Coinbase and Kraken are two of the oldest, largest and most popular cryptocurrency trading platforms on the market. They each present their users with desirable benefits and potential drawbacks, which we will discuss in this guide, as well as take a closer look at their features, fees, coverage, security approach and ease of use to determine how they compare to each other.
INTRODUCTION
Coinbase and Kraken are cryptocurrency exchanges that allow their users to buy, sell and trade digital assets, among other similar services.
Both platforms were created at almost the same time, with Kraken being launched by Jesse Powell in 2013 after two years of development and Brian Armstrong and Fred Ehrsam establishing Coinbase in 2012.
Over the years, both exchanges have expanded from simply offering cryptocurrency brokerage services to include trading, betting and custody for retail and institutional clients, among others. However, even with the similarity of services, their business approaches are quite different.
They offer different trading experiences, charge varying fees and even some of their crypto services differ. Because of these differences, one exchange may be more suitable for some users in certain specific situations compared to others.
Read on to find out which of the two platforms may be a better option for your cryptocurrency investment needs.
COINBASE VS. KRAKEN: FEATURE COMPARISON
When it comes to the list of products, Coinbase offers a bit more than Kraken, but not all Coinbase customers have access to the same services. It all depends on your region of residence.
For most Coinbase customers, these are some of the features available to them:
Brokerage: the exchange allows its users to buy and sell their cryptocurrencies to and from the platform, as well as spend digital assets from their online accounts.
Trading : Coinbase supports advanced trading options on its professional-focused Coinbase Pro platform, with customers having access to tools such as the order book, charting software, multiple order types and trade history.
Staking: The platform allows some of its users to participate in some betting networks in exchange for betting rewards. Currently, six digital assets can be staked, which are: Ethereum (ETH2), Algorand (ALGO), Cosmos (ATOM), Tezos (XTZ), DAI and USD Coin (USDC).
Borrow cash: Coinbase has a lending feature where its users can borrow cash and use their Bitcoin as collateral without credit checks.
Learn and earn: Coinbase’s learning section allows beginners to discover new crypto projects, learn about them and be rewarded in tokens representing these projects.
Coinbase Card: a debit card created in partnership with Visa that allows Coinbase users to spend cryptocurrencies within their accounts at merchant locations around the world.
Private Client: this is a service for high net worth individuals where they get dedicated support and hands-off expertise to manage their crypto assets.
Commerce: this is a feature designed for merchants to accept cryptocurrency payments in their online or offline shops.
Coinbase Wallet: a standalone, self-custodial crypto wallet with web functionality3 that allows anyone to store digital assets, including non-fungible tokens (NFTs), and interact with decentralised applications (dApps).
When it comes to Kraken, you get access to some of the following features:
Instant purchase – Kraken allows its users to buy cryptocurrencies instantly using credit/debit cards, digital fiat wallets or through online banking and ACH transfers
Trading: the exchange offers a peer-to-peer trading experience for spot, margin and futures trading with up to 5x and 50x leverage in the latter two markets, respectively. High-volume traders can also access the over-the-counter (OTC) platform for more exclusive trading.
Account management service: this is an exclusive service for high net worth individuals seeking a white-glove crypto investment strategy, and Kraken offers dedicated customer support and other personalised services.
Staking: Kraken customers have the option to earn passive rewards by staking PoS (Proof of Stake) coins, fifteen of which the platform supports, including Algorand (ALGO), Cardano (ADA), Solana (SOL), Ethereum (ETH 2) and Polkadot (DOT).
Cryptocurrency indices: the exchange offers price indices for some of the major crypto assets with data feeds from multiple highly liquid cryptocurrency trading platforms. Currently, Kraken’s price indices transmit data on Bitcoin, Bitcoin Cash, Ether, Ripple-XRP and Litecoin.
Cryptowatch: As the name suggests, this Kraken feature allows professional cryptocurrency traders to monitor more than 2,000 markets across multiple cryptocurrency exchanges to give them a more complete overview of market conditions. Cryptowatch includes a charting and trading interface called Trading Terminal with features such as order book analysis, depth charts, trade feed and trade history.
