Kraken Exchange Review – A Guide To The Popular Exchange

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Cryptocurrency has proven beyond any doubt that it is here to stay and change the cliché knowledge of finance. As more people develop an interest in it, its growth and popularity continues to be massive. 

Once you understand or develop an interest in cryptocurrency, you might be interested in investing in cryptos. At this point, you might need information on how to use a cryptocurrency exchange.  

Discussed below is one of the exchanges with a remarkable reputation, Kraken Exchange. 

What Is Kraken Exchange?

Kraken Exchange was launched in 2011, two years after Bitcoin was created. And although Kraken is one of the oldest cryptocurrency exchanges in the world, it also offers one of the best and most secure exchange services.

The Kraken crypto exchange easily enables the transfer of funds from the user’s bank to the exchange. The user can also transfer cryptos from the exchange to other exchanges. To get started, the user will need to connect their bank account and digital wallets to Kraken’s trading account.

It has more than 60 coins which are available for various purposes like trading or staking purposes. Staking involves loaning out coins to receive rewards.

In addition, it allows users to trade using fiat currencies and cryptocurrencies.  Some of the fiat currencies that you can trade on this platform include U.S. Dollars (USD), Japanese Yen (JPY), Canadian Dollars (CAD), British Pounds (GBP), Euros (EUR), Australian Dollars (AUD), and Swiss Franc (CHF). 

According to the trading volume of each fiat currency on Kraken, it has an enormous Euro trading volume compared to other exchanges.

Furthermore, there are over 38 cryptocurrencies that are available in trading pairs, such as BTC/ETH, BTC/MATIC, etc.

History of Kraken

Although Kraken was founded in 2011, it began its trading operations much later in 2013. Kraken’s worldwide headquarters are located in San Francisco, California. This cryptocurrency exchange is governed by Payward Inc., led by Jesse Powell, the CEO and co-founder. 

According to a record presented by David Kinitsky, the Kraken Bank CEO, the exchange platform amassed nearly 7 million clients in the first quarter of 2021.

In addition to that record, the company has attracted several investors like Digital Currency Group, Blockchain Capital, and Trammell Ventures. 

This exchange has been the most preferred trading spot for many cryptocurrency traders. When the cryptocurrency world started making waves in 2014, the Bloomberg platform selected Kraken, alongside Coinbase, to supply Bitcoin’s market data. This act skyrocketed the popularity of Kraken as lots of cryptocurrency users got to know about the exchange platform. 

Kraken is a centralized exchange platform that is overseen by the Financial Crimes Enforcement Network (FinCen). It is the arm of the U.S. Treasury responsible for data analysis on financial transactions.

Kraken Features

Kraken is a distinct exchange with a lot of unique features. Apart from its reputation as one of the oldest exchange platforms, it has amazing features which attract crypto traders to the exchange. Some of them include: 

Security

Cryptocurrencies have had a reputation of being vulnerable to hacks, resulting in a large amount of loss in terms of money and coins. Many crypto traders have also been concerned about security.

Kraken is known to provide top-notch security. According to a review on the crypto cyber security rating site, Crypto Exchange Ranks  (CER), it ranked first in terms of security. In the 10-year history of its existence, it had not experienced any hack.

It provides 24/7 security where 95% of its coin deposits are kept secured offline in cold storage units spread across the world. Moreover, the locations are under heavy surveillance by armed guards and video monitors. 

Furthermore, its computer system has an in-built security test that regularly tests the vulnerability of its design. 

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Ease of Use

Once you register and get verified, you can fund your account with fiat currency, such as USD or EURO. From there on, you can start purchasing cryptocurrencies. 

One thing about Kraken is that it makes use of third-party companies to handle these fiat fund transfers. 

How To Start Trading On Kraken

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STEP1: Registration

First, create an email address. Then, visit the Kraken website, go on the homepage and click on “Sign Up.”

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Type your username and password and click “Create account”. Then go back to your email and activate your account. 

After, come back and sign in to the Kraken exchange. 

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STEP 2: Verification

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There are five levels of verification, i.e., 0-4 on the Kraken Exchange. Verification is one of the ways to know the customers. During this process, you’ll need to upload proof of identity, like an ID card. 

The verification process for the first three tiers is relatively easy and less demanding. For Tier 0, you can only observe what is happening on the exchange.  To engage in any form of trade, you need to get a Tier 1 verification. 

