Both Kraken and Robinhood are cryptocurrency exchanges that deal in digital currencies. And both are some of the best crypto exchanges in their respective niches. Although they have a lot in common, each is unique in terms of its target clientele. It is this uniqueness that differentiates them. In this article, I will tell you all you need to know about Kraken vs Robinhood.
We are going to compare and contrast the two based on the following criteria:
- Operational parameters
- Platform features
- Products and services offered
- Similarities and differences
- Pros and cons
- Account types, opening procedure, and requirements
The following operational parameters can help us learn about each of these two giants:
1. Niche focus
Kraken operates as a general cryptocurrency exchange platform.
In contrast, Robinhood is a brokerage firm that deals in both crypto assets and conventional financial assets including stock trading.
Kraken has been ranked as the best cryptocurrency exchange in Europe. It is among the best in the world in terms of security since it has never encountered any successful security breaches. You can also find all major cryptos listed on the platform.
For security purposes, Kraken holds 95% of digital assets on its platform in an offline cold storage facility and supports various types of cold wallets. This makes it a good crypto platform for risk-averse investors.
What I like about Kraken is that it allows you to customize your security level. For example, you can set a buffer for the number of days it will take to move your crypto off the platform and you can set different codes on your authenticator app depending on what you want to authorize. So a separate code for logging in and a separate one to execute transactions.
While Kraken is available in many countries across the world, Robinhood is only available in the United States. Thus, those who are based outside the United States cannot enjoy its services.
4. Trade volume
Kraken’s trade volume as of the time of writing this article is $260 billion while Robinhood’s trade volume is $2 billion. Thus, Kraken is a hundred times bigger than Robinhood despite Robinhood also offering traditional financial products such as stocks.
The Kraken exchange has a much higher number of active traders compared to Robinhood. This makes Kraken have a higher level of liquidity compared to Robinhood.
5. Supported cryptos
Currently, Robinhood supports only 15 major cryptocurrencies – after delisting Solana’s SOL, Cardano’s ADA, and Polygon’s MATIC.
On the other hand, Kraken supports over 220 different types of crypto – a hundred-plus times more than the number supported by Robinhood. Thus, you are more likely to find your preferred trade cryptocurrency on Kraken (including Shiba Inu, Bitcoin Cash, and most tokens found on the Ethereum blockchain) than on Robinhood.
6. Supported fiat currencies
Robinhood only supports the US dollar.
On the other hand, depending on the jurisdiction, Kraken supports six major fiat currencies:
- US dollar (USD)
- Euro (EUR)
- British Pounds (GBP)
- Canadian Dollars (CAD)
- Australian Dollar (AUD)
- Japanese Yen (JPY)
- and Swiss Franc (CHF)
Thus, you are more likely to exchange your fiat for cryptos or cryptos for fiat on Kraken in your preferred local fiat currency than on Robinhood.
7. Transaction fees
Robinhood has a zero-percent-commission-fee policy.
This means you are not charged any commission for trading on the Robinhood platform. Robinhood makes money from market makers instead.
On the other hand, Kraken charges both a marker fee and a taker fee which collectively results in higher fees for trading on the platform.
As a result, Robinhood has a much smaller number of transaction fees compared to Kraken.
Due to this, Robinhood users encounter low trading fees compared to Kraken users. This makes Robinhood a better option for less advanced users on a shoestring budget who are seeking low trading costs.
Furthermore, unlike Kraken’s graduated fee structure, Robinhood employs a flat fee structure on most of its charges.
Key platform features
While these platforms have some common features, each platform has unique features that make one stand out from the other. The following are each platform’s main features:
1. Kraken platform features
Key features are:
- A simple Buy/Sell cryptocurrencies interface
- Advanced portfolio tracking tools
- Sophisticated asset protection features
- Access to 210+ crypto assets
- Credit card and debit card purchase facility
2. Robinhood platform features
Key features are:
- IRA accounts.
- High-Yield Savings Account (HYSA).
- Robinhood Cash card.
- Traditional financial trading: ETFs, Stocks, etc.
