Kraken – The Most Transparent and Secure Bitcoin Exchange
Kraken Exchange is one of the most established, transparent and secure exchanges in the Bitcoin space.
Founded by Jesse Powell in 2011, Kraken is a regulated exchange based in the U.S. with a huge usership across Europe, Canada, and most of the US.
It’s a fiat on and off-ramp for USD, CAD, GBP, EUR, AUD and accepts payments via several methods, and low fees for withdrawals.
Kraken offers many different trading options, such as limit orders and stop-loss orders, margin trading and what the exchange calls its ‘dark pool’.
With an average trading volume of $8 billion a month, Kraken is the eighth largest cryptocurrency exchange by volume.
Kraken’s fees are among the lowest in the industry, and the exchange regularly passes the Proof-of-Reserves audit, which many other exchanges refuse to undertake.
As well, it being the most transparent exchange in the Bitcoin space, Kraken willingly undertakes a security audit, and has a comprehensive range of security features making it arguably the most secure exchange.
Signing Up With Kraken
Kraken is available in the US, but it doesn’t have a licence to operate in New York (NY) or Washington (WA) states.
And apart from Japan, Afghanistan, Cuba, Guinea-Bissau, Iran, Iraq, North Korea, and Tajikistan the Bitcoin exchange is open for business in every other country.
Signing up with Kraken and opening an account is super easy, but because it is a fully regulated exchange to trade or withdraw you will have to pass a ‘know your customer’ (KYC) check. Don’t let this shouldn’t put you off, as it’s pretty quick and easy for the average trader
There are three levels of account verification on Kraken: Starter, Intermediate, and Pro.
First you create an account with the shirt form before completing the KYC form. For the Starter level it shouldn’t take more than 1 hour, but you are limited to how much you can withdraw, and you can’t deposit or withdraw fiat currencies.
The Intermediate and Pro levels give you many more options. The Intermediate level should be enough for most people, and will take up to 5 days to get verification, depending on your jurisdiction. The pro level is mainly for big time corporate investors.
How To Buy Bitcoin With Kraken
Once you’re verified, Kraken offers a variety of ways to buy Bitcoin. You can buy Bitcoin with either fiat currency or you can deposit other cryptocurrencies into your exchange account wallet and exchange that way.
Buy Bitcoin With Fiat Currency
Kraken doesn’t accept credit or debit cards so the only way to fund your account is by completing a bank transfer with either USD, CAD, GBP, EUR or AUD.
The supported deposit or withdraw services include:
- FewWire / FewWire (Etana Custody) (1 – 5 business days)
- SWIFT (2 – 5 business days)
- Silvergate Exchange Network (near-instant)
- SEPA / SEPA (Etana Custody / Fidor / Bank Frick) (0 – 5 days)
- Canadian domestic wire transfer (1 – 3 days)
- In-person cash/debit via Canada post (30 – 60 minutes)
- InterFIn (0 – 10 min)
- FPS/BACS (Clear Junction) (0 – 3 days)
- CHAPS (Same day)
- SIC (near instant on working days during business hours)
- Osko (0-2 business days)
Fees vary depending on your jurisdiction but expect to pay about $50 for the bank transfer.
Once your bank transfer has been cleared and your Kraken account has been funded you can trade immediately with the fiat currency you sent.
Costs for trading are very low on Kraken:
The fee for the trade maker is 0.16%, and for the taker it will be 0.26%. If you trade over $50,000 in any given month the fees will lower depending on the amount you trade.
Trade Bitcoin for Other Cryptocurrencies
Kraken has many Bitcoin (*XBT)/Altcoin trading pairs, and every pair is highly liquid, so there should be no problem trading at market prices.
The process is the same as buying Bitcoin with fiat currency, but simply click on the altcoin tab of choice.
*Although the actual Bitcoin ticker is BTC, when you buy and trade with Bitcoin on Kraken you are using a Bitcoin derivative (XBT). This is a completely legitimate procedure, and if you ever withdraw Bitcoin to your own address, Kraken will send you BTC.
Margin Trading on Kraken
As well as spot trading, Kraken offers margin trading for its users. This is especially useful for its US customers as Americans don’t have access to the two biggest margin trading platforms BitMEX or Bitfinex.
Kraken’s Margin Trading fees are as follows:
You should only attempt Margin Trading if you are a seasoned trader and know exactly what you’re doing.
Margin Trading on Kraken allows you to amplify your gains (or losses) by utilizing more complex trading strategies, such as long or short with up to x5 leverage.
The margin trading feature allows users to utilize Kraken’s professional trading interface, offering you more complex trading tools, which makes managing your positions easier.
Futures Trading on Kraken
If you want to really leverage your trading then Futures Trading might be for you. With Kaken you can trade futures using up to x50 leverage.