The process below involves steps to get the Tier 1 and 2 verification. 

STEP 1:  Click on “Get Verified.”

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Tier 1 only requires the following information: 

Your name, date of birth, country, and telephone number.

But tier 2 will need additional information like proof of address.

Also, as a verified Tier 1 user, you are restricted to just cryptocurrencies. In addition, there is a daily $2,500 withdrawal limit.

However, with Tier 2, you can deposit and withdraw both fiat and cryptocurrencies. However, the fiat currencies have a $2,000 daily withdrawal limit, and in comparison, Cryptocurrency withdrawals have a $5,000 withdrawal limitation.

Tier 1 and 2 verification will take just a few minutes, and in comparison, Tier 3 and 4 verification may take several days. The best part of Tier 3 and 4 is that it allows crypto traders to deposit and withdraw more cryptos and fiat money.

2 – Factor Authentication

After the verification process, you need to add more layers of security to your account by setting up two-factor authentication. The process is as follows:

 Go to “Security” 

Click on “Two-factor authentication” 

Click on “Setup.” 

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You can either use Google Authenticator or Yubikey for your second password. 

Now you can begin to trade. 

The Trading Process 

The trading process involves the following steps:

Go to “Funding” and make a deposit. You can either choose to fund your wallet with cryptocurrencies or fiat currencies, and funding with fiat currencies may sometimes attract charges.

Click on the “Trade” tab and then “New Order.”

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There are three options for trading. They are:

  • Simple.
  • Immediate.
  • Advanced. 

 Set up your order type. You can choose a limit or market order, depending on what works for you. The market order is a much swifter process, but the only disadvantage is buying the coin in whatever market price it is listed.

Click on the green “Buy.”

It’s as easy as that.

What you need to know about storage on an exchange like Kraken:

For the sake of security, use exchanges for trading purposes only. Do not store your cryptocurrencies on hot storage if you intend to hold them for a long time.

Kraken Fees and Charges

Kraken uses a maker and taker fee model for its transactions purposes, and it means, as a liquidity supplier, you get a lower fee rate.

When an investor puts in a trade order that is not immediately matched with an order already on the books, the investor is charged a maker fee. It is because it is creating demand for more cryptocurrency, thereby contributing to the liquidity. 

Also, when the investor’s order is matched with an order already on the books, such transactions are charged a taker fee. This type of order is taking existing coins off the market, which causes a reduction in liquidity

Usually, a trader is not charged until the transaction is completed. In addition, it varies from 0% to 0.26%, and it is also dependent on the type of the market order. 

The withdrawal fee is dependent on your location and country. 

For Withdrawal Of Fiat Currencies: 

If you want to withdraw fiat currencies like USD into an American bank account, the withdrawal fee is $5. But in a situation where you don’t have an American bank account, the transaction fee is $60. 

For Withdrawal Of Cryptocurrencies:

The withdrawal fee is much lower and quite flexible. For example, the withdrawal fee on both Bitcoin and Ethereum is 0.0005 BTC and 0.005 ETH, respectively. 

What Makes Kraken Unique?

Kraken’s security system is top-notch. Moreover, it has a sophisticated order system and trading tools. Some of its distinctive trading tools include:

  • Options for stop loss and profit-taking types of orders.
  • Leverage and margin-based trading.
  • Automated strategy trading.
  • A vast collection of cryptocurrencies for trading purposes.

Kraken Pros and Cons 

Pros:

The pros of using Kraken exchange are as follows:

Fiat currency trading– It supports trading with six different fiat currencies on Kraken. 

Security- Kraken has a reputation of never being hacked. It has secured offline storage for its cryptocurrency, and it also supports two-factor authentication.

Fees- Its transaction fee is one of the least expensive on the crypto market, and Kraken trading fees are between 0% and 0.26%. 

Support- It has remarkable ‘help’ and ‘support’ platforms with a high content value for its newbies.

Mobile Application- It has a mobile version application to help make trading flexible. The app has a clear and easy-to-use interface. 

https://twitter.com/krakenfx/status/1412752153949659138?s=19

Download the app here.

Cons:

Below are the cons surrounding the use of Kraken exchange: 

Customer service- Many users have complained about their poor customer support, a common problem with cryptocurrency exchanges. The company has promised and started working towards the improvement of the customer support system.
With the information from the above article, hopefully you can now agree that Kraken is one of the best exchanges. It is reliable, secure, and swift.

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