Kraken: another big among crypto exchanges

History and features

Kraken began trading in 2011 and is based in San Francisco, USA. The founders are Jesse Powell, Thanh Luu, and Michael Gronager. Fun fact: Powell worked as a consultant at Mt. Gox; he began developing Kraken seeing it as a replacement for the defunct exchange, anticipating its downfall.

CEO until September 2022, Powell left the post to Dave Ripley, still in charge.

Kraken’s role over the years has been highly relevant. Not coincidentally, it is the first exchange to be listed on Bloomberg Terminal. The company’s mid-2022 valuation was $10.8 billion.

Over time, Kraken has had some problems with regulators, something, moreover, shared by other such companies (see, for example, Binance).

From a simple cryptocurrency exchange, it has evolved by adding more and more services. In 2023, Bloomberg made known Kraken’s intention to expand its reach beyond crypto, integrating U.S. equities and ETFs.

Today the company has a presence in 190 states and offers more than 90 coins and tokens. Employees number more than 2,300. Unmistakable is the logo that features the very kraken, a legendary sea monster that appears in stories, movies and video games.

At the time of writing, the exchange offers the classic crypto buying and selling service as well as earn features, NFT exchange, margin trading with up to 5x leverage, and Kraken Pro, an advanced trading platform.

Before discovering the platform’s proposition in depth, let’s understand some essential basics.

How to open an account on Kraken?

Opening an account is super easy, here are the steps.

Start on this page and click on the Register button. To get started you will only need to provide your email address, username and a password.

After this first step, however, you will need to verify your identity according to the usual KYC procedure. To do this we will need to upload a document of our own choosing from ID card, driver’s license or passport. That’s all: upon successful verification you will be able to operate on the platform.

There are then higher levels of verification that unlock higher daily and monthly movement limits. In any case, basic verification gives access to fairly large thresholds, in line with the needs of most small and medium-sized investors.

Finally, remember that you can safely close your Kraken account if you wish: just contact customer service, as explained in this official FAQ.

How to deposit money on Kraken?

At this point the account is active and you can move to the second step, which is depositing funds.

To deposit money on Kraken, say euros, we need to follow these steps:

• We enter our account and click on the Deposit (Deposit) button;
• We select the currency we wish to deposit (let’s say euros);
• We indicate the amount and choose the payment method from the drop-down menu; watch out for the fees, which are still shown in detail when we decide on a method;
• Proceed and complete the transaction.

An important note: After the first deposit, as well as any subsequent deposits within 72 hours, the ability to withdraw may be temporarily blocked. After the 72 hours have elapsed, the blockage lapses and will never be applied again. This measure is necessary for platform compliance reasons. In the meantime, the amount can still be used to buy and sell cryptocurrency.

How to withdraw money from Kraken?

Withdrawal is done in just a few clicks. We start by logging into our account and clicking on the Withdraw button after which:

• We select the currency or cryptocurrency we want to withdraw;
• From the Withdrawal type drop-down menu, choose the method by which we wish to proceed. We press Continue (Continue);
• We enter the bank account details and click on Add bank account;
• We enter the amount and request the withdrawal. We confirm with Withdraw after verifying that all data is correct.

Here is the guide with how to operate via mobile app.

At the time of writing the withdrawal fees are as shown in the table below. We also find very low minimum limits indeed.

We will also be able to withdraw (as well as deposit) funds via blockchain.

The procedure is identical to what we find in competing exchanges: we will deposit on the Kraken wallet address given by the platform, we will withdraw by providing our own address (to learn more about wallets read the article on crypto wallets). Let’s be careful to fill in all fields correctly and do not get any data wrong, otherwise we risk losing the funds involved in the transaction.

Also, remember that the use of the blockchain involves a variable expense in gas fees, in addition to any fees charged by the platform.

How is Kraken used? Discovering the exchange

The platform is designed to be affordable for everyone. If we then wanted to access advanced features, we would just need to use Kraken Pro.

Buying, selling and converting cryptocurrencies

The exchange comes in two guises: the classic web portal and the mobile application. In both cases, buying and selling cryptocurrencies is quick and easy.

From the website, after logging into the personal account, we enter the Buy crypto area (Buy crypto). Having done so, the following steps will be sufficient to complete the task:

• Select buy, sell or convert;
• Indicate the cryptocurrency to buy or sell, or the one we intend to convert; in the latter case, we also select the one we wish to receive in exchange;
• We indicate the quantity;
• We add a payment method if necessary;
• We confirm.

It is possible to trade either at market price or by setting a limit.

NFTs

Kraken also offers its users an NFT marketplace covering several blockchains (Ethereum, Solana, and Polygon).

The offering is rich, although clearly not reaching the levels of more established platforms such OpenSea.

Somewhat like on the portals just mentioned, we can freely explore the catalog. If we wish, we then have the option to enter filters, so as to narrow the search for a non-fungible token to a specific chain or within a specific price range.

At the time of writing, the available collections do not touch the prestige (and thus the base price) of the most popular ones. However, very interesting creations can be found and are worth poking around for.

By connecting our own wallet we can also sell the NFTs we own. We will have to sign up for the exchange, however, because the marketplace is internal.

Earn rewards

For those looking for passive income, Kraken has what you need. In fact, the Earn service covers many coins including bitcoin, Cardano and Polkadot.

Interest is paid twice a week (with exceptions, always stated) and varies depending on the type of staking that is chosen:

• Flexible: lower interest but freedom to move funds to any;
• Bonded: funds locked for a certain time frame (3 to 28 days, depends) and higher earnings.

The procedure is very quick: just log in with your account and from the menu located at the top select Explore -> Earn rewards from Staking. After that we will have to search for the crypto of our interest and click on Staking (Allocate), as in the example below.

