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Coinbase vs Kraken [2022] | Crypto Exchange Comparison Guide

Justinas
Baltrusaitis
5 months ago
15 mins read

Coinbase and Kraken are two of the oldest, largest, and most popular crypto trading platforms in 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, approach to security, and ease of use to determine how they compare against one another.

Introduction

Coinbase and Kraken are cryptocurrency exchanges enabling their users to buy, sell and trade digital assets, among other similar services. Both of these platforms were created around the same time, with Kraken being launched by Jesse Powell in 2013 following two years of development and Brian Armstrong and Fred Ehrsam establishing Coinbase in 2012.

Over the years, both exchanges have expanded from simply offering crypto brokerage services to include trading, staking, and custody for both retail and institutional clients, among others. However, even with the similarity of services, their approaches to business 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 better suited for some users in certain specific situations as opposed to others.

Read on to discover which among the two platforms may be a better choice for your crypto investment needs.


Coinbase vs. Kraken: Features Comparison

When it comes to the product list, Coinbase offers a little more than Kraken does but not all Coinbase customers have access to the same services. It all depends on their region of residence.

For the majority of Coinbase customers, here are some of the features at their disposal:

  • Brokerage – the exchange allows its users to buy and sell their cryptocurrencies from and to the platform as well as spend the 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 staking networks in exchange for staking 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 in which its users can borrow cash and use their Bitcoin as collateral with no credit checks.
  • Learn and earn – the learning section of Coinbase allows beginners to discover new crypto projects, learn about them, and get rewarded in tokens representing these projects.
  • Coinbase Card – a debit card created in partnership with Visa allowing Coinbase users to spend crypto within their accounts in merchant points across the world.
  • Private Client – this is a service for high net-worth individuals where they get dedicated support and hands-off experience toward managing their crypto assets.
  • Commerce – this is a feature designed for merchants to enable them to accept cryptocurrencies payments in their online or offline stores.
  • Coinbase Wallet – an independent self-custody crypto wallet with web3 functionality enabling anyone to store digital assets, including non-fungible tokens (NFTs), and interact with decentralized applications (dApps).

When it comes to Kraken, you get access to some of the following features:

  • Instant Buy – Kraken allows its users to purchase cryptocurrency 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 upto 5 and 50 times leverage on the latter two markets, respectively. High-volume traders can also access the OTC (over-the-counter) platform for more exclusive trades.
  • Account Management Service – this is an exclusive service for the high net-worth individuals looking for a white gloves crypto investment strategy, and Kraken offers dedicated customer support and other personalized 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 pricing indices for some of the leading crypto assets with data sources from multiple high-liquidity crypto trading platforms. Currently, Kraken’s pricing indices relay data on Bitcoin, Bitcoin Cash, Ether, Ripple-XRP, and Litecoin.
  • Cryptowatch – as the name suggests, this Kraken feature enables professional crypto traders to keep tabs on more than 2,000 markets across multiple cryptocurrency exchanges to give them a more complete overview of the market conditions. Cryptowatch includes a charting and trading interface dubbed Trading Terminal with functions such as order book analysis, depth charts, trading feed, and trading history.

From the above features list, it is easy to note that Kraken focuses on offering the best trading experience for pro traders as opposed to providing a wholesome 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 supported assets

Both Kraken and Coinbase can be accessed by users in 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 more than 200 for the latter.  Both are available within the United States, but Coinbase operates in more states, including New York and Washington, two important regions in which Kraken is not licensed to operate.

The number of cryptocurrencies supported also varies between the two as Coinbase leads with more than fifty assets at 155 while Kraken supports about 105. Users, however, can access some of the leading crypto assets on either platform except for Ripple’s XRP, which, despite being among the leading digital assets by market capitalization, is not available on Coinbase.

It’s also worth noting that the availability of supported cryptocurrencies depends on the region the user resides in and the product with which the user is interacting. For instance, Kraken’s spot market has the broadest selection of the supported assets, while margin and futures markets have limited digital assets.

