Kraken vs. Coinbase

At a Glance

Kraken vs. Coinbase: Features

Each cryptocurrency exchange caters to industry investors and first-timers alike. Still, Kraken offers features ideal for worldwide investors or U.S. traders who don’t mind giving up convenience for lower fees and additional services. Coinbase’s digital options facilitate processes for U.S. investors. With both Kraken and Coinbase, you’ll get:   

• Availability: Coinbase offers trading in over 100 countries and Kraken in 176. Both provide varying functions depending on location. For instance, Coinbase isn’t available to Hawaii residents, and Kraken isn’t available in New York or Washington. 
• Customer service: Global service is available around the clock for both platforms via live chat. Support availability can decrease, and wait times increase, during high-traffic trading times. Both offer help center guides and question-and-answer centers.
• Margin trading: Kraken offers margin trading with up to five times leverage, which is average in the industry. Coinbase added the feature in early 2020, offering limited availability at three times leverage, but promptly disabled it by November 2020.
• Mobile apps: Each exchange has a highly rated mobile application, offering all the features available on a web browser. However, Kraken’s app isn’t available in five countries and one territory.

Kraken offers Cryptowatch, a trading terminal that analyzes and generates data on over 2,000 cryptocurrency markets. The free service allows traders to monitor price movements and market trends across various platforms and set price alerts. Investors can upgrade this service by paying one credit per alert for more timely notice. 

Coinbase has an added feature, as well. They provide users with a hot wallet they can use to deposit, store, and withdraw currency. You don’t need to be a Coinbase user to use the wallet, making it ideal for traders that transfer between various fiat currencies and cryptocurrencies. Kraken offers clients a digital wallet to store coins between purchases but does not provide a personal wallet service.

Kraken vs. Coinbase: Currencies

Both exchanges support USD, EUR, CAD, AUD, GBP, CHF, and JPY fiat currencies. Coinbase has over 120 cryptocurrencies available for trade, while Kraken has 97. Each provider offers different choices, so users looking for something specific can search both to find what they want. 

For instance, Kraken offers Flow (FLOW) and Icon (ICX). You can trade Filecoin (FIL) and Yearn Finance (YFI) on Coinbase but not Tron (TRX) or Siacoin (SC). 

In addition to Bitcoin, the most popular cryptocurrencies supported by Kraken and Coinbase include:

• Cardano (ADA)
• Bitcoin Cash (BCH) 
• Chainlink (LINK)
• Ethereum (ETH)
• Litecoin (LTC)

Kraken vs. Coinbase: Security

Security measures are crucial when considering which exchange to use. Both platforms have solid security track records, and neither has had any significant breaches. Kraken stores 95% of its assets in guarded air-gapped cold storage and has strict surveillance across the entire platform and multiple checkpoints throughout the signup process. 

Coinbase keeps 98% of deposits in offline, geographically distributed cold storage. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 of an individual’s USD cash balances, a plus for U.S. traders.

On the user side, Kraken and Coinbase offer these multi-layered security features:

• Security keys: When inserted into your computer drive, physical security keys authenticate your login and generate a one-time passcode. You can create several keys and store them in secure locations. 
• Pretty good privacy (PGP): Each platform guides you through setting up PGP encryption for online communications with the exchange. This precaution will help ensure all cryptocurrency correspondences are kept private and secure. 
• Two-factor authentication (2FA): Kraken and Coinbase offer 2FA when making withdrawals and transfers. The Coinbase system defaults to 2FA for SMS verification during login.
• Authenticator apps: Another option for 2FA is authenticator apps. Both companies allow you to use these instead of a text message or email form of 2FA. Popular apps such as Google Authenticator are supported.

Kraken vs. Coinbase: Fees

One significant divide between Kraken and Coinbase comes in the form of transaction fee structures. Kraken's maker-taker fees are amongst the lowest in the industry. Coinbase's maker-taker fees are nearly double, maxing out at 0.50% vs. Kraken's 0.26%.

Kraken calculates transaction fees according to the volume you trade in a 30-day rolling period. The fee schedule includes:

• Transactions $0 to $50,000 pay a 0.16% maker fee or a 0.26% taker fee
• Transactions $50,001 to $100,00 pay a 0.14% maker fee or a 0.24% taker fee
• Transactions $100,001 to $250,000 pay a 0.12% maker fee or a 0.22% taker fee
• Transactions $250,001 to $500,000 pay a 0.10% maker fee or a 0.20% taker fee
• Transactions $500,001 to $1,000,000 pay a 0.08% maker fee or a 0.18% taker fee
• Transactions $1,000,001 to $2,500,000 pay a 0.06% maker fee or a 0.16% taker fee
• Transactions $2,500,001 to $5,000,000 pay a 0.04% maker fee or a 0.14% taker fee
• Transactions over $5,000,001 to $10,000,000 pay a 0.02% maker fee and a 0.12% taker fee
• Transactions over $10,000,000 pay a 0% maker fee and a 0.10% taker fee

Coinbase's maker-taker schedule is considerably more expensive topping out at 0.50%. For example, a $1000 trade would cost $5 dollars with Coinbase. The same trade would cost $2.60 with Kraken, charged at 0.26%.

Kraken vs. Coinbase: Ease of Use

The user experience for Kraken and Coinbase ranks high. They both provide a reliable experience on desktops and mobile devices. Kraken’s stringent security measures are a bonus for large-sum investors, but the added precautions can be trying for users who want to start trading quickly. 

Coinbase offers a quick startup process and keeps trading features and funding options simple, allowing inexperienced investors to trade right away. Coinbase enables new users to start trading with only a phone number verification. With added verification steps users can unlock higher account levels and limits.

Final Verdict

While both Coinbase and Kraken are highly trusted cryptocurrency exchange platforms, Coinbase's benefits are more specific to U.S. traders, while Kraken is the best for international traders overall. It has some of the lowest fees in the industry and offers robust security for users. Additionally, the platform offers support for customers in 190 countries, whereas Coinbase is available in a little more than 100.

However, as a result of a 2023 settlement with the U.S. Securities and Exchange Commission, Kraken is ending staking services to U.S. clients. Therefore, U.S. traders will need to look to other platforms, such as Coinbase, for those services.

Methodology

We compared Kraken and Coinbase side-by-side to uncover the overall cost of trading on the platform, including deposit and withdrawal fees, while considering supported fiat currencies. For both platforms, we looked at multi-layer security options and past incidences of security breaches. We also reviewed transaction types and how options differ for people living in different locations. Furthermore, we explored the quantity and popularity of supported cryptocurrencies while giving points for advanced features, such as offering a digital wallet or market watch tools.

Investing in cryptocurrencies, Decentralized Finance (DeFi), and other Initial Coin Offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies nor can the accuracy or timeliness of the information be guaranteed.