Coinbase and Kraken are two of the best places to buy crypto after the end of Mt Gox. The crypto exchanges are quite similar in structure, yet differ in application. You can trade, buy, and sell as a beginner or advanced crypto trader on Coinbase and Kraken. The two platforms offer investors many cryptocurrencies, including altcoins and easy-to-use, highly-rated mobile trading platforms. The two cryptocurrency exchanges are based in the United States and accept fiat payments for convenient deposits.
Despite their similar functions, Coinbase and Kraken have unique features that differentiate one from the other. Due to the difference in their maker-taker fee, it is more beneficial for investors with low capital to trade on Kraken than Coinbase. Conversely, with Coinbase Earn, new crypto investors can understand more about a coin before investing in it and earn a reward in the process.
What is a Crypto Exchange?
Crypto exchanges allow you to buy, sell and trade digital assets like Bitcoin, Ethereum, Litecoin, and Solana. They offer users a plethora of crypto options to transact as well as a wallet to store their assets. Crypto exchanges allow buyers (or takers) to meet sellers (or makers) to facilitate trade and generally can be divided into one or more of the following types:
Centralized Exchanges (CEX)
There are centralized crypto exchanges (CEX) that work like a bank, keeping users’ funds and their private keys in custody. They are also known as custodial crypto exchanges, and they act as intermediaries or brokerages between buyers and sellers of cryptocurrency. Coinbase, Kraken, and Crypto.com are some of the most popular centralized exchanges.
Decentralized Exchanges (DEX)
On the other hand, investors are responsible for their private keys and consequently their asset’s security on a decentralized exchange. Direct peer-to-peer transactions are carried out on DEX. Examples of DEX include Uniswap, Pancakeswap, and Sushiswap.
A hybrid cryptocurrency is crypto marketplace with a combination of CEX and DEX. Hybrid crypto exchanges include Eidoo, and Legolas.
What to Look For when Buying Crypto from an Exchange?
There are hundreds of digital currency exchanges today. So, it can be tedious to search for the one that fits your needs. When shopping for a cryptocurrency exchange, regardless of how long you have been trading virtual assets, a number of factors should stand out as key deciding points.
The fees you pay on an exchange will eventually determine your gain after your transaction. If the maker-taker fee is high and you frequently carry out the transaction, fees could end up taking a big chunk out of your account. This is especially true of the more active traders. Ensure the exchange gives full disclosure of their fees before initiating a transaction.
There are thousands of cryptocurrencies in existence today. While Bitcoin and Ethereum are the major coins, there are profitable altcoins that you can also trade. Some cryptocurrency exchanges like Robinhood offer just sixteen coins, while others like Coinbase list over 50 cryptocurrencies on their platform. Check if the crypto exchange supports the coin you want before you sign-up on it.
The availability of a crypto exchange in your geographical location will allow you to trade and benefit from the array of benefits it offers. There are many region-based digital currency exchanges, so it is best you confirm that the exchange is available in your country. Even if the exchange is present in your country, different state regulations on crypto exchange might prevent the exchange from operating in your state. For instance, Kraken is unavailable to New York and Washington residents, and those living in Hawaii cannot access Coinbase.
Security and Privacy
Custodial wallets keep both your fund and private keys safe for you, but they are susceptible to hacks. However, most reputable centralized exchanges combine both cold and hot storage to ensure that all funds are tightly secured. Also, centralized exchanges are mostly regulated and require KYC, which means you cannot remain anonymous. Nonetheless, if you cannot trust a centralized exchange with your private key or want to carry out a trustless transaction, a decentralized exchange is your best fit.
Bonuses and Rewards
Cryptocurrency exchanges regularly offer sign-up bonuses, referral rewards, affiliate bonuses, staking, and saving bonuses. Bonuses and rewards boost your investment in an exchange and encourage savings. Look for the conditions attached to benefit from the bonus before you create an account with any exchange.
What is the sign-up bonus on Kraken?
Kraken is a crypto exchange with one of the best sign-up bonuses in the industry through its affiliate program. Kraken does not currently offer new users bonuses, but social media influencer can earn as high as $1000 when people join Kraken through a referral link. With some attached terms and conditions, if anyone joins through the referral link, Kraken grants 20% commission from the referral’s trading for as long as they use Kraken.
