Kraken vs. Coinbase: Which Crypto Exchange Is Right for You?

Kraken and Coinbase are both in the top 10 crypto exchanges by trading volume, and each has a lot to offer cryptocurrency investors. In our full Kraken vs. Coinbase comparison, we look at security, fees, available cryptos, and more.

Coinbase vs. Kraken: At a glance

Kraken comes out very slightly ahead of Coinbase in terms of fees, even though they are pretty similar. This is partly because its trading fees are lower, and also because its fee structure is transparent and clearly displayed. If you're new to crypto investing, the quicker you can get used to the advanced platforms, the less you'll pay in crypto trading fees. It costs much less to use the pro platforms (Kraken Pro and Advanced Trade), particularly if you can deposit money fee-free. In the interest of a fair comparison, we've put the pro and basic options side by side.

Kraken Instant Buy vs. Coinbase

Kraken's Instant Buy feature has a lot in common with Coinbase's entry level exchange. Both platforms make it very easy to buy or sell crypto, particularly for new crypto investors. To buy Bitcoin (BTC) worth $100 on either platform, it would cost at least $1.50 in fees, more on Coinbase.

• Kraken charges 1.5% to buy or sell crypto, and 0.9% for stablecoins. There may be additional fees, depending on what payment method you use.
• Coinbase charges between $0.99 and $2.99 on purchases or sales below $205, plus a variable spread. It charges 1.5% plus the spread on larger transactions. There may be additional fees, depending on your payment method, such as using PayPal or a debit card.

READ MORE: Full Kraken review

Kraken Pro vs. Coinbase Advanced Trade

Both advanced platforms charge a tiered maker/taker fee that gets reduced for investors with higher trading volumes.

• The highest maker/taker fees on Kraken Pro are 0.26% / 0.16% for low volume traders. On the other extreme, this fee is reduced to 0.00% / 0.10% for investors who trade more than $10 million a month.
• The highest maker/taker fees on Coinbase Advanced Trade are 0.60% / 0.40% for low volume traders. This fee is reduced to 0.05% / 0.00% for the top level investors who trade $500 million a month.

READ MORE: Full Coinbase review

When checking fees on cryptocurrency exchanges, think about how you plan to use the platform -- particularly how you want to deposit money, how often you will buy and sell, and how you might withdraw your funds. Both platforms offer free ways to deposit money. Depending on which country you are in, it is mostly free to deposit money to both Kraken and Coinbase via bank transfer. However, the cost of using your debit card can add up. There's a fee of 3.75% + 0.25c for debit card payments on Kraken, while Coinbase charges up to 3.99% for debit card purchases.

If you want to buy major cryptos like Bitcoin, Ethereum (ETH), or Cardano (ADA), you'll find them on both Coinbase and Kraken. Both list almost all the top 20 cryptos by market cap, along with many smaller coins and tokens. Both platforms have a decent range of smart contract cryptos, gaming and metaverse tokens, decentralized finance cryptos, and other types of crypto.

In terms of numbers, Coinbase has the edge with over 210 cryptos, the majority of which are available to U.S. investors. There are almost 200 cryptos listed on Kraken. However, about 40 of them aren't available to U.S. investors. A number of Coinbase cryptos aren't available to New York residents, but since Kraken doesn't work at all in New York or Washington state, Coinbase is still ahead here. On that note, Coinbase is not available in Hawaii.

Crypto wallets are important to crypto investors who want to store their assets in a secure place that they control. The fear is that if you leave crypto on the exchange where you bought it, you could suffer if the exchange gets hacked or your account gets frozen. Coinbase and Kraken take different approaches to external wallets:

• Kraken actively encourages customers to use third party wallet providers, but doesn't have its own wallet.
• Coinbase has its own hot wallet that even serves non-Coinbase customers. The crypto exchange also works with other wallet providers.

The popular Coinbase Wallet holds any ERC-20 token -- digital currencies built on the Ethereum network -- as well as Bitcoin, Bitcoin Cash (BCH), Litecoin (LTC), Ripple (XRP), Stellar Lumens (XLM), and Dogecoin (DOGE). Coins aren't the only crypto asset you can store in the Coinbase wallet -- it also supports non-fungible tokens (NFTs).

Kraken says clearly on its site that it is an exchange, not a wallet service. You can't move crypto from one Kraken account to another, and it encourages people to see it as a place to trade crypto but not somewhere to store it. You can withdraw funds from a Kraken account to a third-party wallet, and the exchange actively reviews hardware wallets to help its users find the best options. "We provide clients the ability to deposit funds to our corporate wallet for safekeeping while the funds are being exchanged or used for trading or staking, but we do not provide a personal wallet service," it says.

Security is an important consideration for every crypto trader. There've been enough high-profile crypto exchange hacks to make us all aware of the need for top-notch protection. This is why it's good that both Coinbase and Kraken take security seriously. Here are some key areas that stand out:

• Cold storage. Both platforms keep the majority of assets offline in cold storage, making it harder for hackers to access. Kraken also says its servers are in secure cages protected by armed guards.
• Bug bounty. Both exchanges participate in bug bounty programs that reward ethical hackers for finding flaws in the system.
• User-level protection. Both platforms offer a range of user protections, such as multi-factor authentication and extra withdrawal protection.
• Insurance. This is where the two platforms differ. Kraken's insistence that it is an exchange rather than a place to store your assets means it doesn't have third-party insurance. In contrast, Coinbase says it will do its best to replace losses from a covered event, and has insurance against crime, including theft and security breaches.

Crypto exchanges don't have the same protections as, say, a bank account. In the event of bank failure, FDIC insurance kicks in up for up to $250,000 per eligible account. This doesn't apply to cryptocurrency. However, U.S. dollars (not crypto) held by U.S. residents on Coinbase do qualify for FDIC insurance.

Kraken and Coinbase are both popular and well-established digital currency trading platforms. In truth, there's not much to distinguish between them as both have similar fee structures, plenty of educational resources for new investors, and similar ranges of available cryptocurrencies. The best way to decide which exchange is right for you is to consider how you will use it. For example, think about whether you want to keep your assets on the exchange or in your own wallet, and how often you plan to trade. That way you can weigh the costs and sign up with the trading platform that offers the services you need.

Kraken comes out slightly ahead in terms of fees. It has more coins available for staking at higher rates than Coinbase. Staking is tying up your crypto for a set amount of time to earn rewards. Kraken has more coins available for staking, and the interest rates are higher. However, it doesn't encourage investors to leave their assets on the exchange, and doesn't have its own wallet capabilities.

Coinbase stands out for its user-friendly interface, and is a popular choice for new crypto investors. It has a few more available cryptos and more ways to deposit money. Plus, traders who aren't ready to invest in a hardware wallet will appreciate the Coinbase Wallet functionality. If neither Kraken or Coinbase is quite what you want, check out our list of top cryptocurrency apps and exchanges for more options.

RELATED: Check out The Ascent's guide to the best NFT wallets.