From the above list of features, it is easy to notice that Kraken focuses on providing the best trading experience for professional traders rather than providing a healthy digital asset platform for all cryptocurrency investors. Coinbase, on the other hand, has a more elaborate list of features that most crypto investors need.
COINBASE VS. KRAKEN: ACCESSIBILITY AND COMPATIBLE ASSETS
Both Kraken and Coinbase can be accessed by users on six continents, which are:
Africa;
Asia;
Europe;
Oceania;
North America;
South America.
Coinbase is available in half as many countries as Kraken, which is 100 for the former and over 200 for the latter. Both are available within the United States, but Coinbase operates in more states, including New York and Washington, two major regions where Kraken is not licensed to operate.
The number of cryptocurrencies supported also varies between the two, with Coinbase leading with more than fifty assets at 155, while Kraken supports around 105. Users, however, can access some of the major crypto assets on either platform, except Ripple’s XRP, which, despite being among the top digital assets by market capitalisation, is not available on Coinbase.
It is also worth noting that the availability of supported cryptocurrencies depends on the region in which the user resides and the product with which the user is interacting. For example, Kraken’s spot market has the widest selection of supported assets, while the margin and futures markets have limited digital assets.
fiat currencies are also available on both Coinbase and Kraken, but Kraken has broader coverage and therefore supports more national currencies, which include:
US Dollar (USD);
Euro;
Australian Dollar (AUD);
Canadian Dollar (CAD);
Pound Sterling (GBP);
Swiss Franc (CHF);
Japanese Yen (JPY).
Coinbase, due to its emphasis on adhering to financial regulations, currently only supports three main national currencies, which are the US Dollar, Euro and Pound Sterling.
COINBASE VS. KRAKEN: PLATFORM FEES
The various types of services offered by cryptocurrency exchanges will attract different fees, as will the various trading platforms. Here are some of the fees charged by Coinbase:
Brokerage services: on Coinbase.com’s consumer-facing interface, the exchange charges relatively higher fees than most platforms. The current charges to purchase Bitcoin using the various payment methods supported by the exchange are:
US bank account – 1.49%.
Online fiat wallet – 1.49%.
Credit/debit card – 3.99
Instant card withdrawal: up to 1.5% of any transaction and a minimum fee of $0.55
Bank Wire Transfer – $10 deposit, $25 withdrawal
ACH transfer – free of charge
Trading fees: these fees apply to the professional platform, and are based on a maker/taker pricing model where the former is charged slightly lower fees compared to the latter. In addition, the more an investor trades, the lower the charge. The current Coinbase Pro trading fee rates are:
Credit transactions: applies to trades involving Coinbase’s lending function. Coinbase charges a 2% fee for liquidating collateral to repay a cash loan to a borrower.
Coinbase Card: the exchange will charge a 2.49% fee on card purchases for all cryptocurrencies, except USD Coin (USDC), whose transactions are free.
Betting services: Coinbase charges a 25% fee on all rewards owed for the six coins it supports in its betting service.
Kraken charges lower fees than Coinbase on almost all comparable services. Here are some of these outstanding fees:
Instant buying: this is the same as Coinbase’s brokerage service, and the fees charged by Kraken to buy and sell cryptocurrencies instantly include:
Kraken fee: 0.9% for stablecoin trades and 1.5% for other digital assets and currency pairs.
Credit/debit cards – 3.75% + $/€0.25 in addition to the Kraken fee specified above.
Digital wallet: Kraken charges 3.75% + $/€0.25 per transaction.
Online banking / ACH – 0.5% in addition to the Kraken fee specified above.
Pro trading: these fees only apply to the spot market, and are as shown in the figure below. At each transaction level, Kraken charges marginally lower than Coinbase Pro.
Margin and futures trading: Kraken charges a variable margin position opening fee of 0.01% or 0.02% for all supported currencies and a rollover fee of 0.02% every 4 hours. Professional trading fees also apply to opening and closing margin positions.