Fiat currencies are also available on both Coinbase and Kraken, but Kraken has a broader coverage and hence supports more national currencies, including:

  • 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 kinds of services offered by crypto exchanges will attract different fees, as will the various trading platforms. Here are some of the fees charged by Coinbase:

  • Brokerage services – on the consumer-facing Coinbase.com interface, the exchange charges relatively higher fees than most platforms. Current charges to purchase Bitcoin using the various payment methods supported by the exchange are:
    • U.S. 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
    • Wire Transfer – $10 deposit, $25 withdrawal
    • ACH Transfer – free
  • Trading fees – these fees apply to the professional platform, and they are based on a maker/taker pricing model where the former is charged slightly lower fees compared to the latter. Additionally, the more an investor trades, the lower they will be charged. The current Coinbase Pro trading fee rates are:
Source: Coinbase.com
  • Credit transactions – applies to trades involving the Coinbase Borrow feature. Coinbase charges a 2% fee for liquidating collateral to pay off a cash loan to a borrower.
  • Coinbase Card – the exchange will charge a 2.49% fee on card purchases for all cryptocurrencies except for USD Coin (USDC), whose transactions are free.
  • Staking Services – Coinbase charges a 25% commission on all rewards due from the six coins it supports on its staking service.

Note: For more information regarding fees on the exchange, please read our in-depth Coinbase Fees Explained guide


Kraken charges lower fees than Coinbase in almost every comparable service. Here are some of these fees highlighted:

  • Instant Buy – this is the same as the Coinbase Brokerage service, and the fees charged by Kraken to instantly buy and sell crypto include:
    • Kraken fee – 0.9% for stablecoins trades and 1.5% for other digital assets and FX pairs.
    • Credit/Debit cards3.75% + $/€0.25 on top of the Kraken fee specified above.
    • Digital Wallet – Kraken charges 3.75% + $/€0.25 per transaction.
    • Online Banking/ACH0.5% on top of the Kraken fee specified above.
  • Pro trading – these fees only apply to the spot market, and they are as shown in the figure below. In every transaction tier, Kraken charges marginally lower than Coinbase Pro.
Source: Kraken.com
  • Margin and Futures trading – Kraken charges a variable margin position open fee of either 0.01% or 0.02% for all supported coins and a 0.02% rollover fee every 4 hours. Pro trading fees also apply to opening and closing margin positions.

For futures market trades, Kraken employs a maker/taker pricing model to determine applicable fees. Here’s a breakdown of the different pricing tiers involved in Futures trades.

Source: Kraken.com
  • Staking services – Kraken does not charge a uniform commission rate across all staking coins but comparing it against Coinbase shows that it does remit higher rewards to its users, meaning it consistently takes a lower cut. Here’s 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 against 4.63% APY on Coinbase;
    • Cosmos (ATOM) – 7% on Kraken vs. 5% APY on Coinbase.

Kraken exchange charges lower fees across the board in comparable services such as trading, staking, and instant purchases.

Note: For additional information on the fees charged by Kraken, please see our comprehensive Kraken Fees Explained guide.


Coinbase vs. Kraken: Safety, and Security

Both Kraken and Coinbase have existed for a decade or so, thanks partly to their security practices. Crypto 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, about 6,000 Coinbase users fell victim to an elaborate phishing attack whose success was also made possible by utilizing a vulnerability within the exchange’s multi-factor authentication process. The attack happened between April and May 2021, and Coinbase did not reveal further details or how much the customers lost.

We have reviewed the security measures taken by both Coinbase (read here) and Kraken (read here) in separate articles, but here’s a brief rundown of how both platforms approach the safety and security of their systems and their assets.

Coinbase security measures

  • Cold storage – the exchange reportedly stores up to 98% of its customer’s crypto assets offline in safe deposit boxes 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 similarly to the private wallet keys, this data is also distributed geographically in safe deposit boxes and vaults worldwide.
  • Website security – all Coinbase and affiliated websites employ safe security standards such as using encrypted secure socket layer (SSL) – HTTPS – to keep website traffic private.
  • Wallet security – Coinbase’s independent self-custody wallet enables its users to set up safe passwords and use biometrics to authorize transactions. The wallet also prompts users to store their backup seed phrases safely.
  • Insurance – the exchange has insured all US-based customers’ USD balances with the FDIC to the tune of $250,000. 

To prevent internally-instigated attacks, Coinbase has taken extra measures when recruiting employees, such as performing stringent background checks and limiting access to resources to a bare minimum for each employee necessary to perform their tasks. The employees are also mandated to encrypt their hard drives, use strong passwords, enable screen locking and utilize 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 using SMS, 2FA authenticator applications, and automated phone calls;
  • Possibility to use hardware keys to log in for extra security.