Pros of Kraken
Kraken is one of the most transparent centralized exchanges available today. The platform is famous for its incredibly low fees and the simple user interface on its mobile app. Security of users’ funds is paramount to Kraken exchange, which is why a significant portion of investors’ funds are kept in air-gapped cold storage. Established in 2012 by Jesse Powell, Kraken currently offers over 90 cryptocurrencies and 130 trading pairs. Apart from its comparably low fee, Kraken’s margin and futures trading make it stand out among other exchanges. In addition, Kraken offers user’s Cryptowatch, which allows advanced traders to track crypto markets and set alerts. Kraken supports staking for interest and crypto lending as well as borrowing to ensure investors get the most from their cryptocurrency platform.
- A wide selection of cryptocurrency
- Relatively low fees compared to other crypto exchanges
- Strong security
- Offers staking rewards and interest on a crypto loan
- Highly-rated Mobile trading platforms
- Excellent futures and margin trading
Cons of Kraken
- Kraken offers “instant buy” to make buying crypto easy but charges high fees on the feature.
- It might be difficult for beginner crypto traders to invest using Kraken.
- Kraken is not available in New York and Washington.
Pros and Cons of Kraken Crypto Exchange
|It has a wide range of cryptocurrencies available for trade.
|Its “instant buy” feature charges a high fee.
|Excellent security with offline cold storage feature.
|It is not available to residents of New York and Washington.
|Excellent futures and margin trading.
|Limited educational resources compared to Coinbase.
|Relatively low fees compared to Coinbase
|Offers staking bonus and interest on crypto lending
|Mobile App with simple user interface
What is the sign-up bonus on Coinbase?
There are two kinds of sign-up bonuses on Coinbase. You can get a $10 BTC sign-up bonus if you join Coinbase through a referral link and fund your account within the first 180 days of opening your account.
Also, Coinbase offers $5 in BTC if you join the exchange and verify your identity with your license, or ID card or you buy a coin after you add a payment method to be eligible for the offer.
Pros of Coinbase
Coinbase has one of the widest arrays of cryptocurrencies and crypto-to-crypto trading pairs. The exchange offers over 100 coins and tokens with 81 trading pairs. The US-based digital currency exchange can be used by crypto newbies and advanced traders, institutional and retail investors as well as low-capital traders and high net worth individuals. The Coinbase mobile app is famous for its simplicity, and its educational resources are top-notch.
- Provides outstanding security for investors’ funds.
- Offers incentives to crypto newbies who want to learn through Crypto Earn
- Investors can pay with cryptocurrency using Coinbase Visa cards
- Wide range of cryptocurrencies
- Free on-ramp fiat to crypto conversion
- Simple user interface
Cons of Coinbase
- High trading fees compared to Kraken
- It’s available in fewer countries than Kraken
Pros and Cons of Coinbase
|Security for users’ funds.
|Higher trading fees.
|Coinbase Visa cards make payment with cryptocurrency easy.
|Available in fewer countries.
|Wide range of cryptocurrencies.
|Simple user interface.
|Coinbase learn and earn make learning crypto attractive for cryptocurrency newbies.
|Easy funding access.
Coinbase vs. Kraken- What is the Best Cryptocurrency Exchange?
Choosing between Coinbase and Kraken might be a little tricky for crypto investors. However, if you are a new investor looking for an exchange that has more cryptocurrencies, Coinbase has more coins. For a high net worth individual, you are limited to a maximum deposit of $25,000 on Coinbase, so you should consider Kraken. It is easier to fund Coinbase than the Kraken account, though. Both cryptocurrency exchanges offer cold storage wallets, but Coinbase takes it up a notch with its hot wallet feature. Low-capital investors do not need to fund their Kraken account as it has a $0 minimum compared to Coinbase’s $2.
|0% to 1.5%
|0.50% to 3.99%
|95% of assets in Air-gapped cold storage
|98% of assets in cold storage
|The US states not supported
|New York and Washington