins have gained significant popularity recently and provide users with more diverse investment options.
Moreover, Coinbase has recently announced plans to expand its list further by supporting several new coins, including Cardano (ADA) and Polkadot (DOT).
One key advantage that sets Coinbase apart from other exchanges is its rigorous listing process. Before listing any new coin on its platform, Coinbase conducts thorough evaluations based on various factors such as security, compliance with legal regulations, and customer demand.
It ensures that only reputable coins are added to their platform, which gives users a sense of trust when investing in these assets. However, if you still need more protection for your assets, you can start an investment limited liability company (LLC) that allows its members to mitigate potential risks associated with individual investments.
Supported Cryptocurrencies by Kraken
Kraken supports around 247 cryptocurrencies, including well-known coins such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).
It also offers support for lesser-known coins like Augur (REP), Stellar Lumens (XLM), and Monero (XMR). The platform also supports fiat currencies, allowing users to deposit and withdraw funds in US dollars, Canadian dollars, euros, British pounds, Japanese yen, and Swiss francs. This makes it easier for users to enter and exit the crypto market without going through additional exchanges or conversion fees.
In addition to fiat currencies, Kraken supports stablecoins such as Tether (USDT) and USD Coin (USDC). These coins are pegged to a specific value—usually 1:1 with major fiat currencies—making them less volatile than other cryptocurrencies.
It is worth noting that both exchanges are constantly adding new cryptocurrencies to their platform so that the list may change in the future. Kraken’s wider variety may appeal more to experienced traders looking to diversify their portfolios.
Fee Comparison of Coinbase and Kraken
Fee structures are an essential factor to consider when choosing a cryptocurrency exchange platform. Understanding the fees associated with transactions, deposits/withdrawals, and currency conversions will help you decide which exchange is more cost-effective.
Coinbase operates on a maker-taker fee model, where fees range from 0% to 0.50%, while the taker fee can be as high as 3.99%. Higher-tier users with higher trading volumes and liquidity receive lower fees. These fees can add up quickly for small traders and become a significant expense.
On the other hand, Kraken has a flat-fee structure based on the trading volume in the past 30 days. For makers, the fee starts at 0.16% for less than $50k in trading volume and decreases to 0% for volumes above $10 million. Takers pay a fixed percentage of their trade amount, ranging from 0.26% to 0%.
This structure favors smaller traders as they are not charged higher fees based on their trading activity. Aside from these standard transactional fees, additional charges for specific services such as margin trading or staking cryptocurrencies (earning rewards for holding coins) may exist.
Transaction Fees
Coinbase and Kraken charge transaction fees for buying or selling cryptocurrencies on their platform. Coinbase charges a flat 1.49% for all purchases and sales made through their platform. On the other hand, Kraken has a tiered fee structure depending on your trading volume over the past 30 days.
The higher your trading volume, the lower your transaction fees. For example, if your trading volume is less than $50k in 30 days, you will be charged a maker fee of 0.16% and a taker fee of 0.26%. If your trading volume exceeds $10 million in 30 days, you will only pay a taker fee of 0.10%.
Deposit/Withdrawal Fees
Coinbase doesn’t charge fees for deposits made with bank transfers (ACH) or cryptocurrencies, only a small convenience fee for credit/debit card purchases, at around 3%. There are no additional fees when withdrawing funds from Coinbase via bank transfer (ACH).
Kraken also offers free deposits for fiat currencies and cryptocurrencies; however, they charge withdrawal fees depending on the withdrawn currency. These fees range from $1 for a Bitcoin withdrawal to $35 for an international wire transfer.
Conversion Fees
Coinbase charges 0.50% for all cryptocurrency conversions on the current market price as their fee for facilitating the trade between two cryptocurrencies. Since Kraken has a tiered fee structure, the higher your trading volume, the lower your conversion fees will be.
For example, if your trading volume in 30 days is less than $50k, you will pay a conversion fee of 0.20%. If your trading volume exceeds $10 million in 30 days, you will only pay a conversion fee of 0.10%.
How to Set Up an Account: A Detailed Walkthrough
Setting up accounts on Coinbase and Kraken is simple and identical, but it’ll be helpful to understand the steps involved beforehand.
Let us guide you through the account setup process for both platforms and highlight some key features to consider before choosing which one is right for you.
1. Visit either Coinbase or Kraken’s website and click on the “Sign up” button on their homepage.
2. Enter your full name, email address, and password. Make sure to choose a strong password that is not common yet easy to remember.
3. Click on “Create Account” and verify your email address by clicking on the link sent to you by Coinbase/Kraken.
4. Once your email is verified, you will be prompted to verify your phone number by entering a code sent via SMS.
5. Next, you must provide personal information, such as your date of birth, country of residence, and source of funds.
6. After providing this information, you will be asked to upload a government-issued ID for mandatory KYC (Know Your Customer) verification.
7. Set up 2FA to secure your account against unauthorized access.
8. Once your account is secured and identity verified, you can add a payment method, such as a bank account or credit/debit card, to start buying cryptocurrencies.
It is worth noting that both Coinbase and Kraken have different levels of verification depending on how much cryptocurrency you want to buy/sell or withdraw/deposit. Another difference is that Coinbase requires users to link a bank account or credit/debit card before buying or selling cryptocurrencies.
