What are the differences between Coinbase and Kraken? The Kraken and Coinbase are two of the most popular and high-profile crypto exchange platforms you will find out there.
You may have to choose one among these two according to your needs, but for that, knowing the differences between them is vital. In this article, you will come to know about the distinctive features of Kraken and Coinbase, fees, security, ease of use and more.
Depending on your trade volumes and needs, this will help you to make the right choice. Check out Differences Between Coinbase and Bittrex Exchange.
As for the trading opportunities, Kraken offers crypto trading along with futures, margin accounts, staking and more.
On the other hand, on the Coinbase platform you can also trade, stake, and enjoy institutional perks but it is somewhat better for the beginners in the crypto industry.
While Kraken is more favored for its lower and favorable fee structure, Coinbase is considered to be a better platform for digital storage.
Both Kraken and Coinbase are two of the most widely used cryptocurrency exchanges in the world that offer a large number and varied types of crypto assets for traders to trade with.
You can earn interest rewards on both these platforms for holding your crypto coins over a fixed period of time, a process called ‘staking.’
Even the institutions find these platforms to be quite favorable in terms of investment options and opportunities.
10 Differences Between Coinbase and Kraken
In spite of the similar features, a large selection of assets offered, mobile trading options, and trading purposes served, the differences between Kraken and Coinbase trading platforms are quite significant and worth taking into account.
You may find Kraken to be a better choice as a trader but with a wider range of institutional services and educational resources, Coinbase too is a good platform for the beginners especially.
Here are a few major differences between them for you to know and find it easy to determine which one among these two exchanges is best suited for your crypto needs.
The Coinbase platform was founded in 2012 by Fred Ehsram and Brian Armstrong. It has millions of users all over the world which makes it one of the biggest Bitcoin exchanges in the world.
The head office of this company is located in San Francisco, California but it operates in more than 30 countries across the globe. As for its wallet, it is available in more than 190 countries.
This platform comes with different useful products apart from the main retail exchange of crypto for fiat currency. These are the GDAX or Global Digital Asset Exchange, also known as Coinbase Pro, and an API for the developers.
Kraken, on the other hand, was founded by Payward Inc in 2011 and is well-reputed for its robust security and liquidity. It also has got quite a large number of users but only adds up to hundreds of thousands.
It is a reliable exchange to buy and sell crypto coins as well as exchange them. The company is committed to improvement and innovation which has enabled it to be the first exchange to pass a cryptographic appraisal.
2. Customer Support
Both these crypto platforms have a very good and intuitive FAQ section on their respective websites but that answers the general questions only. Each has a customer support team to answer all your other queries.
As for Coinbase, the platform offers customer support through phone, email, as well as their dedicated Help Center. Their response time is quite reasonable, though there are some complaints from some users whose issues were left unresolved for more than a day.
Kraken, on the other hand, is known for its useful and effective customer support team which is quite responsive and quick. Typically, Kraken offers its service to the customers through email and the Help Center.
One unique aspect of Kraken in terms of customer support is that there are human experts and advisors available for consultations for individuals and account management support from a manager for the advanced traders and institutions, unlike Coinbase.
3. Account Benefits
When you have an account with Kraken, you can make both fiat-to-crypto as well as crypto-to-crypto transactions. As for the fiat currencies, the platform supports USD, EUR, GBP, CHF, CAD, AUD, and JPY.
In addition to that, you will also be able to make OTC or Over The Counter trading with a minimum order placing of $100,000, apart from the other regular features such as margin trading, futures trading, and staking.
You can also use the Kraken Pro platform for advanced trading and get constant support from the account manager along with several other helpful resources such as videos and webinars and know more about the basics of Bitcoin.
The Kraken mobile app will allow you to trade on the go by using it on an iOS or an Android device, though it is not available to the US-based users.
In comparison, the perks offered with the account of Coinbase include staking and trading with a diverse range of crypto coins, wallet services, and Coinbase Earn crypto rewards from Bitcoin, Ethereum, and several other assets.
It also offers Coinbase Pro and Coinbase Card products along with other useful institutional services.
4. Working Process
Both these exchanges, Coinbase and Kraken, will allow you to invest in different types of Altcoins and trade with different types of crypto coins but the working process is slightly different for each.
The account setting and verifying process of Coinbase is quite easy as is the depositing of funds to the accounts for the traders based in the US.
On Coinbase, once you create your account and confirm the email address, you can set up the two-step authentication process if needed.
