Kraken is one of the world’s oldest and best-known cryptocurrency exchanges and has built upon its reputation for both security and as a leader in bitcoin to euro trading volume.
Founded by Jesse Powell in July 2011, the exchange offers 47 market pairs with seven base currencies ranging from the US dollar to the British Pound.
Kraken is also one of the few cryptocurrency exchanges to offer both margin lending with up to 5x leverage on trades and futures trading to US-based customer. At this time, international users can partake in margin lending but do not have the ability to participate in the futures market.
Now, let’s dive into how you can facilitate a trade on Kraken in a step-by-step process.
Signing up
On the Kraken landing page, in the top right corner, you will find the “create account” link tab which will request some general information including your email address and a desired password.
Enter your details and await the confirmation link to be sent to you.
Note: A confirmation email should arrive within 1-5 minutes, but if it doesn’t, check your junk mail folder.
Upon successful login, you should be taken to an overview of your account, with information relating to your trade balance, position size and more.
In the top left corner along the navigation bar, you will see 3 options including Overview (see below), Prices and Support, ensure you are on the Overview tab.
Kraken’s platform is fairly intuitive and easy to navigate, providing you with a variety of tools to get you started on your crypto journey, but first, you need to ensure your hard earned funds are secured.
Along the top you will see a list of options ranging from ‘overview’ through to ‘trades’, here you will find the tab labelled ‘security’.
Security
On the security page, you will notice a ‘two-factor authentication’ (2-FA) on/off switch, slide it on and click on “authenticator app”, go through the process and save your progress when you’re done.
Note: You can find Google’s fully supported authenticator app here, that will allow you to scan the barcode using the application on your smartphone.
Next, we want to enable a master key so that if you ever lose your password or 2-FA you can still access your account through your master key.
Navigate to where it says master key and slide it on, complete the same process as what you did with your 2-FA by scanning the barcode, it should save in your app as ‘Kraken master’.
Finally, you want to enable what’s known as a ‘Global Settings Lock’ (GSL), an additional security feature that helps protect against phishing attacks.
A yellow banner should be displaying itself every time you’ve been clicking on security, advising you to update your global settings lock, so go ahead and update it, it’s worth it.
When you’ve completed the setup for GSL slide it off as we will need to increase the level of access on your account and that requires changes to be made to your verification with GSL turned off.
Use the master key that you set up by entering the code from ‘Kraken Master’ in Google’s authenticator.
Once you’ve switched GSL off, head over to ‘get verified’ located along the same line as the settings tab.
Kraken also features a tiered list that provides traders with greater freedoms the higher up the tiers they ascend, however, you will require more official documentation the higher you go.
At the bottom of the page, you will be asked to enter some additional information including your full name, date of birth and mobile number.
The entire process should be instantaneous, with the added benefit of being able to trade right away.
ID verification
Find the “Get verified” tab along the top then choose from the list of 3 following options with each subsequent option requiring more complex verification processes along the way.
For simplicity, we chose the “Starter” option due to its low requirements and account limits that suited our needs.
Most traders will choose between “Starter” and “Intermediate” due to the low barriers of entry and manageable requirements.
“Pro” speaks for itself and is the preferred option for institutional traders or large investment funds.
Head over to the ‘funding’ tab along the same line as ‘security’ and ‘get verified’.
You will be asked to accept acknowledgment that Kraken cannot be held responsible for the loss of funds.
Once you’ve accepted, choose the coin you intend to send to your wallet from the list of supported cryptocurrencies located on the left side of the page. In our case, we selected bitcoin (XBT) and then clicked “generate new address”.
A deposit ID will then be generated and you can use this address to send funds to it (from another wallet or exchange).
Note: You must verify your account to at least tier 2 in order to trade, deposit or withdraw fiat currencies on the Kraken exchange, so be sure to check out the requirements here.
You can trade between all currencies, but account funding is limited to digital currencies only for anything below tier 2.
Placing a trade
Under ‘trade’ and then the ‘new order’ tab you will be able to conduct a trade buying at spot price or setting a limit order.
Spot or market orders simply refer to a quick and easy process by attempting to purchase the asset at its best price and fulfilling the order as soon as its executed.
A limit order refers to a triggered event that only buys or sells the asset when it reaches certain conditions such as your target price.
Limit orders are great for those wishing to target a particular entry or exit position.
For the sake of simplicity, we entered 0.00025 BTC (the amount of bitcoin we desired), selected ‘market’ and then clicked ‘buy’.
There you have it, you have successfully purchased crypto on the Kraken exchange.
Withdrawing funds
Kraken allows withdrawals via both cryptocurrency and bank or wire transfer. In order to move forward with this process, the user will need to navigate to the “funding” tab on the main account dashboard and select “withdrawal.”
When either bank or wire transfer is selected, the user will be required to enter both the destination bank or wire account as well as the funds desired to be withdrawn.
It’s important to note, Kraken does have withdrawal amount minimums and processing fees.
As shown in the table below, withdrawal minimums for fiat currencies can range from $20 – $50,000, 5 EU or 50 CAD.
To withdraw cryptocurrency directly, the user can select the desired cryptocurrency from the right-hand side of the page and then enter the destination wallet address and the number of funds to be sent.
Pros and Cons
Pros
- Provides a secure platform and a lower fee structure than Coinbase
- Appeals to both individuals and institutions with features ranging from limit orders to pre-defined trigger trades
- Margin lending and futures trading is available to US customers
Cons
- Kraken has some work to do if it’s to improve its overall user experience, particularly on the trading interface
- Clear lack of extensive customer service options
- New registrations may have to wait for over a week for accounts to be fully verified
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