For futures market trades, Kraken employs a maker/taker pricing model to determine the applicable fees. Here is a breakdown of the different pricing levels involved in futures trading.
Wagering services: Kraken does not charge a uniform commission rate across all wagering currencies, but comparison with Coinbase shows that it remits higher rewards to its users, meaning it consistently receives a lower cut. Here is a simple comparison for three common assets on both platforms:
Algorand (ALGO) – 4.75% on Kraken vs. 4.00% APY on Coinbase;
Tezos (XTZ) – 5.5% on Kraken vs. 4.63% APY on Coinbase;
Cosmos (ATOM) – 7% at Kraken vs. 5% APY at Coinbase.
Kraken Exchange charges lower fees across the board on comparable services such as trading, staking and instant purchases.
COINBASE VS. KRAKEN: SAFETY AND SECURITY
Both Kraken and Coinbase have been around for a decade or so, thanks in part to their security practices. Cryptocurrency exchanges are regularly compromised, but the two have maintained a stellar record, except for a minor security incident affecting Coinbase users reported in October 2021.
According to reports, around 6,000 Coinbase users fell victim to an elaborate phishing attack whose success was also made possible by utilising a vulnerability within the exchange’s multi-factor authentication process. The attack occurred between April and May 2021, and Coinbase did not disclose further details or how much customers lost.
We have reviewed the security measures taken by both Coinbase (read here) and Kraken (read here) in separate articles, but here is a brief summary of how both platforms approach the security of their systems and assets.
Coinbase security measures
Cold storage: the exchange reportedly stores up to 98% of its customers’ crypto assets offline in safes and vaults around the world.
Data security: customer and exchange information is encrypted using AES-256 standards, split for redundancy and stored offline on FIPS-140 USB drives and paper backups, and similar to private wallet keys, this data is also distributed geographically in vaults and vaults around the world.
Website security: All Coinbase and affiliated websites employ secure security standards, such as the use of Secure Sockets Layer (SSL) encryption (HTTPS) to maintain the privacy of website traffic.
Wallet security: Coinbase’s independent self-custodian wallet allows its users to set up secure passwords and use biometrics to authorise transactions. The wallet also requires users to store their backup seed phrases securely.
Secure: The exchange has insured all USD balances of all US-based customers with the FDIC for a sum of $250,000.
To prevent internally instigated attacks, Coinbase has taken additional measures when recruiting employees, such as conducting strict background checks and limiting access to resources to a minimum for each employee necessary to perform their duties. Employees are also mandated to encrypt their hard drives, use strong passwords, enable screen locking and use multi-factor authentication on all company devices.
On the front-end user side, the exchange has implemented the following measures:
KYC verification;
Second factor authentication via SMS, 2FA authentication applications and automated phone calls;
Ability to use hardware keys to log in for added security.
Kraken security measures
Cold storage: Kraken reportedly stores up to 95% of its customers’ cryptocurrency assets in off-line, air-spaced and geographically distributed cold storage.
Information security: the exchange ensures that all sensitive information about customers and security systems is encrypted at rest, with restrictive access to its location.
Platform security: Kraken reports that it maintains its servers rather than using cloud services, and all of its server locations are under strict round-the-clock surveillance.
Penetration testing: The company maintains robust security auditing practices to ensure that systems are functioning as expected.
Bug bounty: Kraken maintains a perpetual bug bounty to encourage independent analysts to poke holes in the exchange’s security systems and infrastructure.
On the client side, the exchange has implemented the following security measures:
Enhanced account access tools, including the use of MaskerKeys, Global Configuration Lockdown (GSL) and 2-factor authentication through applications and hardware keys;
Use of PGP to enable private email communication between clients and the exchange;
Watermarking documents to ensure they are unusable if the platform experiences a security breach;
Use of artificial intelligence to provide real-time monitoring of suspicious activity;
Websites use SSL encryption to protect online traffic:
Second factor authorisation for asset withdrawals via SMS and email.
Both platforms use these and many more security measures, which history has shown to be very effective in protecting their systems and keeping client funds safe.