The product is good in itself, but beware: the funds will be on the exchange and those locked in cannot be retrieved before expiration. Remember that centralized realities have risks and capital could be in jeopardy in certain situations and market conditions.

Other things to know

Let’s look at other interesting features and functions of Kraken.

Let’s start with margin trading, which is also available with up to 5x leverage. Over 100 currencies and fixed rates to trade on margin in the spot market: those familiar with the subject will be very happy.

Never underestimate the complexity of the instrument, however. So let’s avoid jumping into this trade without having the right familiarity.

Institutional clients can also rely on the OTC (Over The Counter) platform, which allows orders to be executed outside the traditional Kraken exchange. You can also count on favorable terms and conditions that open the door to big money.

Service is available at all times, as is the team of experts to support you (24/7).

Just on the subject of support, Kraken has a support center full of ready-made articles and FAQs, as well as direct interaction with a person in case of need.

Response times vary depending on the workload of the team.

Is Kraken safe?

Turn to our favorite topic: is the capital deposited on Kraken safe? The short answer is “yes,” but let’s motivate it point by point.

First of all, we have to take into account the security of the account. Here the exchange is quite careful and takes all possible solutions to limit risks. Clearly, we will also have to put our own spin on it by choosing a secure and unique password, saving credentials on non-computer media and enabling two-factor authentication. Then watch out for phishing, which is very much in vogue these days.

The platform’s cybersecurity meets rigorous standards and has achieved ISO/IEC 27001:2013 and SOC 2, Type 1 certifications. One may not be completely safe from external attacks, but Kraken makes life difficult for malicious attackers.

Let’s talk about the reserves periodically verified by an external entity, so as to offer up-to-date Proof of Reserves. Customers can access their accounts and verify for themselves that Kraken is actually holding the funds.

In any case, we urge that neither fiat currencies nor crypto be left deposited on the exchange, as the wallet is custodial. Outside of the funds needed for operations, it is recommended to move the rest to noncustodial wallets such as MetaMask or Exodus, or even better to a hardware wallet.

Finally, last point, security of personal data. Privacy is indeed an asset to be protected at all costs: does Kraken protect it? The exchange claims to adopt all solutions to ensure maximum security, stating that even if data is stolen, there is limited information available.

How much does Kraken cost?

All very interesting and well done, but how much does it cost to use the platform? The time has come to find out.

Let’s start with what is free:

• Move funds to/from futures wallet;
• Leaving deposited funds;
• Inactivity;
• Maintenance.

Let’s move on to trading fees. They are quite intricate because they depend on the asset involved, any leverage, discounts, and so on. Overall they are competitive, but we will defer to the dedicated page to identify what pertains to each specific user. In any case, we will take a look at them in the final section, dedicated to Kraken Pro.

Even for Instant buy/sell orders, i.e., immediate conversions, fees vary depending on the payment method, spread, asset, and so on. When setting up an order, before confirming we will have a way to see how much the fees are, being able to then decide whether to proceed or switch to another service.

Conversion of small amounts, below the minimum order size, carries a 3 percent fee.

As for Non-Fungible Tokens, Kraken charges a 2% transaction fee; there are no listing, cancellation, and deposit fees. The fees that accrue to creators depend on the collection.
Withdrawal changes from blockchain to blockchain like this:

• Ethereum: 0.01 ETH;
• Solana: 0.02 SOL;
• Polygon: 0.5 MATIC.

Deposits and deposits have already been discussed in the dedicated section. For completeness, here is the link to Kraken commissions, so you can check them in real time.

"Commissions a bit complex and varying according to different parameters"

Kraken trading: a look at the Pro interface

Let’s close by taking a quick look at theexchange’s trading interface.

Kraken Pro is the ever-present platform that puts users in a position to trade professionally from their computers. The interface looks like that of other exchanges that offer an advanced version, but let’s take a look at it anyway.

Point 1 points to a bar containing some important information. In addition to the exchange pair we are looking at (BTC/USD) we will see the last price, the change in the last 24 hours, and the trading volumes.

The area marked with the number 2 is the operational area, from which the user sets the buy or sell order. As we said earlier, in addition to spot operation, margin operation is also available. Nothing different at other platforms.

Number 3 marks theorder book, an indispensable tool for setting up trades correctly. This field is also customizable: just click on the gear to access the settings of the specific tab.

On item 4 there is not much to say: it contains the chart at TradingView, which is also editable. We will also be able to directly perform technical analysis, write notes, draw structures and much more.

Finally, in area 5 we will see the history of our orders, those opened, closed, set and so on. We will also be able to cancel them in case they have not already gone to conclusion.

Interesting then is the Analytics item, clickable in the menu located in the top bar of the screen. Here we will be able to view some interesting indicators to better understand the market.

Finally, let’s close with a look at Kraken Pro’s commissions. They vary mainly according to the volumes moved, as well as the behavior of the user himself: the Maker, who contributes to enrich the order book, will pay lower amounts. The Taker, who precisely takes what he finds without entering the OB, will pay a higher amount.

Spot commissions as of December 2023

Stablecoin, pegged token and FX pairs fees to December 2023

Futures commissions as of December 2023

Always rely on the commissions page of Kraken’s website for updated figures.

Conclusions

Our journey into the “belly of Kraken” ends here.

The exchange is certainly good, with many interesting features and a user experience that aims for simplicity. However, somewhat like Coinbase, ease of use comes at a price.

Security side nothing to report, except to be cautious as one should do with any crypto platform.

Good coin and token offerings, although other exchanges beat it. However, unless you are looking for something exotic or newborn, we can say that there is everything that 9 times out of 10 you are looking for.

Thanks and see you next time!