Cryptocurrencies are becoming increasingly popular as Bitcoin and other cryptos become popular in the mainstream.
For those hoping to buy and sell digital currencies, one of the easiest ways to make these transactions is to use a cryptocurrency exchange. Similar to a stock exchange, a cryptocurrency exchange is a place where you can trade your regular fiat currency (like U.S. dollars) for crypto coins, and vice versa. Typically you can also directly trade one type of cryptocurrency for another.
But how do you know which crypto exchange is the right one for you? Let’s compare three popular exchanges — Kraken vs. Coinbase vs. Gemini — so you can learn more about these services and make the smartest choice for you and your financial goals.
Kraken vs. Coinbase vs. Gemini
If you’re interested in investing money in cryptocurrencies, you can set up an account with an exchange to get started. Three of the more well-known cryptocurrency exchange platforms are Kraken, Coinbase, and Gemini.
Each of these exchanges offers access to trading with the major cryptocurrencies, as well as different alternative coins, but they also have different features and trading fees. Here’s a quick look at how Kraken vs. Coinbase vs. Gemini compare:
|Mobile app||Android, iOS||Android, iOS||Android, iOS|
|Buy/deposit methods||Debit card, credit card, bank transfer||Bank transfer, debit card, PayPal||Bank transfer|
|Sell/withdrawal methods||Send to digital wallet; withdraw to bank account||Send to digital wallet; withdraw to bank account||Send to digital wallet; withdraw to bank account|
|Order types||Market, limit, stop||Market, limit, stop||Market, limit, stop|
|FDIC insured||No||Yes, for U.S. dollar amounts||Yes, for U.S. dollar amounts|
|Best for...||Low fees||Ease of trading||Managing and using digital assets|
|Visit Kraken||Visit Coinbase||Visit Gemini|
How does Kraken work?
Kraken was founded in 2011 and is headquartered in San Francisco, California. This exchange is geared for more advanced cryptocurrency traders. The platform offers a variety of order types and access to more than 50 coins and fiat currency pairs. Access to margin accounts is one of the unique features, as well as over-the-counter services for those with larger positions.
Kraken charges a 0.9% fee when purchasing stablecoins, which are cryptocurrencies tied to other assets, like the U.S. dollar or gold. For other cryptocurrency purchases, there is a fee of 1.5%. However, there is also an additional online banking processing fee of 0.5% when you make your purchase.
It’s important to note that, though it’s possible to use a credit card or debit card to fund a Kraken purchase, only euro-denominated cards are accepted. USD transactions need to be fueled by bank purchases such as ACH or wire transfer.
Kraken works to be as secure as possible, keeping most deposits in various cold storage (not permanently connected to the internet) facilities in various locations. Additionally, Kraken employs encryption and surveillance to keep information and the platform as secure as possible.
How does Coinbase work?
Coinbase was founded in 2012 and is headquartered in San Francisco, California. Additionally, Coinbase recently went public, with shares of the company available on the NASDAQ. Coinbase is aimed at more mainstream traders and is heavily weighted toward those interested in Bitcoin and Ethereum. It’s intuitive to use, but the fees are a little higher than some other exchanges.
Coinbase fees are charged as the greater of a tiered flat fee or variable fees. For example, you can expect to pay at least 1.49% of the transaction with your bank account or wallet, or 3.99% with a debit card buy. Flat fees can range from 99 cents to $2.99, depending on the amount.
Coinbase claims that 98% of the deposits are stored offline, even though you can use wallet services from Coinbase. The exchange uses two-factor authentication and encryption best practices designed to help keep your account secure.
Coinbase also offers a more advanced platform known as Coinbase Pro, but we’re not including that service in this particular comparison. You can check out our Coinbase vs. Coinbase Pro comparison for more information.
How does Gemini work?
Gemini was founded in 2014 and is based in New York City, New York. Gemini, although an exchange, also offers a way to manage your digital assets. It’s possible to earn a yield on your stored digital assets and the company is slated to launch a credit card with crypto rewards this year. Plus, it’s even possible to use Gemini Pay, which allows you to pay with crypto assets at tens of thousands of retail locations in the U.S.
Gemini has fewer coins available on its exchange than Kraken or Coinbase, and fees are closer to what Coinbase charges. Gemini has a flat fee of 99 cents to $2.99, depending on the transaction size, and then charges a 1.49% fee on transactions above $200.
As with other exchanges, Gemini makes use of cold storage for assets, in order to protect them. Two-factor authentication, encryption, and certifications are all part of Gemini’s security protocols to protect accounts.
What all three cryptocurrency exchanges excel at
All three exchanges offer access to major cryptocurrencies like Bitcoin and Ethereum. Additionally, all three have a high level of security and are relatively easy to use. With all these platforms it’s possible to place market, limit, and stop orders. It’s also relatively easy for cryptocurrency beginners to get started buying, selling, and storing with any of these platforms.
3 important differences between Kraken vs. Coinbase vs. Gemini
When comparing Kraken vs. Coinbase vs. Gemini, it’s important to understand some of the key differences. For the most part, the smartest choice for your crypto trading depends on your needs and preferences.
1. Trading volume
Coinbase is the largest U.S. cryptocurrency exchange, with a trading volume of nearly $1.5 billion as of July 16, 2021. On top of that, the exchange claims that it trades about $335 billion in a quarter. Kraken has a trading volume of nearly $960 million. Gemini has the smallest trading volume, at around $119 million.
