Kraken vs. Coinbase – Forbes Advisor

Our comparison of Kraken vs. Coinbase offers a deep dive into the pros, cons and features of these two leading U.S. cryptocurrency exchanges.

Both platforms offer a rich set of features. Kraken offers lower fees for pro traders, but has some geographic restrictions within the U.S. Coinbase’s platform is easiest to use for new investors, but trading fees are generally higher.

Kraken vs. Coinbase: Key Similarities

There are more than a few key similarities between Kraken and Coinbase.

Both exchanges charge higher fees than many of their competitors. Each platform supports a basic trading platform designed for novices, charging higher fees than their trading interface for experienced traders.

Kraken Pro offers advanced features and “staking on the go.” Similarly, Coinbase’s paid subscription version, Coinbase Pro, supports advanced trading tools. Coinbase Pro is being sunsetted in late 2022 to migrate all advanced trading into its Advanced Trade platform.

While trading is cheaper on the pro versions of Kraken and Coinbase, users seeking the lowest-fee crypto exchange might be better off checking out Binance.US.

When it comes to customer support, both Kraken and Coinbase shine. The two exchanges offer 24/7 live chat and phone support, an important option for cryptocurrency traders of all experience levels.

Email, search and a library of help topics are available on each platform. Coinbase and Kraken also comply with the KYC, or Know Your Customer requirements. (Procedures within the financial services industry that help to verify the customer and help to tackle money laundering.)

Kraken vs. Coinbase: Main Differences

Each crypto exchange has a range of additional features and services, some of which overlap. Reviewing this section should help you understand the main differences between Kraken vs. Coinbase.

Advanced Investing and Rewards

Wealthier U.S. investors have access to margin trading at Kraken. This enables you to borrow money to buy cryptocurrency, using your existing assets as collateral.

Margin lending opens the door to the possibility of magnified gains and losses if asset prices drop significantly. Futures trading is also available for eligible traders on Kraken. These features are best suited for experienced, risk-tolerant investors.

Staking is also available at Kraken for eligible coins, including Ethereum (ETH) or Cardano (ADA). Additional staking details like coins, rewards and fees are accessible on the website.

Coinbase users can earn rewards and interest on their crypto holding in several ways. The platform offers several cryptocurrencies for staking, such as Ethereum, Cardano, Tezos (XTZ), and Algorand (ALGO), to name a few.

Coinbase also gamifies its educational portal enabling users to earn rewards as they complete lessons on the platform’s educational portal. Lessons reward learners that are related to the lesson. For example, you can earn up $4 in GRT tokens by taking a course on The Graph.

Trading Fees

For instant purchases, Kraken’s basic trading platform charges users a flat fee of 0.9% for stablecoins and 1.5% for most cryptocurrencies. Depending on how you fund the purchase, additional fees may apply.

For Kraken Pro users who trade less than $50,000 in a 30-day period, the maker and taker fees are 0.16% and 0.26%, respectively.

On the basic platform, Coinbase charges a flat 1% transaction fee on all cryptocurrency transactions. Coinbase Pro users who trade less than $10,000 in a 30-day period pay taker and maker fees of 0.6% and 0.4%, respectively.

User Experience

Coinbase offers a seamless user experience, with a speedy sign up process and account linking through Plaid’s data transfer network.

The search bar enables easy access to all platform features. Buying and selling is straightforward, and automatic cryptocurrency purchases can also be set up.

Kraken has a more complex user experience. On the plus side, the starter verification level is quick and easy, although this client will pay higher trading fees for the barebones version. Verification for advanced levels can take up to several days.

Security

Crypto platforms are notorious for suffering from spectacular hacking incidents, making security a paramount concern when deciding which crypto exchange to choose.

Coinbase offers two-factor authentication for security. While Coinbase has beefed up its security protocols, it has been subject to several hacks. In 2021, hackers stole from at least 6,000 Coinbase customers. Unauthorized parties exposed a flaw in the company’s account recovery process.

While Kraken has never had a major hack, some users report losses due to hacks on online forums. At Kraken, servers are in secure cages under 24/7 surveillance by armed guards and video monitors. Two-factor authentication is standard, as is encrypted data transfer.

Storage and Wallets

Kraken doesn’t offer a crypto wallet, but it does offer cold storage, which is the ability to hold your coins offline. Kraken maintains full reserves so that you can withdraw your assets immediately.

Coinbase provides a self-custody cryptocurrency wallet for storing all your digital assets, or you’re welcome to choose a third-party wallet. Like Kraken, your Coinbase assets are held in off-site, cold storage.

Who Should Pick Kraken?

Kraken’s stellar security features, a wide range of coins, and advanced margin and futures trading features make it a good pick for advanced cryptocurrency traders. Sophisticated traders using Kraken Pro will benefit from the lower rates for greater 30-day trading volume.

Crypto traders with larger portfolios will appreciate Kraken’s staking opportunities as a way to make money from specific coins (staking is also available at Coinbase).

Disadvantages at Kraken begin with their vetting process, which can be confusing, along with the complex fee structures. Beginners will pay higher fees when they start with the basic crypto trading platform.

Additional fees add up, so cost-conscious traders might consider lower-cost alternatives. New users might prefer a simpler platform with a more complex user experience than Coinbase.

Regardless of your chosen platform, understand that this is a speculative asset with large price swings. Margin magnifies losses and you shouldn’t invest any money you cannot afford to lose.

Kraken Pros

• Top-notch security.
• Margin and futures trading available.
• A robust choice of cryptocurrencies.

Kraken Cons

• Complex user experience.
• No wallet available.
• Fees, especially for beginners, are relatively high.

Who Should Pick Coinbase?

Coinbase is a good place to begin trading crypto thanks to the platform’s excellent user experience. But Coinbase’s ease of access comes at a high price. Small-dollar transactions can rack up excessive fees, curbing your ability to profit.

Beginners can overcome the high fees by transferring to an upgraded level, such as the Coinbase Pro platform, which reduces prices to lower fees.

In contrast, competitors like Binance.US or KuCoin offer a less expensive fee model, with transactions for low volume traders at 0.1% maker/0.1% taker.

Beyond the high fee drawbacks, Coinbase has a lot to offer, from its “learn and earn” educational platform that rewards users with crypto to its ability to offer features like staking.

Like Kraken, staking is available as an additional path to earn more money from your crypto stash.

Coinbase Pros

• The exchange offers a crypto wallet
• Easy-to-use platform
• Coinbase Pro offers advanced charting and lower fees

Coinbase Cons

• Fees are relatively high and complex for the basic version of Coinbase
• For lower fees and added features, you’ll need to use Coinbase Pro