Kraken was founded in 2013 and has since built a long reputation of being a reliable and trusted exchange.  Kraken was actually the exchange I chose for myself when first buying bitcoin and as a result, it’s the exchange I compare others against.  I still rate it quite highly.  It allows you to do pretty much everything you would want to on a crypto exchange which makes it, for me at least, swiss army knife of exchanges.

Kraken safety of funds

Kraken holds full reserves and employs an independent audit to prove the funds are properly held.  This level of transparency has helped provide a level of assurance and accountability that is above and beyond traditional financial services.

Kraken was chosen to assist with the investigation of lost bitcoin from the Mt Gox liquidation and started accepting claims from creditors to claim their share of the recovered Mt Gox funds.   

Opening an account at Kraken

It is relatively straightforward to open an account at Kraken, however there are a few restrictions that should be noted.  Kraken doesn’t offer services to residents of New York or Washington state, due to the increased level regulatory compliance required in those states and the high cost associated with maintaining this compliance.  Other notable restrictions are residents of Japan are not offered Kraken services, and residents of New Hampshire and Texas, cannot deposit, hold or trade in Euros.

You can open an account at Kraken here

Funding a Kraken account

Funding is accepted via fiat currency US Dollars (USD), Euros (EUR), and Canadian Dollars (CAD), all with minimal fees. Depositing funds with CAD and EUR SEPA (Single Euro Payments Area) is free.  Beyond this you can of course fund your account with Cryptocurrencies.

There are deposit limits in place which depend on your ID verification level.  There are 3 levels.  Starter, Intermediate and Pro.   And limits are calculated on an annual, monthly and daily basis.  Fiat funding and withdrawals can only be done on an Intermediate or Pro account with a limit of 100k /10m USD per day or 500k/100m USD per month for the intermediate/Pro accounts respectively. 

Starter accounts can deposit an unlimited amount of Crypto currencies but withdrawals are limited to 5k/150k per day/month calculated in USD.

Using Kraken

Once logged in, the layout is simple and isn’t difficult to navigate but doesn’t have the simplicity or minimalism of BitMEX or Cex.io.  Being the swiss army knife of exchanges and being all things to all people requires a big site.  There is a thorough support and tutorial section, which will help those new to crypto or trading find their footing, a section for simple spot orders, a section for leveraged futures contract trading, a podcast, a blog etc etc..  Its impressive that the site being so big, is as easy to navigate as it is.  While it is easy to fall down a rabbit hole with the sheer amount of content and support pages, its easy to find your way to wherever you want to be and find what you need.   

Trading Crypto with Kraken

Over the years Kraken has developed their Trading platforms and offers an impressive amount of trading pairs.  Fees are low for the industry but if you are planning on high volumes and are having the lowest fees is a crucial factor, we recommend you have a look at Binance and the fees they offer.  Compared to Binance, Kraken does charge more.  If you are trading a lot of volume perhaps as a scalper or high-volume trader, that will become significant, but for most people the difference will not be noticeable.

Leverage on Kraken spot and futures market

Kraken offers margin trading on the spot market with 2x up to 5x leverage depending on the trading pair.

Kraken also has a separate trading area for Futures Trading, simply called Kraken Futures. They are authorised and regulated by the Financial Conduct Authority.  This service is not available to US clients as well as clients from other restricted countries.  However, for those that can sign up to this service, Retail clients with limited experience can use up to 2x leverage.  Professional/regulated firms or those people that have stated that they have significant experience and understanding of derivatives (classed as elective professional clients) can benefit from up to 50x leverage with a perpetual, monthly and quarterly maturity schedule.   

According to their website as of Feb 2020 Kraken currently lists

  • Futures on the US Dollar price of bitcoin
  • Futures on the US Dollar price of Ether
  • Futures on the US Dollar price of Litecoin
  • Futures on the US Dollar price of Ripple XRP
  • Futures on the US Dollar price of Bitcoin Cash
  • Futures on the bitcoin price of Ripple XRP.

 

Kraken API

As with BitMEX, Automated traders will find Kraken offers a REST API and a streaming WebSocket API.

Whether Kraken would be the choice for a professional trader would be individual preference.  There are a number of small differences between the offerings.  Kraken offers 50x leverage compared to BitMex’s 100x so scalpers may prefer Bitmex.  The contracts on BitMEX are all settled in BTC whereas the Kraken contracts are settled in the collateral asset i.e. the Coin that you are speculating on. Kraken fees are higher than BitMEX, once again making them the choice for scalpers, however the Kraken contracts are simpler.  The Kraken contracts are futures on the dollar price of these cryptos whereas the BitMEX ones are futures on the BTC price of the contract.  One major difference Kraken has over BitMEX is that Kraken accepts Fiat deposits/withdrawals whereas BitMEX focuses solely on BTC.  This means if you wanted to get your Fiat Funds to BitMEX, you would have to go through Kraken (or a similar exchange ) to do so.  As a result, it wouldn’t be unreasonable or uncommon to have an account on both exchanges

Open an account at Kraken here