In contrast, Kraken allows you to fund your account only through wire transfers. It is essential to understand these levels before proceeding with any transactions on either platform.
Additional Services
Coinbase and Kraken offer additional services beyond buying and selling cryptocurrencies. While some offerings may overlap, each exchange has unique features that cater to a diverse user base.
It is essential to weigh these additional services and other factors when deciding which platform best suits your needs as a cryptocurrency investor.
One of the most notable additional services offered by both of these exchanges is margin trading. This feature allows both retail and institutional traders to borrow funds to increase their buying power and boost profits.
Coinbase only offers margin trading for specific cryptocurrencies, while Kraken has a broader range of options.
Both exchanges also offer staking services, allowing users to earn interest on specific cryptocurrencies held in their accounts. Staking rewards vary depending on the currency and market conditions but can be a passive way for investors to earn income in addition to any gains made through price appreciation.
In terms of customer support, both Coinbase and Kraken have dedicated teams ready to assist with any issues or inquiries. Coinbase offers 24/7 customer support, accessible to all users regardless of their account level.
On the other hand, Kraken’s customer support is only available during business hours on weekdays. They also offer email support but do not have a live chat or phone option.
Pros and Cons of Each Platform
Both platforms offer a wide range of coins, user-friendly interfaces, and competitive fees. However, each platform has unique features and drawbacks, which you should know before deciding. Ultimately, the best platform for you will depend on your individual needs and preferences.
Pros of Coinbase:
1. User-Friendly Interface
One of the most significant advantages of using Coinbase is its user-friendly interface. The platform is designed with beginners in mind, making buying, selling, and trading cryptocurrencies easy.
2. Wide Range of Coins
Coinbase offers many popular cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and more, allowing users to diversify their portfolios without using multiple exchanges.
3. High Liquidity
With over 68 million registered users worldwide, Coinbase has high liquidity, meaning buyers and sellers can easily find matches for their trades anytime.
4. Strong Security Measures
Coinbase takes security seriously and has implemented 2FA and cold storage to protect against hacking attempts.
Cons of Coinbase:
1. Limited Geographic Availability
Coinbase operates in around 100 countries, which may limit its availability for some users worldwide.
2. Non-Anonymity as a Regulated Exchange
Users must provide personal information such as ID verification, which defeats the purpose of cryptocurrency – anonymity.
3. High Fees
Compared to other exchanges in the market, Coinbase’s fees are on the higher end, with transaction fees ranging from 0.5% – 4%.
Pros of Kraken:
1. Low Fees
Kraken boasts some of the lowest fees in the industry, with transaction costs starting at just 0% for makers (those who add liquidity) and 0.26% for takers (those who remove liquidity).
2. Advanced Trading Options
Kraken offers a variety of trading options, such as margin trading, futures, and staking, which make it a popular choice for more experienced traders.
3. High Level of Security
Similar to Coinbase, Kraken also has robust security measures in place, including 2FA and cold storage to protect users’ funds.
4. Global Availability
Unlike Coinbase, Kraken operates in over 190 countries, which makes it accessible to a larger user base.
Cons of Kraken:
1. Less User-Friendly Interface
While the platform offers advanced trading options, the interface may be overwhelming for retail investors and beginners.
2. Lower Liquidity
Compared to Coinbase’s high liquidity, Kraken’s lower user base may result in longer wait times to match trades.
3. Limited Coin Selection
Kraken offers some popular coins, such as Bitcoin and Ethereum, but its coin selection is not as diverse as Coinbase’s.
doola – Securing Your Business Interests
Due to cryptocurrency’s complex and ever-changing nature, many individuals need help accurately reporting their digital assets for taxation. This is where doola comes in as a trusted partner for tax compliance in the digital, evolving world. The platform offers a comprehensive set of tools and services designed specifically for navigating the complexities of crypto taxes.
With doola’s Total Compliance Package, you can easily import your transaction data from various sources and generate detailed reports to automate your tax filings. However, doola isn’t limited to just taxes. It offers a complete business-in-a-box solution with unique features such as company formation, tax filing, and CPA consultation. It can do wonders for your finance management and operations.
To know more, book a free consultation with our experts today!
FAQs
Can I buy cryptocurrencies using local currency on both platforms?
Yes, Coinbase and Kraken allow users to buy cryptocurrencies such as Bitcoin with fiat currency (USD or EUR). However, while Coinbase offers limited cryptocurrency options (Bitcoin, Ethereum, Litecoin), Kraken allows users to purchase over 50 cryptocurrencies with fiat currencies.
Can I use my credit/debit card to purchase cryptocurrencies on both platforms?
Yes, you can make purchases on both platforms using your credit or debit card; however, please note that this payment method has higher fees than bank transfers.
How secure are my funds on Coinbase and Kraken?
Both platforms take extensive measures to ensure the security of their users’ funds. Coinbase holds 98% of its customer’s digital assets in offline storage, while Kraken offers multi-factor authentication and cold storage for user funds.
Is there a minimum amount required to start trading on Coinbase and Kraken?
Coinbase does not have a minimum deposit requirement; however, it has a minimum trading limit of $2.00. On the other hand, Kraken has a minimum deposit requirement of $10 or equivalent.
