Cryptocurrency exchanges let you trade different coins, either as a way to invest over time to turn a profit or to turn them into a currency that you can use. Two of the most common exchanges used by crypto enthusiasts are Kraken and Poloniex.
Picking one exchange when comparing Kraken vs Poloniex can be hard. Keep reading for a breakdown of the pros and cons of either exchange.
Kraken vs Poloniex
Kraken and Poloniex are relatively similar crypto exchanges, but they fulfill different functions for traders. Of course, you are not limited to either of these options. There are a ton of exchanges available, and you should compare the feature sets of a few to find exactly what you are looking for.
For example, more and more people are deciding to begin Trading Cryptocurrency on Binance. Binance is another exchange that improves upon the features of both sites, while still being very accessible and easy to use.
Poloniex
Poloniex is one of the largest cryptocurrency exchanges and has over 50 coins available to trade.
Poloniex's fees start at 0.25 percent per transaction. However, if you move more than 20 million dollars through the exchange, you would enjoy a zero percent fee.
Poloniex has an active and dedicated community that posts quite a bit of information through its live community chat. This can be a good way to pick up info and learn about other cryptocurrencies, but of course, it should always be taken with a grain of salt.
Poloniex does not deal with fiat currency. This means that there's no way to convert your coins into your bank account balance. It's a great way to trade crypto, but it isn't a great investment platform since you'll have to move funds to another exchange to get your money in your bank account.
Kraken
Kraken, like most other exchanges, has the usual suite of features allowing you to trade cryptocurrency and fiat currency pairs. It supports USD, CAD, and Euro deposits and withdrawals.
One of Kraken's defining features is the fact that it lets you trade on margin. This lets you borrow up to $500,000 to invest (or short) specific cryptocurrencies.
Kraken's fees are comparable to Poloniex's, with a 0.26 percent fee on all transactions, though if you trade more than $50,000 a month that fee will progressively drop.
Of course, always remember that trading on margin means that there is higher risk. You are responsible for paying back any money that you lose, so avoid leveraging a position you know you can't pay back.
However, Kraken does not have a mobile app, which may be a downside for traders who aren't always glued to their desks.
The Right Cryptocurrency Exchange Depends on your Needs
Because their fees are so similar, the only reason you would use Kraken vs. Poloniex or vice versa is because of your trading goals. Kraken is the way to go to convert cryptocurrency into fiat currency, while Poloniex offers a massive range of different cryptocurrency pairs. Of course, you don't have to use either - other exchanges like Binance offer a wide range of coins and access to fiat currencies.
Want more information about making money in the crypto space? Check out the Cryptocurrency and Bitcoin sections of the Frugal Finance blog for more insight!
