Understanding the Kraken Cryptocurrency Exchange
Kraken is a cryptocurrency exchanged based in San Fransisco on which you can use fiat currency and trade many types of cryptocurrency.
Considering it is one of the oldest popular crypto exchanges, is a U.S. based exchange that accepts fiat currency (like the U.S. dollar), generally follows regulatory guidelines, allows you to long and short with moderate leverage, AND allows you to trade a number of different coins it is generally a good choice for new U.S.-based investors.
TIP: Kraken can’t operate in every state in the United States. This means that in some states Kraken isn’t an option (this is generally true for many above board exchanges due to some state-based regulations). If you live in Washington State or New York, or another state with strict rules, Coinbase/GDAX is generally your best bet. However, this is subject to change.
How to Trade Cryptocurrency on Kraken
To trade cryptocurrency on Kraken:
- Sign up for Kraken (consider using two factor authentication or adding a PIN in the advanced options for an extra layer of protection). This includes an email verification step.
- Get Verified. After signing up you need to supply at least your Full name, Date of birth, Country of residence, and Phone number to trade cryptocurrency for cryptocurrency. To trade fiat for cryptocurrency (like USD for Bitcoin) you need to provide all of the above and address verification. Verification can take a while, so keep in mind you won’t be ready to trade right away.
- Trade. Trading involves picking what you want to trade from the drop down menu (for example Ethereum ETC for Bitcoin XBT), then going to the trade screen and placing buy and sell orders. Novices should set limit orders only, as generally markets are volatile (making market orders risky).
TIP: You can fund your account with fiat currency, or you can fund it with another cryptocurrency wallet to send Bitcoin to a Kraken wallet contained in your account. Learn more.
WARNING: Exchanges have inherent risks. They can get go down for a while, they can get shut down, they can get hacked, the owners can go rogue. It isn’t common, but problems like that aren’t unheard of. Realize you are taking that risk and try not to leave all your funds on an exchange (especially those you aren’t actively trading). Kraken is one of the top exchanges, thus the risk is low, but this general warning should be noted with any exchange.