- Mobile apps – both Android and iOS.
- Stock screener.
- ETF screener.
- Fractional Dividend Re-investment plan.
- Portfolio analysis tools.
- Robinhood Instant – this allows you to immediately access up to $1000 of your deposit for trades without waiting for the normal 5-day waiting period. For Robinhood Gold Account, you have instant access to up to $50,000 of your deposit.
Products and services offered
While both platforms have some similar products and services, each platform has unique products and services that the other one doesn’t have. The following are some of the major products and services offered by each platform:
1. Kraken products and services
The following are the main types of products and services provided by the Kraken exchange platform:
- Crypto offerings
- Margin trading
- Spot trading
- Futures trading
2. Robinhood products and services
The major products and services provided by Robinhood Financial LLC via its trading platform are:
- Margin trading
- Options trading
- Exchange-Traded Funds (ETFs)
- Conventional financial products
- Typical financial services offered by online brokers including stocks, ETFs, and options
- Crypto offerings
- Order flow trading
Similarities and differences
The following are the major similarities and differences between the Kraken Exchange platform and the Robinhood Financial LLC trading platform:
The main similarities include:
- Both Kraken and Robinhood are centralized exchanges
- Both trade in crypto assets
- Both have margin accounts
- Both offer limited phone support as part of their customer service.
The main differences include:
- Kraken is for crypto assets only while Robinhood is for a wide range of digital assets including non-cryptos.
- Robinhood is an online brokerage exchange while Kraken is an open trading platform.
- Robinhood provides more conventional financial services focused on a wide array of digital assets while Kraken provides less conventional financial services that are primarily focused on crypto assets.
- Kraken requires you to use its custodial crypto wallet for trades while Robinhood allows you to use a self-custody crypto wallet.
Pros and Cons
The followings are the pros and cons of Kraken vs Robinhood:
Kraken exchange has the following pros:
- Supports 220 cryptocurrencies, including the most popular coins thus making it a better choice for crypto-focused traders.
- Provides advanced trading features – including stop-loss orders and futures trading
- Strong security measures which make it safer than other crypto platforms
- Sophisticated feature-rich mobile app – the Kraken Pro
- Six different fiat currency funding options and fiat payment methods
- It has the benefits of a centralized exchange, including robust security measures such as KYC, AML, and Two-Factor authentication security requirements that protect platform users
- The most secure trading platform in the crypto world
- A user-friendly interface that makes it easy for new investors to quickly get started
- In-depth data analytics tools that make it easy for advanced platform users to make informed crypto investing strategies
- Option to short cryptocurrencies
- Allows you to trade some cryptos on leverage
- A high number of active crypto traders boosts the platform’s liquidity
- Kraken’s editorial team provides wide, deep, and extremely detailed editorial content that is helpful to both new investors and advanced investors.
Robinhood has the following pros:
- Commission-free trades
- No minimum deposit requirements
- No withdrawal fees
- Fractional share investing
- Boasts an elaborate customer support
- Provides all-around digital assets and financial services that any financial institution would want.
- Low fees on the overall
- Allows both crypto trades and non-crypto trades
- Third-party insurance to protect crypto users against hacking
Kraken has the following cons:
- Very high exchange commission of up to 0.26%
- Very high withdrawal fees of up to $35
- Many customers complaints about the lack of satisfactory customer support
- Lacks the benefits of a decentralized exchange such as No-KYC requirements and anonymous trading
- A complex fee structure that can be confusing to new investors
- Focused only on crypto trades
- Users’ assets are not covered by the Federal Deposit Insurance Corporation (FDIC)
Robinhood has the following cons:
- Only available in the US.
- Very few cryptocurrencies to trade in.
- User-data breach – selling user data to third-party sites.
- Limited support for fiat currencies – only the USD is supported.
- Limited and basic data analysis tools.
- Only one fiat currency funding option.
- No leverage trading.
- No option to short a crypto (i.e. bet on its price dropping). For more on this check out How to Short Crypto on Robinhood
- Less elaborate data analytics tools make it harder for Robinhood users, especially advanced traders, to make informed crypto investing strategies
- No debit card or credit card deposit facility.
