A Closer Look At This Crypto Exchange
There are a lot of crypto exchanges out there. How do you know which ones you can trust? While we can’t decide for you, we’ve done some research to make choosing an online market a little simpler. Today we’re sharing what we learned when we dove into Kraken.
Kraken was founded by Jesse Powell in 2011, making it just two years younger than Bitcoin itself. After helping a Japanese Bitcoin trading site recover from an attack by hackers, Powell was inspired to build the most secure, robust marketplace possible.
Because of these origins, Kraken takes safe security very seriously. Their servers are under lock and key (literally) and overseen by armed guards and safe security cameras. All new deposits and the majority of coins held by Kraken are kept in cold (offline) storage to prevent hackers from accessing your crypto. All online data and wallets are encrypted for further protection. They also provide and encourage two-factor authentication for all user accounts.
Today, Kraken is the largest Bitcoin platform in euro volume and liquidity. Headquartered in San Francisco, it allows customers from North America and the USA (with the exception of New York), Europe, and Japan to buy, sell, and trade altcoins. They are a partner in the effort to create the first cryptocurrency bank and were the first crypto site on the Bloomberg Terminal.
Is Kraken Used For Trading Other Altcoins Besides Bitcoin?
In this review you’ll learn how Kraken is used for buying, selling, and trading cryptocurrencies. Unlike a lot of platforms, Kraken allows users to trade on margin, or credit.
This platform supports Euros, US dollars, Canadian dollars, and Japanese Yen, as well as an impressive variety of altcoins:
Kraken offers users an assortment of order types, making it easy to customize your trading experience. Market and limit orders, stop loss orders, and take profit orders are all available, with the option to combine certain order types.
Like any crypto trading site, Kraken requires users to verify their identity. And in this review we’ll cover how to go about the verification process.
Kraken’s system is a little more complicated than most, though. Verification operates on five different tiers, with each one requiring more documentation from the user in order for them to do more on the site:
It takes just a few hours for tier 1 and 2 verification to be processed while tiers 3 and 4 may take a few days.
Is it Safe To Buy, Sell And Trade on Kraken?
Kraken is just one of dozens of crypto trading sites available. While it’s one of the biggest and oldest altcoin marketplaces, is it right for you and your investment needs? We’re going to discuss some pros and cons but it’s important for you to do research yourself. Only you can decide what’s a good fit for your needs.
What You Need To Know About Fees and Other Stipulations:
What does it cost to use Kraken?
Signing up is free, and there are no membership fees to use the marketplace. Like most platforms, you’ll only pay when you start depositing, withdrawing, and trading. As we mentioned above, your cost will vary depending on the volume of your trading and the currencies (crypto or fiat) you deal in. Kraken’s fees are lower than most, but SWIFT (international bank) users will pay higher fees.
Funding Your Kraken Account
This all depends on your verification level. If you are a tier 1 user, you will only be able to fund your account with digital currencies. Fiat currencies (USD, Euro, Yen, and CAD) will not show up in your deposit options until you provide verification to achieve at least a tier 2. Once you’ve reached tier 2 (and up), you’ll be able to fund your Kraken account easily in the “Funding” section of the menu.
Tiers on Kraken
It’s important to understand the tier system on Kraken so you can better decide if the site meets your needs. Like we said, each tier requires additional identity verification because as you go up the ladder, there are higher limits to the amount you can withdraw and deposit. As we previously stated, tier 0 does not allow users to deposit or withdraw at all. Tier 1 allows you to deal in coins only, with a withdraw limit of $2,500 per day and $20,000 per month. There is no deposit limit with a tier 1 membership.
Once you reach tier 2, you’ll be able to deposit and withdraw up to $2,000 of any fiat or currency a day, with a limit of $10,000 per month. You’re limited to $5,000 of crypto a day and $50,000 per month. If you’re not trading professionally, this tier is probably ideal for you.
If you are a professional or serious trader, or will be trading USD domestically, you’ll need to go straight to tier 3. You can’t withdraw and deposit USD domestically until you are at this tier. Once you’ve reached this level, your fiat currency deposit and withdraw limits are $25,000 daily and $200,000 per month. Your crypto limits jump to $50,000 per day and $200,000 a month.
Tier 4 is reserved for corporations or individuals that trade very high volumes. If you’re operating at tier 4, you’re able to deposit $100,000 daily in fiat currency and $500,000 monthly. Withdrawal limits for all currencies (fiat and crypto) are $100,000 daily and $500,000 per month.
How to Use the Exchange:
Think Kracken is for you? Getting started on the site is simple. The homepage is very user-friendly with “Create an Account” front and center. Put in your email address, a username, and a password and your account is created! Clicking “advanced options” on the “Create an Account” screen will allow you to to create a master key, which is a safe security measure required for two-factor authentication bypass requests and password resets. At this point, you have a tier 0 account.
To move up to a tier 1-4 account and begin trading, you’ll need to provide additional information about your identity. To submit verification info, you’ll select the “Get Verified” option in your account menu. It typically takes just a few minutes for tiers 1 and 2 accounts to be verified but may take up to a few days if manual verification is needed. Tiers 3 and 4 take considerably longer, with a few days being the minimum.
When you’ve reached at least tier 1, you’ll be able to deposit funds into your Kraken account. To do this, go to your account and select “Funding” and then “Deposit.” Choose your currency, and you’ll be provided with instructions for wiring money into your account. If you’re depositing a fiat currency, you may need to contact a representative from your bank to assist you with this. Kraken asks that you allow at least 5 business days for all bank transfers to clear.
To buy, sell, or trade a currency pair, or just see how that pair is doing, click the currency pair button in the upper lefthand corner of any page. When you know which pair you’d like to trade or purchase, you’ll navigate to the “New Order” tab. Select your pair, then enter the amount and amount currency of your order, and choose your order type. Submit your order and you’re trading coins!
Conveniently, you can store any altcoins you purchase or trade in your wallet on Kraken. If you already have a wallet, you can easily withdraw your coins to that wallet by going to the “Withdraw” option in the ‘Funding” menu and entering the address of the wallet.
The process to withdraw fiat currencies is similar. Start by going to the “Withdraw” option in the “Funding” menu, selecting your currency and a withdraw method (SEPA, Wire, SWIFT, etc) and add the account you want to withdraw your funds to. Once you’ve saved your bank account to Kraken, you’ll be able to withdraw funds to it.
While Kraken is relatively simple to use, it’s not recommended for those unfamiliar with the cryptocurrency world. The interface is relatively easy to use, but it’s not as beginner-friendly as other marketplaces like Bitstamp, Bitmex, and Coinbase.
The big takeaway from our research and this review is that if you’re a seasoned trader, Kraken may be for you. If you’re a beginner, there are other marketplaces, like those listed above, that are probably a better fit for your experience level and trading needs.