When searching for the right cryptocurrency exchange for your trades, it’s a good idea to look at the exchanges that have been around for a long time, as they’ve developed into trusted institutions that are likely to offer better services at a lower cost to their users. Both Bitfinex and Kraken have been around for nearly as long as cryptocurrency itself has existed, as these two exchanges came to prominence during the opportunity for competition that was created by the collapse of Mt. Gox.
Bitfinex and Kraken Overview
While these Bitfinex and Kraken exchanges have both been around for many years, there are some key differences in how they are structured.
Bitfinex has been accused of operating in a sort of legal gray area, especially when it comes to the closely-associated Tether stable coin product. Kraken, on the other hand, works closely with regulators to make sure they’re following all of the rules in the jurisdictions where they operate, and they’re even pushing the envelope further by turning their company into an actual bank located in Wyoming.
These two methods have different pros and cons with Bitfinex tending to offer slightly more freedom with a more diverse set of cryptocurrencies to buy and less KYC (Know Your Customer) but less security. Kraken on the other hand is considered a rock-solid exchange with some of the best security in the business. You may have to wait a little longer, however, to start trading on Kraken.
Fees
Bitfinex and Kraken both offer rather low trading fees; however, the way fees work on both platforms is not the same.
Bitfinex fees start at 0.10% to 0.20% for traders who do less than $500,000 worth of volume per month. This is an extremely low starting rate when compared to all of the other options on the market. Additionally, Bitfinex has even better fee rates available to LEO token users. This is a proprietary token that is associated with the Bitfinex platform. Users of this token can gain access to negative trading fees.
With Kraken, things are a bit less confusing. The platform does not have its proprietary token offering, so everyone is subject to the same fee schedule. Kraken fees will depend on a variety of factors, including the trading pair and the amount of volume the user has traded over the previous 30 days. In general, Kraken trading fees are only a tad bit higher than what’s found on Bitfinex, with maker fees starting at 0.16% and taker fees starting at 0.26%.
If you’re concerned about trading fees more than anything else, then you should take a closer look at the specific fee schedules offered by both platforms to see which will be the better offer for your typical amount of monthly trading volume.
Features
Kraken and Bitfinex both have a tremendous number of additional features outside of offering cryptocurrency trading engines. While both of these platforms are focused on trading as their main bread and butter, they also offer advanced features that help them stick out from the rest of the pack.
At Bitfinex, they’re always working with the latest advancements in blockchain technology to offer the best possible products and services to their users. For example, the company behind Bitfinex has also been working on several different decentralized exchange opportunities, as they believe this is where the industry will move over time. Bitfinex has also been an early adopter of Bitcoin’s Lightning Network, which allows users to move their bitcoin around in a much faster, cheaper manner than what is possible with on-chain transactions, while also maintaining a sufficient level of decentralization. Bitfinex also has its token, LEO, which can be used to get access to additional benefits on the Bitfinex trading platform.
Kraken also has several unique offerings for its users. If you visit their homepage, you’ll notice that they have an entire section dedicated to cryptocurrency education. The team behind Kraken believes there is a need for cryptocurrency traders to be informed, which is why they create cryptocurrency guides, webinars, podcasts, and several other types of content completely for free for their users and anyone else who wants to learn. Getting more specific to financial services offerings, Kraken also offers staking, margin trading, OTC trading, and much more on their platform. Cryptowatch is also an interesting project owned by Kraken, and it’s essentially a single dashboard that can be used for trading at a variety of cryptocurrency exchanges.
Speed
You aren’t going to run into any trading latency issues when using Bitfinex or Kraken. Both of these exchanges have been around for multiple bitcoin bull runs, which means they have plenty of experience when it comes to dealing with a massive influx of new users as the price is going wild. In terms of deposits and withdrawals, there aren’t many differences to look at either. Although, it should be mentioned that Bitfinex has had serious banking issues in the past. Due to the perception that they are operating in a legal gray area, they have faced troubles in the past in terms of how people can get money onto the platform. This is why the platform is also closely related to the Tether stablecoin. Kraken operates with a bit more legal clarity, which makes things a bit easier when it comes to interacting with the traditional financial system.
Security
When compared side by side in terms of security, Kraken has to be the preferred exchange over Bitfinex. Kraken is operating as one of the oldest cryptocurrency exchanges in existence, and yet, the platform has never faced a serious security incident. They have never even had to bail out their users due to some sort of minor incident. They also operate with a bit more regulatory clarity, which makes the exchange more secure in other ways (namely that there is fewer risk regulators will show up one day and tell them to shut it all down).
Bitfinex has faced some serious security incidents in the past, and its preference for operating outside of the U.S. financial system has also led to some issues. That said, the major hack that the exchange faced did not lead to any loss of user funds. Those users were eventually made whole. Of course, the fact that the exchange was hacked cannot be overlooked and is a factor to consider when comparing Bitfinex to Kraken. Bitfinex’s unique approach to banking also led to hundreds of millions of dollars worth of customer funds getting tied up with an illegal financial operation in the United States. However, that situation did not lead to the loss of user funds either.
Currencies
Bitfinex is one of those exchanges that like to list as many coins as possible. Although there aren’t as many trading pairs as there are on Binance, there is a good chance that any coin you’re interested in will be tradeable on Bitfinex.
For Kraken, there is a bit more due diligence that takes place before they decide to list a new coin or token. Kraken was one of the main exchanges that decided to remove the Bitcoin SV altcoin from their platform due to the close relationship that the cryptocurrency network has with a certain individual who has claimed to be Bitcoin creator Satoshi Nakamoto without offering much in terms of real proof. That said, all of the most popular altcoins can be found on Kraken. You’ll only need to opt for Bitfinex if you’re interested in some niche offerings.
Trading Power
Kraken and Bitfinex both offer powerful trading features for traders who can handle them. One of the most popular offerings for cryptocurrency exchanges these days is margin trading, and this is available at both Kraken and Bitfinex. You’ll be able to use a bit more leverage on Kraken than Bitfinex, but the margin trading on Bitfinex allows you to trade against a wider variety of crypto assets.
Both of these platforms have also been adopting various financial cryptocurrency innovations such as staking. That said, if you’re not in the United States, then Bitfinex will likely give you a more powerful trading experience overall.
Ease of Use
Although these platforms have been around for similar periods, Kraken gets a bit of an edge when it comes to simplicity and ease of use. As mentioned previously, there is a section of the Kraken website that will allow you to learn more about the various cryptocurrencies you intend to trade before you get started, and the exchange platform also operates with a few different interfaces based on your level of familiarity with trading more generally. If you’re a complete newcomer to the Bitcoin space, then Kraken has simple trading interfaces that will look more like a traditional brokerage rather than an advanced trading platform.
For more comparisons see: