Coinbase vs Kraken, Which is Better?

With the recent rise in both the price of Bitcoin and Ethereum, many newcomers are looking for a place to buy these cryptocurrencies.  Coinbase and Kraken are two of the most popular options currently used, thus many newcomers are asking the question, “Coinbase vs Kraken, which is better”?  In this comparison, we’ll show you the pros and cons of both options.

Coinbase vs Kraken, Two Very Different Sites

While the question “Coinbase vs Kraken” is often asked, it’s a bit of a weird question, as these two sites offer very different products to their users.

Kraken is a cryptocurrency exchange.  For users to buy cryptocurrency from Kraken, they first have to deposit funds onto the exchange, and then trade with other users on the market.  Cryptocurrency exchanges, like Kraken, function similarly to a forex or stock exchange.

Coinbase, on the other hand, aims to give users the easiest way possible to buy and sell cryptocurrency.  When you buy or sell cryptocurrency with Coinbase, you’re making the transaction directly with the company, rather than with other users.  The price you buy the cryptocurency at, is set when you place your order.  The price is pegged to the GDAX exchange price.  Coinbase then charges additional fees, of around 1.49-4% for their services.

There are pros and cons to both methods of purchasing cryptocurrency, which are detailed in the table and paragraphs below.

Coinbase vs Kraken Key Information

Reviews Coinbase Review Kraken Review Coming Soon!
Site Type Simple Buy and Sell Methods Cryptocurrency Exchange
Beginner Friendly?
Available Cryptocurrencies BTC, ETH, LTC BTC, ETH, LTC, XMR, DASH, XRP, XLM, ETC, REP,

ICN, MLN, ZEC, XDG, USDT, GNO

Company Launch 2012 2011
Trustworthiness Excellent Excellent
Security Excellent Excellent
Company Location San Francisco, CA, USA San Francisco, CA, USA
Customer Support Good Okay
Deposit Methods Credit Card/Debit Card, Bank Transfer Bank Transfer, Cryptocurrency
Withdrawal Methods PayPal, Bank Transfer Bank Transfer, Cryptocurrency
Verification Required? Yes Yes
Fees 1.49-4% Payment Fees for Buy and Sell Orders <.36% trading fees and $0-$60 deposit/withdrawal

fees depending on location and currency

Bonus $10 Worth of Free Bitcoin When Buy $100 or more None
Site Visit Coinbase Visit Kraken

Coinbase is the Beginner Friendly Option

There’s no denying that Coinbase is one of the most beginner friendly methods of buying Bitcoin and Ethereum.  The price and fees when placing an order are clearly set, which keeps users from entering mistaken prices.  The site is also much more intuitive than competitors’ sites, allowing users to buy Bitcoin or Ethereum in just a few steps.

  1. Create a Coinbase account.
  2. Add a Payment Method (Credit/Debit Card or Bank Transfer).
  3. Many users then will need to verify their identity (verification is required on all legitimate sites, where you can purchase cryptocurrency with fiat currency (like USD).  This is necessary to comply with laws and regulations of the United States, as well as some other countries.  Verification is also required on Kraken).
  4. Buy Bitcoin or Ethereum at the established price.

You will receive the amount of cryptocurrency you purchased a few days after your order, at the set rate you bought it at.  This is necessary to prevent fraudulent charges and it takes a similar amount of time, as it would take to have a deposit processed onto an exchange.  Note that during this processing time, you can not transfer this cryptocurrency from your wallet.

Kraken can require slightly more technical knowledge.  Users must deposit funds into their accounts, via bank transfer or cryptocurrencies.  Once the funds have arrived, users then are able to trade for cryptocurrency on the exchange.  Be careful to not mistype the price when placing an order and know that there’s no guarantee your order will get filled by another user.

Keep in mind, that the price of cryptocurrency can change drastically in the time it takes for a deposit to hit an exchange, especially when making a deposit with fiat currency.

