Kraken vs Gemini: Which Cryptocurrency Exchange Is Better?

Posted on August 30, 2021 in Investing

If you’re looking for the best cryptocurrency exchange, our comparison of Kraken vs Gemini offers an in depth look at two of the easiest and safest places for you to buy and sell bitcoin and crypto. At a high level, Kraken may be preferable for frequent traders who require margin access. Kraken also has a larger selection of altcoins than Gemini. Gemini, on the other hand, allows you to store crypto assets and earn interest while also allowing you to pay for daily purchases with digital assets. We know crypto can be confusing, so read on below for a better understanding of Kraken vs Gemini, including which is better, which has the lowest fees, and what makes the most sense for your personal finance situation.

Cryptocurrencies are a hot topic of financial advice, investment, and trading. Everyone from Elon Musk to the person working next to you has an opinion or experience about this new medium of crypto exchange and how it works.  With all the excitement and dynamism, it’s easy to get lost in the particulars and lose your way.  There are so many decisions to be made when you get involved with cryptocurrency.  Much of the infrastructure is innovative and original, so it’s surprising how much of it is also familiar.  Concerns about security, rates of exchange and inherent worth are as relevant for cryptocurrency as they are for traditional monies.  It’s encouraging to the novice (as well as the veteran!) to find that many questions, which arise, have straightforward answers and solutions. 

Cryptocurrency exchanges are one of the linchpins of the cryptocurrency world.  Enthusiasts who are eager to get into trading and investing will find many of their transactions taking place there.  For those unfamiliar with the exchanges and alternative investment platforms, there are many questions that must be answered.  Are the exchanges safe?  Are they secure?  Can their rules and procedures be trusted?  What is the best crypto exchange out of the many that appear online?  We’ll look at two of the most popular exchanges, Kraken vs Gemini, and give them a head-to-head comparison.  Kraken is a well-known, versatile cryptocurrency exchange; Gemini is equally well known and occasionally adopts some of fiat-currency’s more useful mechanisms. 

What Is Cryptocurrency?

Cryptocurrency is an idea that has been around since the mid 80’s.  It has been called ‘electronic money’ and ‘ecash’.  Different forms of it were used as a medium of exchange between hackers and dark-web users, as well as programmers and businesses, and of course, among gamers.  Today it is commonly understood to be a form of payment for online goods and services that is backed by heavy encryption and security, but which answers to no individual or government.  There are several types of cryptocurrencies.  Some of the most popular are:

  • Bitcoin
  • Bitcoin Cash
  • Ethereum
  • Litecoin
  • Zcash
  • Ripple
  • Monero
  • Dash
  • Tether

As one can see, there are a number of currencies to consider.  Most of the currencies exchange easily with one another and with government-based currencies.  A lot of them have similar encryption and security protocols backing them.  They are all decentralized, in that it is the collective currency holders who determine their worth, rather then a centralized ‘home’ bank or board of governors.  Most cryptocurrencies are validated by blockchains, a continuously updating list of records that verify the history of the currency’s provenance.  Blockchains are monitored by peer-to-peer networks that assure their independent distribution and lack of dependency upon a single entity. 

Related: Can You Pay Bills with Bitcoin?

What Is a Cryptocurrency Exchange like Kraken or Gemini?

A cryptocurrency exchange such as Kraken or Gemini are places where cryptocurrencies can be monitored, evaluated, bought, sold, and traded.  Typically, the various cryptocurrencies may be traded among themselves, at their current rates.  The cryptocurrencies may be bought or traded in exchange for fiat-currencies, such as U.S. Dollars (USD) or Euros.  Not every crypto or bitcoin exchange handle all cryptocurrencies, or all fiat-currencies for that matter.  Some of the popular cryptocurrency exchange sites are:

  • Kraken
  • Gemini
  • Coinbase
  • Binance
  • eToro
  • Coinmama

As we mentioned we will look at the first two cryptocurrency exchanges on this list.  The two sites, Kraken and Gemini, offer similar basic features, along with several contrasting services and options. 

How Do Kraken and Gemini Work?         

Kraken

  • Kraken was formed in 2011 and officially began operations in 2013.  It is based in San Francisco, California, United States.  Its current CEO is also its founder; a man named Jesse Powell.  Kraken handles over fifty different types of cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Dash and Tether.  With a simple verification tier (Tier 1) Kraken allows you to withdraw and deposit digital currency only, after providing your name, date of birth, country, and phone number.  By also providing your valid government ID and proof of residency you can deposit and withdraw bank currency via wire transfer.  Kraken offers sophisticated trading, including best market price and fixed price orders.  Advanced users can include conditional closes, stop limits, expirations, and leverage options.  Kraken’s fees are 0% to 0.16% for a ‘maker’ transaction and 0.10% to 0.26% for a ‘taker’ fee.  Kraken has a daily twenty-five-thousand-dollar deposit limit if you provide proof of funds.  Its withdrawal limit is also twenty-five thousand dollars a day.  Deposits take one to five business days for approval.

