Coinbase vs Kraken
Coinbase and Kraken are two of the most commonly recommended options for buying cryptocurrencies. In this Coinbase vs Kraken comparison, we’ll show you the key differences between both options, so that you can choose the right one for you.
Coinbase vs Kraken: Key Information
Coinbase, The Beginner Friendly Option
When looking at the key information table above, you probably noticed Coinbase is listed as beginner friendly, while Kraken is not. Though both sites allow users to buy Bitcoin, Ethereum, and other cryptocurrencies, they provide this service in different ways.
Kraken operates as a cryptocurrency exchange. Users are able to trade currency pairs with each other, similar to a forex or stock exchange. This leaves more room for human error, than Coinbase does, especially for user with no previous trading experience.
Assuming you’re wanting to trade with fiat currency (USD, EUR, Etc.), it will most likely take you longer to purchase your cryptocurrency on Kraken. In order to buy cryptocurrency with fiat on Kraken, you must complete the following steps:
- Verify your account.
- Deposit fiat currency through bank transfer.
- Wait for your deposit to hit your account, which usually take 1–5 business days.
- Trade your fiat currency for cryptocurrency.
As you’ll see below, Coinbase allows you to lock in your price more quickly.
Coinbase aims to simplify buying cryptocurrency by removing many of the negative aspects found at exchanges. They also allow users to buy cryptocurrency with both bank transfers and credit/debit cards. Below we’ll show you what the Coinbase buying process is like for each payment method.
Credit/Debit Card Purchases:
- Verify your account & Credit Card.
- Instantly buy Bitcoin, Ethereum, or Litecoin at the set price.
NOTE: Coinbase credit card and bank transfer purchasing limits vary by user. Credit card limits are determined by account age, buying history, and verification status. If you’re hoping to purchase larger amounts, bank transfer purchases are a great option, as you can immediately have access to higher limits after verification.
Bank Transfer Purchases:
- Verify your account.
- Buy Bitcoin, Ethereum, or Litecoin at the set price.
- You will receive the agreed upon amount of cryptocurrency, that you purchased, after a few days of processing time.
When using a credit or debit card, it’s easy to see the benefits of Coinbase. Not only will you be able to use an often-preferred payment method, but you’ll also receive your cryptocurrency instantly.
Users can also benefit when using a bank transfer, if they’re looking to lock in a price as soon as possible. Unlike on Kraken, Coinbase allows you to lock in your purchase price, before your bank transfer is processed. This can be useful if you’re expecting prices to rise quickly. Do note that you cannot transfer cryptocurrency from your account, while your bank transfer is being processed.
Regardless of which payment method you use, the price and fees will be clearly shown at the time of your purchase. The price is based off exchange rates, insuring a fair price. Coinbase does charge fees for their service, which you can see in the “Fees” section below.
Unfortunately, good customer support is currently hard to come by in the cryptocurrency industry. Recent price gains have brought a huge wave of new investors and most cryptocurrency sites have struggled to keep up with customer support.
Coinbase offers customer support through email. While not flawless, Coinbase seems to respond to customer support issues in a reasonable time frame. In our personal experience, Coinbase has responded within 24–48 hours for support tickets. This is mostly echoed across online forums, although 24–72 hours may be a more accurate overall mark.
Kraken has typically been known for having good customer service, although there appears to be a lot of new recent complaints. Around online forums, users have said they’re struggling to get new accounts verified, as well as being unable to get ahold of customer support in a reasonable time frame.
Both Companies Are Trusted by the Community
Both companies are currently based out of San Francisco, California. As U.S. based companies, whose customers include U.S. residents, both sites are fully committed to complying with all U.S. laws and regulations.
Safe and Secure
With millions of dollars being held on these sites, security of funds is one of their users’ top concerns. Both Kraken and Coinbase adhere to industry best practices for storing both cryptocurrency and fiat currency funds.
- Company and user funds are segregated, meaning user funds aren’t used for company operational purposes.
- The vast majority of Cryptocurrency funds are stored in secure offline cold storage wallets. This protects these funds from a potential hack or other security breach.
- Both sites offer a variety of methods to secure your personal accounts, including 2-Factor Authentication.
Coinbase takes it a step further. Cryptocurrency funds held online are insured by a syndicate of Lloyd’s of London and U.S. customer’s USD wallet balances are covered up to $250,000 by FDIC insurance.
However, if your personal account is directly compromised, due to you improperly securing it, neither site will be held responsible for any lost funds.
If saving on fees is your primary concern, Kraken comes out ahead in this comparison. That being said, you should keep in mind these two companies offer different services and payment methods.
Kraken’s trading fees are generally below .36%. Trading fees vary by currency pair and can be viewed here. Additional fees may be charged when depositing or withdrawing from your account. See the image below for more information.
Coinbase understandably has higher fees, when you consider:
- They provide additional services that Kraken does not.
- They accept credit/debit cards, which naturally carry higher fees. This is due to the fees charged by credit card companies and the risks for fraudulent charge backs.
On Coinbase, bank transfer purchases typically carry 1.49% fees, while credit/debit card purchases carry 3.99% fees. See the image below for more details.
If you’re hoping to purchase a variety of altcoins, Kraken is likely the better option for you.
Coinbase only offers users the ability to buy and sell Bitcoin, Ethereum, and Litecoin. While they’ve stated plans to add more cryptocurrencies in the future, it seems likely they’ll only add a few of the most popular cryptocurrencies.
Kraken allows users to trade the following cryptocurrencies:
- Ethereum Classic
- Stellar Lumens
Coinbase vs Kraken: Final Thoughts
In the battle of Coinbase vs Kraken, there’s no clear winner. Ultimately, it comes down to personal preference, since both sites are good options for buying cryptocurrencies.
If simplicity and time are concerns of yours, Coinbase is the better option for you. It’s also the only option of the two that accepts credit and debit cards.
If super low fees and a large number of available cryptocurrencies are important to you, then Kraken is a better option. It is worth noting, their support may be having issues keeping up with the spike in new customers.