Then, you will have to prove your identity with an official form of identification approved by the platform. Once all these are done, you can include your payment method and begin trading.
However, in comparison, Kraken follows much more preventive measures in this regard, though the setting up process of the account is pretty similar to that of Coinbase.
Typically, the fund transfer and account verification processes on this particular platform are pretty complex, much akin to bank account verification.
The platform offers different levels of verification such as Starter, Express, Intermediate, and Pro. And, any new fiat deposits made on this platform need a 72-hour hold before a withdrawal.
5. Security Features
The multi-layer security features of Kraken include a strict verification of all withdrawal addresses and whitelisting those that are approved. This restricts access to any unapproved and external address to the system.
It also incorporates Two-Factor Authentication through Google Authenticator and does not allow account recovery via SMS to prevent hacking the system through a phone.
Then there is the U2F hardware key for additional security to the offline storage and the global settings lock feature that freezes an account setting for a specific period of time that may range anywhere between 1 to 29 days to prevent access to your account when you are away and making changes to it.
On the other hand, the security of Coinbase is slightly weaker than that of Kraken. The security features of this platform include Two-Factor Authentication but it is done through both SMS and/or the Google Authenticator app.
This however will allow access to an account if only the time-sensitive, six-digit passcode is correct. However, the SMS 2FA feature is not very secure since your phone can be stolen.
The built-in wallet of Coinbase is also quite secure since it has a password and biometric access controls. The recovery phrase is actually a 12-word encryption that protects your assets.
6. Storage of Funds
When it comes to storing the funds of the customers safely, both these platforms have different ways to ensure that.
As for Kraken, they store 95% of the crypto assets in well-guarded, air-gapped cold storage. They also have strict supervision across the whole platform and include several checkpoints all through the signup process.
On the other hand, Coinbase stores 98% of the funds of the customers in cold storage offline that are geographically distributed.
In order to provide a complete peace of mind to the users, the platform also offers FDIC or The Federal Deposit Insurance Corporation insurance coverage of up to $250,000 on the USD cash balance of an individual.
This is a huge plus for the traders based in the US. In addition to that, this platform also offers a crypto vault in order to secure the stored crypto assets even further.
In order to set up these vaults, numerous user approvals are required to ensure the authenticity of the funds withdrawn.
These vaults are typically time-locked which means that the withdrawal request will be canceled automatically if all the approvals necessary for a particular transaction are not received within 24 hours.
7. Transaction Fees Structure
One of the most significant points of difference between Coinbase and Kraken is in the terms of the transaction fee structures of the respective platforms.
The maker-taker fee structure of Kraken is quite below the standards in the industry. The platform usually calculates the amount to be charged as fees for a transaction depending on the volume of trade of a user in the past 30-day rolling period.
Ideally, the maker and taker fees charged by this platform are inversely proportional to the trading volume. This means that, the higher the trading volume, the lower will be the trading fees on Kraken wherein the maker fees may range between 0% and 0.16% and the taker fees will be within 0.10% and 0.26%.
On the other hand, the same fee structure of Coinbase is about 4%, which is one of the highest fee structures that you will find in the industry. However, the upgraded Coinbase Pro account charges a little lower fee but not as low as that of Kraken.
For example, a $1,000 trade on Coinbase Pro will cost you $5 or 0.50% and on Coinbase the same would be $40 or 4% in comparison to that of $1.60 or 0.16% on Kraken.
8. Ease of Use
Both Coinbase and Kraken offer a better and more reliable user experience but when it comes to the ease of use of these two platforms that of Kraken can seem to be pretty trying especially when you want to quickly start trading on this platform.
This is primarily due to the rigid security measures of this platform, which, however, is a welcome feature for those investors who deal with a large sum of money.
In contrast, the Coinbase platform is pretty easy to use making it a good one for the beginners. The startup process is quite quick and the trading features as well as the funding options are pretty simple.
This allows even the most inexperienced crypto traders and investors to start performing right away. The best part of this platform is that it allows the new users to initiate trading crypto coins worth up to $9,000 with just only one phone number verification.
9. Additional Features
In terms of additional features, Kraken offers Cryptowatch. This is a trading terminal that typically generates data of more than 8000 crypto markets and analyzes them for the users.
This is a free service that allows the crypto traders to observe the market trends and monitor the movements in the prices of the crypto assets across a wide range of crypto platforms.
