Kraken vs. Coinbase

Coinbase is better for beginner and institutional traders looking to trade major cryptos while Kraken offers a wider range of altcoins and higher leverage. 

When it comes to trading cryptocurrency, U.S. investors often find themselves with limited options due to the reluctance of many brokerages to face potential lawsuits from American regulators. As a result, many American investors turn to the most reputable cryptocurrency exchanges available, with Kraken and Coinbase being among the top choices.

Kraken and Coinbase are both U.S.-based cryptocurrency exchanges that have gained a strong reputation in the industry. Each platform offers a range of features and offerings tailored to meet the needs and preferences of different types of investors. Let's take a closer look at what sets these two exchanges apart:

Kraken vs. Coinbase: At a Glance

Kraken's broader cryptocurrency support, better access to margin features and low fees appeal to experienced traders. On the other hand, Coinbase's easy-to-use interface and its insurance coverage on assets make it a good choice for beginner investors. 

Kraken vs. Coinbase: An Overview

Kraken and Coinbase are two of the earliest cryptocurrency exchange platforms established for buying, selling and trading digital assets.  

What Is Kraken?

Kraken is a cryptocurrency exchange platform that allows people to invest and trade cryptocurrencies and other digital assets. Founded in 2011 by Jesse Powell, Kraken has established itself as one of the oldest and most respected exchanges in the cryptocurrency industry.

Kraken provides a reliable and secure platform for individuals and institutions to trade cryptocurrencies, offering a diverse range of assets and advanced trading features.

What Is Coinbase?

Founded in 2012, Coinbase is a leading cryptocurrency exchange platform that allows users to buy, sell and trade a variety of digital assets. It also provides wallet services for storing cryptocurrencies and offers additional features such as educational resources, merchant services and institutional trading through Coinbase Pro.

Coinbase‘s commitment to regulatory compliance has played a significant role in it becoming a trusted platform for millions of users. Listed publicly on the Nasdaq Stock Market, the cryptocurrency exchange also provides an additional level of transparency to its operations compared to nonpublic exchanges. It has generally been more cautious in listing newer cryptocurrencies and positions itself as a leader in compliance within crypto. Investors may feel relatively safer keeping crypto on the exchange because Coinbase insures a portion of assets. 

Kraken vs. Coinbase: Key Features

Both platforms cater to a wide range of investors, from beginners to industry professionals. However, each cryptocurrency exchange offers unique features that may appeal to different types of traders. Let's take a closer look at the key features of Kraken vs. Coinbase.

Availability

Both Kraken and Coinbase offer trading services in multiple countries, with Coinbase available in over 100 countries and Kraken in over 190. However, there are restrictions based on location. For example, Coinbase is not available to residents of Hawaii, while Kraken is unavailable in New York and Washington. It's essential to check the availability of each platform in your specific location before signing up.

Margin Trading

Kraken is known for its margin trading feature, which allows users to trade with up to five times leverage. On the other hand, Coinbase introduced margin trading in early 2020 with three times leverage but later disabled the feature in November 2020. If margin trading is essential to your trading strategy, Kraken may be the better option for you.

Staking

Kraken and Coinbase both allow users to stake their crypto assets for rewards. Kraken offers flexible and bonded staking options, with different waiting periods for unbonding. Coinbase allows users to stake idle cryptos on their platform primary balance, with the unstaking process varying in duration. During the waiting period, users can earn rewards on their staked assets.

Advanced Trading Platform

Both Kraken and Coinbase provide sophisticated trading platforms that extend well beyond the functionalities of standard exchanges. Kraken Pro and Coinbase Advanced Trade are advanced trading platforms that offer users in-depth charting tools, a variety of order types, and extensive research options to optimize trading strategies. Both platforms are ideal for traders looking to delve deeper into technical analysis and make more informed decisions based on market trends. They provide flexibility in executing trades and managing portfolios effectively.