COINBASE VS. KRAKEN: USER EXPERIENCE
Both Coinbase and Kraken are designed for simplicity with consideration for cryptocurrency beginners. However, Coinbase is much more intuitive to use, and this user experience carries over to all of its platforms, including the mobile app, crypto wallet and website.
Kraken, due to its emphasis on offering essential services to professional traders, means that the platform sacrifices some aspects of its beginner-friendliness. Even with this focus, the exchange manages to offer a smoother user interface than most other platforms.
There are three applications through which you can access the kraken exchange depending on your needs:
The Kraken app – for instant buying and selling of digital assets, plus it is ideal for new cryptocurrency investors;
Kraken Pro – for more advanced users to trade within the spot and margin markets;
Kraken Futures – for advanced traders looking to trade the crypto futures markets.
Coinbase has two mobile apps:
Coinbase Exchange App: an extension of the trading platform;
Coinbase Wallet: the self-custodial crypto wallet with storage features for cryptocurrencies and non-fungible tokens, plus the ability to browse decentralised apps.
COINBASE VS. KRAKEN: PROS AND CONS
Advantages of Coinbase
Offers an intuitive interface for beginners across all platforms and properties;
Highly regulated and accessible in restricted regions such as the US states of New York and Washington;
Maintains strong security practices to protect its systems and customer assets;
Offers more features than Kraken;
Listed on the NASDAQ exchange, making your finances easy to verify;
Supports more digital assets with regular ongoing additions;
Coinbase caters to a wider audience, including retail, commercial and institutional clientele.
Cons of Coinbase
Does not offer margin trading or futures trading;
Available in fewer countries than Kraken;
Its full suite of products is not available to all users;
Charges significantly higher fees on its consumer platform;
Its betting service only supports a limited number of currencies.
Kraken Pros
Kraken has maintained an impeccable safety record in its decade of existence;
It is highly regulated and available in most US states;
It is accessible in more countries than Coinbase;
The exchange offers a comprehensive set of trading tools ideal for professional investors;
Supports a wider selection of fiat currencies and funding options;
Its charges lower transaction fees and wagering commissions than Coinbase.
Cons of Kraken
Offers fewer products and services to its users than Coinbase;
Kraken supports fewer cryptocurrencies for trading;
Kraken’s interface is not as intuitive to use as Coinbase, making it less ideal for beginners.
FINAL THOUGHTS
There are many commonalities between Coinbase and Kraken. For one thing, both are based in San Francisco and were founded at about the same time. They adhere to financial constraints in all the markets in which they operate, and both strive to meet the needs of their customers.
However, even with the various similarities, the two exchanges operate differently, which helps them attract different customers. Coinbase tends to attract users who value a user-friendly interface, while Kraken caters more to the professional investor who values the availability of tools and options.
Whichever camp you want to identify with or gravitate to, you’ll be well covered on these cryptocurrency trading platforms.
COINBASE VS KRAKEN: FREQUENTLY ASKED QUESTIONS
What is Coinbase and Kraken?
These are two of the most popular cryptocurrency trading platforms based in the United States, but available globally in over 100 countries. They allow their customers to buy, sell, trade and exchange their digital assets with Coinbase, providing an external wallet for self-custody as well.
Are Coinbase and Kraken exchanges secure?
Yes, they are. Both Coinbase and Kraken adhere to strict security standards to ensure their systems and assets are secure. They employ security measures such as cold storage, data encryption, SSL (HTTPS) routing of web traffic, as well as providing their users with the necessary tools to help protect their accounts.
What are the funding options supported by Coinbase and Kraken?
Between the two exchanges, users can deposit fiat currencies via bank transfers, ACH, online wallets and credit/debit cards. With Coinbase, there is the added advantage of using PayPal to deposit and withdraw funds. Users can also send cryptocurrencies from external wallets to either platform.
Which is better: Coinbase or Kraken?
Both are good cryptocurrency trading platforms with benefits and drawbacks. Whether one is better than the other will come down to personal preferences and user needs.