 

buy on kraken

Both Sites are Trustworthy and Secure

Both Coinbase and Kraken are trustworthy options, that take security seriously.  Each of these two sites have been around for over 5 years, which is a very long time in the cryptocurrency world.  Over this time, these sites have gained the trust of millions of users.  Both companies are based out of San Francisco, California and they comply with the laws of the United States, to operate as regulated financial service companies.

Kraken and Coinbase both take industry standard security measures to keep cryptocurrency funds safe.  Both sites keep the majority of these funds in secure cold wallet storage.  This shuts down the potential of all funds being stolen in an attack by hackers.  Additionally, both websites use a variety of security features to safeguard the personal information of their users.

These two sites also give users a variety of methods for securing their personal accounts, with both offering 2-factor authentication methods.

Bonus

Coinbase offers users free $10 worth of Bitcoin when they purchase $100 worth of cryptocurrency or more.  Kraken does not offer any bonus.

Customer Support

As mentioned at the start of this post, there’s recently been a rapid increase in demand to buy cryptocurrencies.  This rapid increase in demand, has left companies facilitating the purchase of cryptocurrencies, scrambling to keep up with customer support.

While negative reviews seem to stick out on online forums, there seems to be a very large number of complaints about Kraken support.  All sites and exchanges have had increased time in their support responses recently, but some users are reporting Kraken taking weeks or even over a month.  There’s been some complaints about Coinbase too, but nothing as severe.

During this time of increased demand, you may want to be cautious when using Kraken.

Available Cryptocurrencies

For those of you looking to buy something other than Bitcoin, Ethereum, or Litecoin, you won’t be able to use Coinbase.  Kraken offers far more options, in terms of available cryptocurrencies.

Here’s a full list of cryptocurrencies listed on Kraken.

  • Bitcoin
  • Ethereum
  • Litecoin
  • Monero
  • Dash
  • Ripple
  • Stellar/Lumens
  • Augur Rep Tokens
  • ICONOMI
  • Melon
  • Zcash
  • Dogecoin
  • USD Tether
  • Gnosis

Coinbase has announced plans to continue adding new cryptocurrencies, but it’s unlikely that they’ll ever offer as many options as exchanges.

Deposit and Withdrawal Methods

Unlike Kraken, Coinbase allows users to purchase cryptocurrency with Credit and Debit cards.  For the convenience of using a Credit/Debit card, there are additional fees (shown below)

Both sites offer bank transfer for deposits and withdrawals.  Coinbase also allows users to sell coins in exchange for PayPal, although this comes with higher fees than bank transfer.

Fees

In the battle of Coinbase vs Kraken, Kraken comes ahead in the fees category.

Kraken’s trading fees vary by trade pairing, but are generally below .36%.  Additional fees may be charged when making deposits and withdrawals, as seen the picture below.

Coinbase’s fees are understandably higher for two reasons.

  1. They provide a service that exchanges do not.
  2. Credit card purchases will naturally carry higher fees.  This is due to credit card company fees and the risk of fraudulent charge backs.

That being said, if you’re looking to spend the least on fees, Coinbase is likely not the option for you.  They charge at least 3.99% when you use a credit card and 1.49% for bank transfers.  Below is a picture from their site detailing their fees, see their site for more information.

Coinbase vs Kraken: Final Verdict

Both sites we’ve discussed are great options for buying Ethereum and Bitcoin, although they differ a good amount from each other.

For those of you looking for the easiest method to buy cryptocurrencies, Coinbase is a better option.  It is also the necessary option between the two, if you want to use a credit/debit card.  You can also likely purchase cryptocurrency sooner, after first making your account, by using Coinbase.

If you’re concerned about saving on fees, okay with using bank transfer (or cryptocurrency), and more technically savvy, then Kraken is a good option for you.  Keep in mind, their support may be struggling to keep up with the rapid expansion of the current cryptocurrency market.

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