- Robinhood’s editorial content is not rich. Compared to Kraken, it is relatively shallow and scanty. It lacks the kind of specificity required for new investors and the depth required for advanced investors.
- Compared to other online brokerage firms, Robinhood lacks many features including futures trading, fixed income, foreign exchange, and mutual funds, among others.
Account types, opening procedures, and requirements
Both Kraken Exchange and Robinhood Financial LLC require you to open an account with them to facilitate your trading and investment transactions. However, each has different account types, opening procedures, and requirements.
1. Kraken account types, opening procedures, and requirements
Kraken account types
The two major account types that you can open on Kraken exchange are:
(i) Kraken Pro
- A good option for advanced traders
- Lower fees compared to the Instant Buy account
- Sophisticated data analytics
(ii) Instant Buy
- This is a beginner-friendly account.
- Ease of use due to simple mobile app and user-friendly interface
- A popular choice for new crypto investors
- It charges a 1.5% commission on all trading pairs and 0.9% on stablecoins. An extra 0.5% processing fee when funding using an online bank account.
Kraken account opening procedure
The following are the steps you need to take to open a Kraken account:
- Tap on the Create Account button
- On the Sign-Up form, enter the required personal details including username, password, and email address
- Get the activation key in your email box. Use the key to activate your account
- Confirm your password
- Start using your account
2. Robinhood account types, opening procedures, and requirements
Whether you want to trade in Robinhood crypto or other financial products or services, you need to open a Robinhood account. To do this you need to know the different account types, account opening procedures, and other requirements.
Robinhood account types
The following are the main Robinhood account types that are available to Robinhood users:
(i) Robinhood Cash Account
This is an account used by Robinhood users to carry out cash transactions such as buying or selling securities.
(ii) Robinhood Margin Account
This account is specifically tailored to cater to the needs of margin traders.
(iii) Robinhood Gold Account
Unlike the other accounts listed above, Robin Gold Account is more about a set of tools specifically tailored for advanced investors than a conventional account. One of its core features is advanced data analytics that enables advanced investors to make crucial investment decisions. When it comes to tools, this account has some of the best options that any financial institution that deals in a large volume of trades would go for.
Robinhood account opening procedure
You need to take the following steps to open a Robinhood account:
- Apply using the Robinhood App
- Wait for email confirmation of successful application or request for further details. In case you get a request for verification of identity, you will have to submit relevant documents and wait for up to 7 days review period
- Upon successful confirmation, your account is opened
Final Verdict: my Personal Opinion
If you are just getting started in crypto and want to manage both your crypto and your traditional financial products from one place then use Robinhood. This allows you to have more clarity in what you have invested. People who start in crypto usually invest in Bitcoin, Ethereum, or if they are younger, Dogecoin. In addition, Robinhood now offers iPhone user custodial wallets which means that you are in control of your crypto. Android wallets will launch soon.
If, however, you plan on investing in a wider range of cryptocurrencies and aim to take crypto more seriously then I recommend you use Kraken. Kraken has
- A wider range of options to trade: you can short crypto and leverage trade (both of which will lead you to lose money if you are inexperienced).
- A reputation for being secure
- A much wider range of cryptocurrencies.
In my experience, once you get the crypto bug you are going to end up with more than one exchange and platform. If hesitant start with a broker like Robinhood but eventually, I guarantee you will end up on a crypto exchange and Kraken is a pretty decent choice.
Are you interested in buying some Dogecoin on Kraken but don’t know where to start? Don’t worry, we’ve got your back! In this article, we’ll guide you through the entire process step-by-step, from understanding what Dogecoin and Kraken are to buying your first batch of DOGE. Let’s get started! Read more. Read more.
In this article, I will guide you through the step-by-step process of buying Dogecoin on Robinhood. I will tell you all the questions Robinhood will ask you throughout the process and what you need to do. I will also tell you all the dimensions you need to think of before buying Dogecoin on Robinhood. Read more.