Kraken Crypto: A Beginner's Guide To Investing

Kraken is a US-based cryptocurrency exchange that allows people to buy, sell, and trade Bitcoin, Ethereum, and 200+ other digital assets. It is one of the oldest and best cryptocurrency exchanges, offering an intuitive interface with straightforward trading solutions. Kraken has everything you need to buy, sell, and trade crypto, including an easy-to-use interface, quick funding options, and a wide range of digital currencies. In this article, we will discuss how to invest in Kraken crypto, including the different ways to invest, the benefits and drawbacks of the platform, and the steps to getting started.

How to create a Kraken account

To create a Kraken account, you must first visit the official Kraken website, kraken.com.

Once on the site, you will need to locate the 'Sign in' button in the upper right corner and click 'Create one'. On the next page, you will be required to enter your email address, choose a username, and create a strong password. It is important to note that the username cannot be changed later.

After filling out the required fields, you will need to read the Terms of Service and Privacy Policy carefully. If you agree with the terms, tick the box and then click the 'Create Account' button. An activation email will be sent to the email address you provided. If you do not receive this email, there are troubleshooting steps available on the Kraken website that you can follow.

The activation email will contain an activation key, which you will need to enter on the account activation form. Alternatively, you can complete the activation by clicking the link in the email. After this, you will be prompted to confirm your password and, in some cases, complete a captcha. Finally, click the 'Activate Account' button, and your Kraken account will be successfully created and ready to use.

Funding your Kraken account

To fund your Kraken account, you must first sign in to your Kraken account. If you don't have an account, you can create one on the Kraken website. Once you've signed in, navigate to the Deposit page by clicking on the Transfer tab on the left-hand side of the page. Here, you will be able to choose from a variety of funding options, including depositing digital assets, buying them instantly with a card, or funding your account with traditional currencies.

If you choose to deposit a digital currency, you will need to search for the crypto you wish to deposit and click on it. If it is your first time depositing, you will need to generate a new deposit address. Be sure to carefully read the deposit requirements and warnings provided for each currency. Some cryptocurrencies can be sent via multiple networks, so ensure you are using a supported network to avoid losing funds. Once you have initiated a valid transaction from your wallet, the deposit will be credited to your account once the minimum number of required confirmations has been reached.

If you are depositing a traditional currency, you will need to search for the currency you wish to deposit and select your preferred funding provider. For USD, EUR, and GBP deposits, you will have the option to fund directly or manually. Review the deposit instructions and important notes, and consider using the deposit checklist to ensure a smooth transaction. To prevent errors, copy the bank account details provided by Kraken and provide them directly to your bank or financial institution.

Additionally, certain deposit methods may trigger a temporary withdrawal hold on your account for security purposes. For example, first-time ACH purchases, debit or credit card purchases, or digital wallet purchases will result in a 72-hour withdrawal hold. It is important to review the specific requirements and restrictions for your chosen deposit method.

Kraken's security features

Kraken is considered a secure and trustworthy cryptocurrency exchange. It has never been hacked and has a comprehensive range of safety measures in place. Here are some of the key security features that Kraken offers:

• Industry-leading security protocols: Kraken employs a team of top security professionals who take a risk-based approach to protect clients' assets. They have decades of experience in building security programs and technology for well-known brands.
• Safe Coin and NFT Storage: Kraken stores 95% of all deposits in offline, air-gapped, geographically distributed cold wallets. This ensures that users can always withdraw their funds on demand.
• Server Security: The servers are located in secure cages under constant surveillance by armed guards and video monitors. Physical access and code deployment are strictly controlled and reviewed before any changes are implemented.
• Information Security: All sensitive account information is encrypted at rest at both the system and data levels. Access is strictly controlled and monitored to prevent unauthorized access.
• Two-Factor Authentication (2FA): Kraken supports the use of 2FA through Google Authenticator and Yubikey to add an extra layer of security to user accounts.
• Email Security: Kraken utilizes PGP/GPG encryption for emails to protect the confidentiality of user information. User verification documents are uploaded to an isolated, highly secure system, and sensitive data is encrypted and can only be accessed through multiple security systems.
• Global Settings Lock: This feature prevents unauthorized changes to user account information, such as withdrawal addresses. It can also be used to lock the account when not in use, providing an additional layer of security.
• Bug Bounty Program: Kraken actively identifies and addresses vulnerabilities in its systems by conducting bug bounty programs. They encourage security researchers to find and report vulnerabilities to improve the overall security posture.
• Regulatory Compliance: Kraken complies with regulations and legal requirements in all jurisdictions in which it operates. It is registered as a Money Services Business (MSB) in various countries and is subject to regulatory oversight.

Kraken's trading options

Kraken is an online exchange that allows people to buy, sell and trade Bitcoin and altcoins with others on the exchange. It provides a way for people to ride the market's ups and downs, day trade, or hold longer-term investments as they please. Kraken offers a high level of flexibility for spot exchanging currency (with or without the use of margin).

Kraken is also a privately-held company, so investing in the company itself can be tricky and involves more than just buying stock from Wall Street. In the United States, investing in privately-held companies is heavily regulated by the Securities and Exchange Commission (SEC). There are similar agencies worldwide that regulate these investments in their jurisdictions.

Making these investments involves meeting several criteria. The criteria differ in every country, but the United States defines an accredited investor as someone with a net worth of at least $1,000,000, an income of at least $200,000 for the past two years ($300,000 combined if married), and is expected to make the same in the current year. As an accredited investor, you can purchase stock in a variety of privately-held companies, but Kraken has not opened its company up to accredited investors.

There are secondary markets like SharesPost, where accredited investors, company founders, and others who own stock in a company can list their shares for sale. These secondary markets allow people who normally wouldn't have access to these shares an opportunity to purchase them. However, there are very high fees for purchasing stock on a secondary market, and these secondary markets are dealing with exempt securities, which aren't as heavily regulated by the SEC.

Kraken has partnered with Bnk to the Future to create a limited opportunity for both large and small investors to own shares of Kraken stock. The minimum investment is $1,000.

Kraken's staking options

Kraken provides various methods to generate returns on cash and crypto holdings, allowing users to earn rewards on assets that might otherwise be sitting unused in their Kraken account.

Kraken offers On-chain staking, which utilises blockchain Proof-of-Stake protocol to generate rewards through a process typically called "staking". The benefits of On-chain staking on Kraken versus staking on other platforms include:

• Instantly start earning rewards with no waiting or bonding periods.
• One of the highest returns in the industry.
• Stake your assets in just three clicks from your Kraken balances.
• Instant un-staking when using Flexible terms.

The staking process on Kraken Classic is as follows:

• Sign in and navigate to Earn at the top of the page.
• Click on Stake and then select the asset you would like to stake.
• Input the amount of the asset that you would like to stake and select Stake. Some assets will offer both a Bonded term and a Flexible term.
• Your funds are now initiated for staking, and you will see this entry under Transactions.
• A few minutes later, your transaction will be marked as a Success, meaning your funds are now staked.

Kraken also offers staking via its API, which provides several endpoints that allow users to interact with the earn product, including retrieving a list of earn strategies, listing all current allocations, and allocating and deallocating funds.

Frequently asked questions