In 2021, trading cryptocurrency is more popular than ever. The global COVID-19 pandemic has created a world where seemingly everyone is buying, selling, or investing long-term in crypto. Even with this boom in popularity, it may still surprise you to know that there are over 500 exchanges worldwide where you can trade crypto.
These exchanges operate 24/7/365 all around the globe. But the vast majority of these exchanges are not available to American crypto traders. In the U.S., only a handful are available to residents and, of these, there are a few that are significantly more popular than others.
Two of the most popular crypto exchanges in the U.S. are Coinbase and Kraken. U.S. traders use these platforms more than most others because of their widespread availability, ease of use, and range of features. Those features are different for each platform though.
Every trader has different needs, so it is likely one trader will prefer Coinbase while the other will favor Kraken. Here we give a basic overview of the important differences between Coinbase and Kraken to help you decide which crypto platform is better.
A Brief History of Coinbase
Coinbase was founded in 2012 by Brian Armstrong, previously of Airbnb, and Fred Ehrsam, formerly of Goldman Sachs. They started the platform as a way for people to buy Bitcoin using transfers from their bank accounts. Since then, Coinbase has grown into a company with over 1,200 employees and over $1.1 billion in annual revenue. They also offer two platforms, Coinbase and Coinbase Pro, the latter of which is their higher-end offering for serious traders.
A Brief History of Kraken
Jesse Powell, the founder of Kraken, toured Mt. Gox, the largest cryptocurrency exchange at the time in 2011. After that trip, he started making plans for his own exchange that could replace Mt. Gox if they ever went out of business. In 2014, this scenario actually played out and Powell’s Kraken was there to capitalize. In 2021, it is the fourth-largest crypto exchange in the entire world.
The Big Differences Between Coinbase and Kraken
These two platforms started out much differently and continue to operate much differently today. Below are the most important ways that the two exchanges vary. For in-depth information about the differences, this Cove Markets breakdown of Coinbase vs. Kraken is also helpful.
Kraken can be used in over 170 countries around the world, including the U.S. Coinbase is also available in the States as well as over 100 countries. While they are both available to U.S. residents, they both have restrictions in certain states. Traders can’t use Coinbase in Hawaii and Kraken is unavailable in Washington state and has had well-publicized issues with the state of New York.
Both platforms have what users generally consider a good user experience. One place that Coinbase has a leg up is that it offers two distinct platforms to cater to two distinct sets of users. Standard Coinbase is very simple and easy to use. It is clean and easy to understand for new users and users who just want a simple way to buy and sell crypto.
Kraken, on the other hand, is a no-frills platform that gives users what they need without any fluff. Many long-time traders swear by this site because it has been providing a consistent user experience for years. Kraken also delivers a highly user-friendly app that is well-reviewed on both Apple and Android devices.
Both these platforms offer a solid number of cryptocurrencies to trade on their exchanges. Coinbase allows you to trade 50 different cryptocurrencies while Kraken offers slightly more at 56. Where Kraken really excels though is in trading pairs. They offer over 200 trading pairs to Coinbase Pro’s 100 or so.
These pairs are much more varied in terms of trade volume on Kraken too. BTC/USD and ETH/USD constitute almost 50% of the trading volume on Coinbase Pro. On Kraken, XBT/EUR, XBT/USD (15%), and ETH/EUR are also very popular. The end result is that you have a few more options when you trade on Kraken.
Fees are where you can see a big difference depending on what type of trader you are. For novice traders, the fees on Coinbase are relatively high, which can be expected. For experienced traders, the fees on Coinbase Pro are also higher than on Kraken at most levels, except for the highest taker levels.
On Coinbase Pro, you are looking at taker fees that range from 0.5% to 0.04% and maker fees that start at 0.5% and go to 0 after you get to the $50 million a month threshold. On Kraken, takers will pay from 0.26% down to 0.1% and makers start at 0.16% and pay 0 after they hit $10 million.
One of the main reasons these two platforms are both extremely successful in the crypto space is because of their impressive security records. Both exchanges vet users very well and generally have no problems with security. Coinbase has never had a successful hack on its platform. Kraken had a small security hiccup in 2016 when hackers gained control of a few accounts, but they were able to neutralize the threat quickly and with minimal damage. They have not had a reported incident since.
Which platform is better? That depends on what type of trader you are and what level of tools, features, and fees you are looking for. Beyond those differences, they are both secure and widely available in the U.S. so most of the choice comes down to personal preference. Either one you choose, you will be getting a very good way to trade crypto.