This helps them to set precise price alerts to facilitate their trades. As for the investors, this service can be upgraded to get a more timely notice. However, this will call for an additional fee of 1% for each alert sent.
On the other hand, the Coinbase platform comes with an additional feature as well. They typically provide a personal hot wallet that can be used by them to deposit funds, store crypto coins, and/or to withdraw currency.
The best part is that you will not need to be a registered user of this platform to use this service. This happens to be an extremely beneficial feature especially for those traders who indulge in multiple and frequent transfers of several cryptocurrencies and fiat currencies.
This is much unlike Kraken which also offers a digital wallet to their clients to store crypto coins but that is not a personal wallet service.
10. Other Differences to Consider
Here are some other smaller yet significant differences between Kraken and Coinbase that are also good to know about by every user of these two crypto platforms.
In terms of availability, Kraken allows trading in more than 170 countries and Coinbase in over 100 countries. While Coinbase is not available to the Hawaiian residents, the services of Kraken, on the other hand, are not available to the residents of New York or Washington.
The types of transactions supported by each of the two platforms are also different, though a few are the same.
On the Kraken platform you can buy, sell, and trade crypto coins, deposit or withdraw currency, and do stop order, limit order, margin trading, options trading, and futures trading but on Coinbase you can only buy, sell, exchange, send, and receive crypto tokens.
In terms of margin trading, it is a service added to the Coinbase platform in early 2020 with limited availability and low leverage of up to three times only. Kraken, on the other hand, offers margin trading as per the standard of the industry with leverage up to five times.
When it comes to currency support, both of these exchanges support fiat currencies such as USD, EUR, GBP, CHF, CAD, AUD, and JPY, as said earlier, but when it comes to support to crypto coins that of kraken is quite more as compared to that of Coinbase.
Kraken, therefore, comes with a much broader selection of crypto coins to offer to its users. And, this selection is different for each provider.
For example, Kraken supports FLOW and ICX but not BAND. On the other hand, you can trade with FIL and YFI on Coinbase but not with SC or TRX.
Both these platforms accept deposits in a variety of methods from all over the world, and some of them are common to both. These are ACH bank transfer, SEPA, Apple Pay, Swift, Fedwire, and cryptocurrencies.
As for Kraken, the additional methods supported are Google Pay, SEN, OSKO bank transfer, FPS/BACS, PayID, SIC, and CHAPS. It also accepts payment via debit card and credit card but not from all countries such as the USA.
On the other hand, Coinbase also accepts payments made via other sources such as PayPal, SOFORT, iDEAL, debit cards, and credit cards.
Which is Better – Coinbase or Kraken?
By now, after going through all the different aspects of these two crypto trading platforms, you may have concluded that there is no clear winner among them.
Both these platforms are exceptional options for trading digital assets. This means that, when it comes to choosing which among Coinbase and Kraken is better, it boils down to your personal preferences as well as your crypto trading needs.
However, you may prefer using the Coinbase platform if:
- You are new in this exciting world of cryptocurrencies
- You do not want to indulge in a complex exchange process
- You want an exchange that accepts payments made through debit and credit card both and
- You want a platform that is more commonly used by people to get easy access to the global market.
On the other hand, you may want to use the Kraken platform to trade your crypto if:
- You want an exchange where there are a large number of crypto coins available to trade with
- You want the trading fee to be quite low
- You are okay with quite a difficult user interface
- You want to have more liquidity and exposure as well to the European markets
- You want a larger number of trading pairs
- You have some knowledge about the technicalities involved in crypto exchange and
- You want a safer place to trade your cryptocurrencies.
The good thing about the Coinbase exchange is that it allows making a much faster transaction in comparison to most of the crypto exchanges available out there irrespective of paying for it through credit or debit cards or bank transfer.
It is quite trustworthy and a regulated company that stores the funds of the customers safely. However, the trading fees of this platform are quite high and the in-exchange wallet is comparatively less secure. Also, the exchange monitors the way in which you spend your crypto coins.
Kraken, however, will offer you more liquidity in the Euro markets but it is quite slow with its verification process and also has some uptime issues especially when the market is hot.
Therefore, you should choose a crypto platform that you are most comfortable with while using and are at par with your crypto understanding and trading skills and style. But, if you are a first-time user, Coinbase should be your only choice. Period!
If you do not know the differences between the Kraken and Coinbase in terms of their respective features and functionalities, which one you choose for trading your crypto coins will matter very little. This article will not allow you to do that.