Futures are typically used by traders as a way to hedge other investments or to lock in profits when trading in volatile markets.
Kraken’s futures prices are based on aggregated indices that represent the demand Bitcoin from several different exchanges, so pricing is always clear and transparent.
Futures allow you to trade using collateral as low as 2% of the notional amount of Bitcoin, and allow you to take positions with up to 50x leverage. The returns can be lucrative, but of course the losses can be catastrophic, too.
Other Trading Features
Kraken has an OTC market for its pro traders. It provides one-on-one expert consultation all the way through to trade execution, offering global coverage, 24/7.
Kraken Dark Pool
The Kraken Dark Pool is a separate order book that’s hidden from the rest of the market, and whoever uses the Dark Pool is the only one that knows their orders.
It allows traders to anonymously place large buy or sell orders without revealing their interest to other traders.
Because the Dark Pool is an invisible order book, as a risk precaution, only limit orders are allowed.
And because the buy orders have to be met with your own funds, Margin Trading isn’t allowed in the Dark Pool
The Dark Pool is mostly for the bigger traders. It helps them hide their large order and stop others from likely doing the opposite, which should impact the market less than if it was on the open order book.
Fees are slightly more expensive in the Dark Pool. Ranging from 0.2%-0.36% depending on your trading volume, but if you’re trading large amounts it’s probably worthwhile.
Kraken Takes Security, Transparency and Customer Service Seriously
If Kraken’s liquidity and many trading options aren’t enough to entice you then security and transparency is what really makes it stand out from the rest.
Kraken’s Security Is Unmatched
I’m sure all reputable exchanges take their security seriously, but Kraken goes above and beyond compared to most cryptocurrency exchanges.
Kraken has been open for trading for over 7 years now, and it has never been hacked. And since launching, the platform has only been offline once, and that was only for necessary upgrades.
But what makes Kraken so secure?
Kraken only keeps 5% of its reserves in ‘hot wallets’ to maintain trading volume, and the other 95% of all Kraken deposits are kept in offline, air-gapped, geographically distributed and in cold storage, and unlike most other exchanges, Kraken keeps full reserves.
All wallets and any sensitive data is encrypted, and Kraken’s servers are located in secure cages under 24/7 video surveillance and by armed guards. Physical access and code deployment are strictly controlled, and nothing ships without intensive review.
Kraken also has a dedicated security team that continually runs tests, and offers regular bug bounty programs.
For your personal account, Kraken offers many forms of security, including:
- Universal 2nd Factor (U2F) authentication: This is the most secure way to protect your account. It requires a hardware device such as a YubiKey.
- 2FA: This can be set for only logins, or if you want more protection, you can set it for trades, funding, and when using Kraken’s API.
- Info-leakage protection: Opportunistic login and password recovery attempts won’t reveal any account information.
- PGP/GPG encryption for emails.
What makes Kraken so transparent?
Unlike most other exchanges, Kraken holds 100% reserves and the exchange is regularly audited by Blockstream’s Proof of Reserves.
The Proof of Reserves is an optional audit carried out by a third party, but most exchanges refuse to allow it.
The fact that Kraken allows it and has proof of reserves speaks volumes for Kraken’s ethics and it ensures its users will be able to withdraw their Bitcoin and all other cryptocurrencies, even if there was an ‘exchange run’.
And to make things completely transparent, any user can individually run an audit on their account whenever they like.
Kraken Customer Support
Kraken employs over 100 client engagement specialists to work on its customer support desk. It offers a global 24/7 customer support and chat in case any user has an issue while using the platform.
Anyone running into any issues, there will always be somebody from Kraken there to serve you. This isn’t normal practice in the Bitcoin exchange space, as most exchanges are unregulated, and many exchanges have a terrible reputation when it comes to customer support.
Kraken Is Arguably The Best Bitcoin Exchange
In the opaque exchange industry-wide world, Kraken really shines. Most exchanges are unregulated and although many people trade without issue on other exchanges, there are many stories of exchanges being hacked, and terrible customer service.
Kraken is one of the most liquid exchanges, and is one of the highest trading volumes in the Bitcoin space.
It’s an excellent gateway for anyone wanting to buy Bitcoin with USD, CAD, GBP, EUR or the AUD.
Although the signing up process is a little more arduous (this comes with regulations and fiat onramps), it really is worth signing up.
The transparency and ethics of Kraken is second to none, as is its security. Whether you’re a first time trader or a whale wanting to buy Bitcoin in bulk, Kraken guarantees liquidity and peace of mind.
Kraken is accessible pretty much everywhere, and you can buy Bitcoin there with the most peace of mind that any Bitcoin exchange offers.