Kraken Fees vs Coinbase Pro: A Comparative Analysis
In the world of cryptocurrency trading, choosing a platform can significantly impact your overall cost and profitability. Two leading platforms are Kraken and Coinbase Pro, each offering unique features and fee structures. This article compares Kraken fees versus those at Coinbase Pro to help traders understand which might be more suitable for their needs.
Understanding the Basics: Kraken vs Coinbase Pro
Kraken is a European-based exchange that has been operating since 2011, offering a wide range of cryptocurrencies and serving both professional traders and casual investors. On the other hand, Coinbase Pro (formerly known as GDAX) is owned by Coinbase, one of the largest cryptocurrency exchanges globally. It is designed for advanced users, with lower fees compared to the parent company but still accessible to retail investors.
Trading Fees: Kraken vs Coinbase Pro
Taker Fees
Kraken's taker fee ranges from 0.26% to 0.16% depending on the trading volume, with a 0% fee tier for users who trade over €180 million worth of cryptocurrencies per month in Bitcoin and Ethereum. Coinbase Pro offers a flat 0.00395% taker fee or less, which is significantly lower than Kraken's maximum rate but remains competitive.
Maker Fees
While Kraken does not have a traditional maker-taker model with fixed fees for both types of trades, it charges 0.16% in fees on maker orders and 0.26% on taker orders. Coinbase Pro also follows this model, but its fees are much more favorable. Maker fees start at 0.00395% or less, while takers pay 0.00395%.
Frequent Trader Fees
Kraken offers a "frequent trader" fee of 0.16% for users trading over €18 million per month in Bitcoin and Ethereum. Coinbase Pro does not have this tier, but its low fees make it attractive for frequent traders regardless.
Specialty Market Maker Fees
Kraken offers lower maker and taker fees (both 0.25%) on a small selection of markets designed specifically for market makers who contribute liquidity to the platform. Coinbase Pro does not have such specific market maker incentives, but its low trading fees are generally attractive enough for those interested in arbitrage opportunities or large-scale market movements.
Other Fees and Expenses
In addition to trading fees, both platforms also charge withdrawal and deposit fees, which can vary depending on the cryptocurrency involved. Kraken's fee ranges from 0% to 1% of the transaction value, while Coinbase Pro charges a flat rate of $0.99 for all US dollar withdrawals and no additional fees on other cryptocurrencies.
Trading Fees vs Efficiency
Kraken is known for its high trading volume and liquidity, which can lead to tighter spreads between buy and sell orders. However, this does not necessarily equate to lower overall costs since the trading fees are relatively high in comparison to Coinbase Pro's flat rate approach. For traders who execute large volumes or seek to arbitrage across multiple platforms, Kraken's fee structure might be more cost-effective; however, for frequent retail investors and casual traders, Coinbase Pro's low fees make it a compelling choice.
Conclusion
When comparing Kraken fees vs Coinbase Pro, the latter emerges as offering more competitive trading fees without sacrificing much in terms of liquidity or security. However, Kraken remains an excellent option for advanced users looking to execute large volumes or take advantage of its "frequent trader" fee tier. Ultimately, the choice between the two platforms should be based on a trader's specific needs, including their trading volume and strategy.
Investors considering Kraken or Coinbase Pro should also consider additional fees such as withdrawal and deposit costs, as well as other platform features like customer support, mobile app functionality, and more. Despite these considerations, the core comparison centers around the simplicity and lower cost of trading on Coinbase Pro compared to Kraken's variable fee structure designed for higher volume traders.