This isn’t surprising, as Gemini has the smallest number of available coins. Kraken has the most coins available.
2. Available altcoins
If you’re more interested in altcoins, Kraken has the most available. Additionally, Kraken is the only of the exchanges that offers access to Monero. There are other altcoins you can get on Kraken that aren’t available with Coinbase or Gemini.
Coinbase is known for offering various forks. Forks are splits in a currency that create two different blockchains. For example, Bitcoin Cash is a fork of Bitcoin. At the time of writing, both Bitcoin Cash and Bitcoin are offered on all three exchanges. Depending on what you’re most interested in, Kraken vs. Coinbase vs. Gemini might be better for certain coins.
3. Financial transactions
If you’re interested in using crypto assets in more traditional financial transaction settings, Gemini is likely to provide you with the best approach. You can earn an annual percentage yield on your crypto assets with Gemini, similar to how you would earn a yield on a savings account. Your APY is based on the coin you hold in deposit, as well as the amount of it.
Gemini also provides you with a way to use your crypto assets to pay at retailers and is planning to launch a credit card with crypto rewards. Coinbase is launching a Visa debit card, however, which will allow you to swipe and access your crypto balance to pay for purchases.
Which cryptocurrency exchange should you choose?
When choosing between Kraken vs. Coinbase vs. Gemini, it’s important to consider your personal needs and preferences. Some of the considerations include:
- Available coins: Depending on the cryptocurrencies you’re interested in, one exchange might be better than another. If you’re interested in something like Monero, or some other altcoin, Kraken is likely to provide what you’re looking for. On the other hand, if you’re more interested in popular cryptocurrencies, Coinbase or Gemini would be fine.
- Ease of use: It’s also a good idea to consider ease of use and choose an exchange that is intuitive and simple for you to understand. Coinbase is one of the easiest platforms to use, as it’s designed to look similar to a stock trading platform. However, Kraken and Gemini are also relatively easy to learn how to use. Look for a platform that allows you to trade the way you want.
- Trading features: Consider how often you plan to trade. If you’re an advanced trader, and know you’ll have a high volume, Kraken can be a good choice, as it’s designed to handle frequent trades. On top of that, if you want access to margin, Kraken is likely to be a good choice.
- Fees: Realize that exchanges might have different fee schedules or fee structures, including a mixture of flat fees and percentages. Additionally, the fees might be different depending on the type of coin you’re trading, the amount of your transaction, and other factors. Finally, lower fees might not always outweigh better coin availability or other features.
- Other perks: Consider what else you might want from your exchange. Wallet services are fairly common, but are you also looking for a way to earn a return on your deposits? If you hold coins at Gemini, you can earn a fairly competitive APY. Additionally, Gemini has a way for you to use your crypto assets as a payment method at retailers, and Coinbase is supposed to launch a debit card soon.
Think about the types of transactions you’re interested in and how you plan to trade. Realize, too, that you could open multiple accounts. For example, most of my crypto assets (Bitcoin, Ethereum, and Litecoin) are with Coinbase, but I also have a Kraken account for my Monero and to trade other new altcoins as an experiment.
Is Kraken or Gemini better?
Whether Kraken or Gemini is better depends on your preferences and needs. Kraken can be better for frequent traders who want access to margin. Additionally, Kraken has a longer list of altcoins than Gemini.
On the other hand, Gemini offers the chance for you to store crypto assets and earn interest, as well as provide you with a way to pay for daily purchases using crypto assets. If you’re interested in holding cryptocurrencies for the long term, and using them as a base for financial transactions using crypto assets, then Gemini could be a better fit.
Is Kraken better than Coinbase?
Depending on your needs, Kraken or Coinbase might better serve your needs. Kraken offers access to more altcoins than Coinbase. However, Coinbase can be more intuitive to use. Additionally, Kraken offers a wider variety of order types, as well as access to margin. Coinbase could be a good place for the occasional trader, whereas Kraken might be better suited for the frequent trader.
Why does Gemini need my SSN?
Gemini requires your Social Security number in order to comply with U.S. law. It’s important to note that Gemini isn’t the only exchange that requires this for identification purposes. Kraken requires your Social Security number if you’re a U.S. customer, as does Coinbase.
Has Coinbase ever been hacked?
Coinbase claims that it has never been hacked, though some user accounts have been taken over in the past. Similarly, Gemini has not been hacked, though user accounts might have been compromised. Kraken has been the target of hackers in the past, but the exchange as a whole wasn’t compromised, though some individual accounts might have been accessed. This all points to why using property security measures as a user is important.
Many people are interested in learning how to buy cryptocurrency and specifically how to buy Bitcoin. They're also learning how to navigate a bitcoin exchange. Cryptocurrency trading is an interesting new way to attempt to put your money to work for you. It’s relatively easy to buy, sell, and store cryptocurrencies using an exchange. When choosing between Kraken vs. Coinbase vs. Gemini, carefully consider your needs and situation.
Before trading cryptocurrencies at all, though, it’s important to understand that you could potentially lose money, as crypto assets are relatively new and can be volatile. Additionally, crypto assets aren’t covered by FDIC insurance or SIPC insurance. So make sure you limit your exposure to cryptocurrencies and only risk money you can afford to lose.
Disclosure: The author has positions in Bitcoin, Litecoin, Dogecoin, Monero, and Ethereum, which are mentioned in this review.
Disclaimer: All rates and fees accurate as of July 16, 2021.