Comparing Kraken and Coinbase: Which One Is Better?

Kraken dan Coinbase are two of the biggest crypto exchange platforms right now. But, what happens if we compare them head to head?

Kraken and Coinbase are two of the most popular cryptocurrency exchange platform right now. Both platforms are known to have the biggest trading volume compared to any other exchange platform. These two have similar features, but there are some factors that distinguish them from each other. This is why many crypto traders have doubts when they have to choose between Kraken and Coinbase. Although it's hard to establish which exchange is the best, you can compare them to find out which one has the best feature to fulfill your trading needs.

Kraken Vs Coinbase at Glance

Kraken is an exchange platform created by Jesse Powell in 2011. It started to gain more popularity after the infamous Mt. Gox hack incidents that cost its users over $450 million in Bitcoin. Kraken has become one of the go-to exchanges for Bitcoin trading ever since. This exchange platform provides over 50 currencies which includes Ethereum, EOS, Monero, and many more, making it one of the biggest crypto platforms in the world.

There are other reasons that play an important role in Kraken's rising to fame. For example, in 2014, Kraken (along with Coinbase) was ed to provide the market data of Bitcoin trading. At the time crypto, has just started gaining popularity, so there are not too many choices. Shortly afterward, Kraken partnered with TradingView, one of the global leaders in the chart service provider. This factor alone made Kraken become one of the most obvious choices for the crypto traders at the time.

Coinbase was founded in 2021 by Brian Armstrong and Fred Ehrsam. It has become one of the most popular centralized exchanges in the US. Right now, Coinbase supports various top cryptocurrencies available in the market. Their apps are considered very intuitive and perfect for beginners. However, they lack advanced features that might benefit professional crypto traders.

One of the main reasons why Coinbase is very popular is due to the fact that it allows users to use cryptocurrency as a form of payment. Another reason is that Coinbase lets users check their portfolios through their smartphones. So, they can check which coin is going down and which one is going up more easily. But, keep in mind that there might be other trading fees when you buy a small amount of crypto in Coinbase.

How Can You Use Them?

In order to use Kraken and Coinbase, you have to be registered in their exchanges. Creating an account in Kraken is quite easy, first of all, you need to register through your email address and set a password. Once your email address has been verified, the next step is to secure your account using two-factor authentication. Now, you need to deposit your funds to start trading. In this stage, you'll need to go through advanced verification by submitting a picture of your photo ID, proof of residence, and your Social Security number. You can fund your account through a digital wallet of your choice or wire transfer.

Signing up in Coinbase is more or less similar to Kraken's signing up process. You can create an account with an email address and password. You will be required to verify your identity with a government-issued photo ID that you must upload to the app or website. Once your account has been verified, you can connect it to your bank account or credit card to begin purchasing crypto immediately. Although the process is not complicated, both Kraken and Coinbase require you to be at least 18 years old to register.

Let's Compare Kraken and Coinbase

In hindsight, Kraken seems to be geared towards professionals by offering more complex features and such. Meanwhile, Coinbase is more fitting for new traders who had just started venturing into the world of crypto trading. Nevertheless, there are more underlying factors that differentiate those two exchanges.

1. Features

Let's start with the availability of these exchange platforms. Right now, Coinbase is available in+ over 100 countries, while Kraken is in 176. It seems like Kraken won in terms of availability. But, it's worth noting that Kraken isn't available in two of the biggest states in the US.

When it comes to margin, Kraken offers up to 5x leverage. Although that sounds like a huge amount, it's actually average in this industry. Still, it is higher than Coinbase that only offers 3x. In considering this, you need to remember that high leverage means higher risks lurking in the shadow.

Both Kraken and Coinbase present well-built mobile applications that allow you to access all available features. Kraken offers Cryptowatch, which is a trading terminal that analyzes and generates data over thousands of cryptocurrency markets. You can monitor the price movements and market trends set price alerts based on your personal preferences. Sadly, Kraken's app isn't available in seven countries including Japan and the U.S. 

Meanwhile, Coinbase provides users with a hot wallet they can use to deposit, store, and withdraw currency. You don't have to be registered in Coinbase to use the wallet, making it ideal for traders to transfer between various fiat currencies and crypto products. Although Kraken offers a digital wallet to store coins in between purchases, it does not provide a personal wallet service.

2. Instruments

Both Kraken and Coinbase feature a wide range of cryptocurrencies to trade. Kraken currently supports around 56 cryptocurrencies while Coinbase only supported 50. For traders who want broader choices, Kraken seems like the obvious choice. However, this is not necessarily true, since there are some cryptocurrencies that are not available in Kraken but are supported in Coinbase. For example, Kraken doesn't provide Cardano while it is available in Coinbase. In the end, it's a matter of which coins you want to trade.

3. Security

Safety is one of the most crucial things when choosing an exchange platform, especially considering how often crypto hacking happened in the past. Thankfully, both Kraken and Coinbase have solid security track records; neither had any significant breaches. Both exchanges apply similar measures in keeping their assets safe. Kraken stores 95% of its assets in guarded cold storage with strict surveillance. Meanwhile, Coinbase keeps 98% of deposits in offline, geographically distributed cold storage.

On the user side, Kraken and Coinbase administer multi-layered security features that include security keys, which are physical security keys that authenticate your login and generate a one-time passcode. Each exchange also guides you through setting up PGP encryption for online communications with the exchange in order to keep all the data private and secure. Furthermore, Kraken and Coinbase use 2FA when making withdrawals and transfers. Kraken adds highly secure apps like Google Authenticator for logging in, meanwhile, Kraken uses authenticator apps.

4. Fees

Another parameter when choosing the best exchange platform is how expensive are the fees. Although Kraken and Coinbase both have high fees for buying cryptocurrency, all the features and safety they offer are actually worth it. Both exchanges charge different fees according to which payment method you are using. Here is an illustration of each platform's fee schemes.

5. Beginner-Friendly

User experience is an important factor when you are using an online exchange platform, especially for smartphone users. In this matter, both Kraken and Coinbase provide a reliable experience on desktop and mobile devices. Coinbase is geared more towards new traders by offering a quick sign-up process and keeping trading features and funding options simple. That way, even an inexperienced trader can easily use their service and start trading cryptocurrencies right away.

On the other hand, Kraken offers a great exchange platform for professional traders who need more complex features. If you are interested in trading large sums of money, Kraken is definitely the answer as they have stringent security measures. Surely you don't want all those money to disappear somewhere you can't trace like what happened in the DAO hack incident, right? However, keep in mind that the complex user interface in Kraken can be discouraging for new traders who have fewer experiences with exchanges.

Final Verdict

So, which exchange platform is the best for all kinds of traders? Surely, both Kraken and Coinbase have unique features that allow them to be two of the most prominent exchanges for crypto trading at the moment. For example, Coinbase aims to provide new crypto traders with a simple platform, where they can start trading immediately without having to worry about complicated processes. Meanwhile, Kraken offers more advanced support for professional traders to fulfill their trading needs.

So, does that means one exchange is necessarily better than the other? The answer is no. There are some reasons that make both platforms have their own hardcore fans. Perhaps there is one aspect that seems to make Kraken is better than Coinbase and vice versa, but there are always aspects that make one exchange lack something that the other exchange doesn't. In the end, it's all a matter of preferences and what you need in a trading platform. That is why it's important to compare one exchange to another, to make sure you get all your needs covered.

Seeing how Kraken's availability in the United States is quite limited compared to Coinbase, it's probably safer to choose Kraken if you reside in the US. As a matter of fact, the country has a whole different set of rules when it comes to crypto trading, especially if you want to try margin trading.