Note: Further information on KYC and how to complete the setup is provided in our How Long Does Coinbase Verification Take article.

Kraken security measures

  • Cold storage – Kraken reportedly stores as much as 95% of its customers’ cryptocurrency assets in offline, air-gapped, geographically distributed cold storage.
  • Information security – the exchange ensures that all sensitive information on the customers and the security systems is encrypted at rest, with restrictive access to its location.
  • Platform security – Kraken reports that it maintains its servers instead of using cloud services, and all its server locations are under tight round-the-clock surveillance.
  • Penetration testing – the company maintains robust security auditing practices to ensure that systems are running 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 using MaskerKeys, Global Settings Lock (GSL), and 2-factor authentication through apps and hardware keys;
  • Use of PGP to enable private email communication between the customers and the exchange;
  • Watermarking documents to ensure that they are unusable if the platform experiences a security breach;
  • Use of artificial intelligence to provide real-time monitoring for suspicious activity;
  • Websites use SSL encryption to safeguard online traffic:
  • Second-factor authorization for asset withdrawals using SMS and email.

Both platforms use these and many more security measures, which, according to history, have proven very effective in protecting their systems and keeping customers’ funds secure.

Coinbase vs. Kraken: User Experience

Both Coinbase and Kraken are designed for simplicity with consideration for crypto beginners. However, Coinbase is much more intuitive to use, and this user experience carries over to all 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 does sacrifice some aspects of its beginner-friendliness. Even with this focus, the exchange manages to offer a more seamless user interface than most other platforms.

There are three apps 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’s ideal for new crypto 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-custody crypto wallet with storage features for cryptocurrencies and non-fungible tokens in addition to being able to browse decentralized applications.

Coinbase vs. Kraken: Pros and Cons

Coinbase Pros

  • Offers an intuitive beginner-friendly interface 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;
  • It offers more features than Kraken;
  • It’s publicly traded on the NASDAQ exchange making its financials easy to verify;
  • Supports more digital assets with regular additions ongoing;
  • Coinbase caters to a broader audience, including the retail, commercial and institutional clientele.

Coinbase Cons

  • Does not offer margin nor Futures trading;
  • It’s available in fewer countries than Kraken;
  • Its complete product suite is not available to all users;
  • It charges considerably higher fees on its consumer platform;
  • Its staking service only supports a limited number of coins.

Kraken Pros

  • Kraken has maintained a flawless security record in its decade of existence;
  • It’s highly regulated and available in a majority of US states;
  • It is accessible in more countries than Coinbase;
  • The exchange offers a comprehensive suite of trading tools ideal for pro investors;
  • Supports a wider selection of fiat currencies and funding options;
  • Its charges lower transaction fees and staking commissions than Coinbase.

Kraken Cons

  • It offers fewer products and services to its users than Coinbase;
  • Kraken supports fewer cryptocurrencies for trading;
  • The Kraken interface is not as intuitive to use as Coinbase, making it less ideal for beginners.

Final thoughts

There is a lot of commonality between Coinbase and Kraken. For one, they are both based in San Francisco and were founded around the same time. They adhere to financial restrictions in all the markets they operate in, and both strive to fulfill their customers’ needs.

However, even with the several similarities, the two exchanges operate differently, which helps them attract varying clients. Coinbase tends to attract users who value a user-friendly interface, while Kraken caters more toward the professional investor who values the availability of tools and options more.

Whichever camp you may wish to identify with or gravitate towards, you will be well covered in these crypto 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 more than 100 countries. They enable their customers to buy, sell, exchange, and trade their digital assets with Coinbase providing an external wallet for self-custody as well.

Are Coinbase and Kraken safe exchanges?

Yes, they are. Both Coinbase and Kraken adhere to strict security standards to ensure that their systems and assets are safe. They employ security measures such as cold storage, encrypting data, routing web traffic using SSL (HTTPS) as well as providing their users with necessary tools to help safeguard their accounts.

What are funding options supported by Coinbase and Kraken?

Between the two exchanges, users can deposit fiat currencies through 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 are also able to send cryptocurrencies from external wallets to either platform.

Which one is better: Coinbase or Kraken?

They are both good crypto trading platforms with benefits and drawbacks. Whether one is better than another will come down to personal preference and user needs.

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Justinas Baltrusaitis
Author

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.

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