Funding Options

Kraken offers funding options using different fiat currencies and payment methods, including digital assets. Meanwhile, Coinbase supports cross-border wire transfers for Pro and Prime customers from non-U.S. bank accounts and provides exposure to various cryptocurrencies when paired with USDC.

Over-the-counter (OTC) Service

Kraken and Coinbase offer OTC trading services for those trading with large volumes. This allows users to execute transactions without experiencing price slippage, where the filled order price differs from the requested price.

Unique Features

Cryptowatch is a free trading terminal provided by Kraken, offering data and analysis tools for over 2,000 cryptocurrency markets. Users can set price alerts to stay informed of market movements and make timely decisions. Upgrading the service allows for more timely notifications, giving traders an edge in reacting to price changes and seizing opportunities.

Coinbase offers a hot wallet feature that allows users to deposit, store, and withdraw currency without needing to be a Coinbase user. This crypto wallet feature is convenient for traders who frequently transfer between fiat currencies and cryptocurrencies.

Kraken vs. Coinbase: Supported Cryptocurrencies

Coinbase supports 248 cryptocurrencies for trade, while Kraken supports 276. However, their strategies are different. Kraken caters to both mainstream and niche markets, providing access to a wider variety of altcoins, meme coins and newer tokens. Coinbase, on the other hand, focuses more on major cryptocurrencies with strong mainstream appeal.

Kraken and Coinbase support a variety of popular cryptocurrencies. These include Bitcoin (BTC), Cardano (ADA), Bitcoin Cash (BCH), Chainlink (LINK), Ripple (XRP), Ethereum (ETH) and Litecoin (LTC).

Kraken vs. Coinbase: Fees

Kraken operates on a maker-taker fee model, where makers (users who provide liquidity to the order book) are charged lower fees compared to takers (users who take liquidity from the order book). Fees start as low as 0% for makers and 0.16% for takers for certain trading pairs, with fee tiers based on trading volume.

Coinbase operates on a spread-based fee model, where users are charged a percentage-based spread on the buy and sell prices of cryptocurrencies. The spread may vary depending on market conditions and liquidity but maxes out at 0.5%.

Kraken's maker-taker fee model may be more cost effective for users who provide liquidity to the order book. Coinbase's spread-based fee model may result in higher fees for users, particularly for smaller transactions or during periods of high volatility.

Kraken vs. Coinbase: Security

Kraken and Coinbase both prioritize security. They both provide two-factor authentication (2FA), cold storage and data encryption as security features. Plus, both exchanges operate in compliance with regulatory standards in the jurisdictions where they operate. 

However, the difference between both platforms is in the insurance of assets. Coinbase provides insurance coverage for a portion of digital currency held in its online wallets, offering some protection against losses resulting from cybersecurity breaches or theft. Kraken does not.  

Kraken vs. Coinbase: User Interface

Kraken's interface is more complex and offers a wider range of features and customization options, making it suitable for both novice and experienced traders who require advanced trading tools and functionality.

Coinbase's interface is more user-friendly and streamlined, catering to beginners and offering a simple and intuitive trading experience. The platform's simplicity may appeal to users who prioritize ease of use and accessibility.

Kraken vs. Coinbase: Customer Support

Kraken primarily relies on a ticket-based system for customer inquiries, while Coinbase provides additional support options such as phone support and a dedicated support center with FAQs and self-help resources.

Response times and the quality of customer support may vary for both platforms depending on factors such as the volume of inquiries, the complexity of the issue and the availability of support staff.

Coinbase vs. Kraken: Which Is Better For You?

As one of the oldest crypto exchanges, Kraken appeals to seasoned traders seeking a reputable place to trade altcoins and major crypto. Coinbase shines with its regulatory compliance and insurance coverage — at least partially — for assets, making it a popular brokerage for newcomers to the crypto sphere. 

If you're a seasoned trader, you may find Kraken more appealing. It can potentially offer higher leverage and lower fees. However, if you're just getting started in crypto, Coinbase offers access to major cryptocurrencies and credibility with at least some of your balances insured.