Gemini

  • Gemini is located in New York City, New York, United States.  It was founded in 2015.  Its founders are two twins, Cameron and Tyler Winklevoss; hence the company’s name ‘Gemini’.  The exchange handles nearly thirty different types of cryptocurrencies.  Its platform is simple and easy to use.  It gives side by side comparisons with charts and lets you order coins in an auction format.  You can fund your Gemini account with a bank transfer (ACH), wire transfer or cryptocurrency deposits.  You may begin trading before your initial transfer is approved, though you are not allowed to withdraw until your initial account-opening deposit is confirmed.  As your trading volume increases, Gemini decreases your cost per trade.  Your highest rate is 0.25% for a ‘maker’, which decreases to 0.10%.  Takers remain at 0.25% unless your trading volume is at the company’s highest level.  

Both Gemini and Kraken have variable fees determined by users thirty-day trading volume and by the type of transactions the user makes.  Their rates are reasonable in comparison to other sites, which explains some of their popularity. 

What Are the Benefits of Kraken vs Gemini Exchanges?

Kraken

  • Crypto Exchange Regulated in The United States – An added level of security for people concerned with traditional legitimacy. 
  • Several Deposit Methods for Fiat Currency – You can make more choices about how to move money. 
  • More Than Fifty Cryptocurrencies to Buy, Trade and Sell –   All the popular currencies available for you, including USD and Euro. 
  • Competitive Fees – Their prices are rates you can live with, even at high volume.
  • Trading Platform Is Advanced – Savvy traders are given the tools they need.

Gemini

  • Simple To Use – The interface is user-friendly and simple to navigate, allowing beginners to start quickly. 
  • Licensed and regulated by New York State – The platform is regulated and licensed by the New York State Department of Financial Services (NYSDFS). 
  • Accepts Multiple Fiat Deposit Formats – The platform supports fiat deposits in USD, GBP, CAD, EUR, SGD, HKD and AUD. 
  • Allows Interest Earning on Cryptocurrency – Users can earn up to 7.4% APY on their cryptocurrency deposits. 
  • Allows Traders to Set Advanced Auto-Transactions – Gemini allows traders to set recurring orders and price alerts. 

What Are the Cons of Kraken vs Gemini Exchanges?

Kraken

  • Confusing User Interface for Beginners – Kraken may not be the best place for someone new to cryptocurrency to start, though it does provide some useful tools to trading veterans. 

Gemini

  • Isn’t The Best for Trading – Though it offers some nice automatic transaction features, Gemini is not meant for very sophisticated trading.
  • Doesn’t Allow Futures or Margin Trading – Restrictions in basic trading areas limit the platform. 
  • High Trading Fees for Some Transactions – Some trades can go as high as 0.5%.  

FAQ’s About Kraken vs Gemini

Here are six questions that are asked frequently about Kraken and Gemini.

  1. Is Gemini or Kraken Better?  –  Which platform is the best depends upon your needs.  Many users rate Kraken best because of its ability to do complex transactions while maintaining a low-price structure.  Other users rate Gemini better, because it’s easier to use for new traders and other novices.  If you need a solid starting point, Gemini may be your best bet.  If advanced trading is your thing, it may be better to go with Kraken. 
  2. Is Kraken or Gemini Easier to Use?  –  Between the two platforms Gemini is certainly the simplest.  Its user interface has been described as ‘elegant’ and ‘simple’.  It seems designed to be approachable for entry-level traders.  
  3. Why Does Kraken Have Multiple Tiers?  –  Kraken’s three tiers are used to separate level of involvement for the trader.  Users can decide how much personal information they want to give the platform.  Less information gives you fewer transaction options; more information unlocks sophisticated trading and moneymaking options for the customer.  Kraken’s tiers may be designed to let users become more comfortable with the world of cryptocurrency before they give more private access and information. 
  4. Why Does Gemini Want My Social Security Number?  –  Gemini takes this information to comply with United States law.  The platform is based in the United States and offers some banking options that are governed by U.S. Statutes.  They need social security numbers to be in compliance with those regulations. 
  5. How Secure is Kraken vs Gemini?  –  The Initial Coin Offering (ICO) rating for Kraken is number one, with an ‘A’ overall score.  Gemini scored eighty-four on that list.  Though they allow themselves to be more regulated and scrutinized, some rating systems do not give Gemini high marks.  On the other hand, Gemini insures USD deposits with the FDIC.  This guarantees user’s deposits for up to two hundred thousand dollars. 
  6. Which Platform Charges More for Transactions?  –  Both Kraken and Gemini have very reasonable transaction costs.  Kraken does provide much better costs overall than Gemini.  This can make a big difference, especially for large numbers of smaller trades or multiple transactions in general. 

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