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GDAX

GDAX Review
Trader's rating 1
Editor's rating 4

Trading Accounts

 

Account type Minimum deposit Leverage Maker Fee Taker Fee
Standard Undisclosed 1:3 0% Up to 0.25%

 

GDAX, which stands for Global Digital Asset Exchange, is a company owned by Coinbase. While some of you may know Coinbase for the ability to purchase Bitcoin directly by Credit Card, GDAX is the other part of the company – the exchange aimed at traders. Trading fees at GDAX are much lower and margin trading is available.

 

The company, security of funds

 

Company Country Regulation
Coinbase USA NY BitLicense

 

As mentioned above GDAX is actually a part of San Francisco – based Coinbase. The company holds the New York BitLicnese, which is by its nature an interesting piece of legislation. The New York Department of Financial Services (NYDFS) attempted to make the city a major Bitcoin trading center, the same way it hosts the world’s largest stock exchange. One may argue the idea backfired, as a lot of the key players backed-out of the 2015 proposal. This is due to the burdensome and slow regulatory procedure. As of the summer of 2017 only three companies have received the license and Coinbase is one of them.

 

When it comes to hacking, a major attack has not struck GDAX or Coinbase. That being the case, there was a “flash crash” in Ethereum prices, which raises suspicion. The coin was trading at around $317, when it suddenly spiked to an alleged value of 10 cents and quickly retraced. The company proceeded to halt trading and later claimed this was merely a “fat finger” - single large trader accidentally placed a market sell order, which triggered a chain of stop-loss orders to be executed. Here is а live video, shot by a trader, who has connected a MetaTrader4 platform to his GDAX account (the interesting thing happens around 2:50):

 

 

The public’s concerns, of course, come from the fact GDAX offers margin trading. The company could have manipulated the price, in order to wipe-out traders who were long. All of this is purely speculation.

 

 

Other than this case, the user reviews for GDAX generally match the ones for Coinbase. One of the major concerns of the fans of decentralization in the cryptoverse, is the fact a lot of the investors behind the project are well-established in the traditional financial sector.

 

Trading conditions

 

Trading instruments (cryptocurrencies)

Only three crypto currencies are available at GDAX, namelyBitcoin, Ethereum and Litecoin. Trading is done against USD and EUR, with BTC/GBP also being available, alongside the crypto-crosses ETH/BTC and LTC/BTC.

 

Minimum initial deposit

There is no information on the minimum initial deposit at GDAX, which is not that unusual in the crypto currency sphere. On the other hand, most forex brokers have such a level and disclose it on their websites. For instance the FCA-regulated industry pioneers at IG (who also offer some coins as CFDs) proudly announce they do not have a minimum – you can open an account for as low as you want.

 

Leverage

Margin trading is available on GDAX, with a maximum leverage ratio of 1:3. While this may sound like nothing in comparison to the 1:500, which a lot of forex brokers offer, keep in mind such high levels only apply for fiat currencies, which rarely have price movements bigger than 1-2% per day. 

 

When it comes to crypto, the aforementioned broker IG offers 1:13 in leverage (a 7.5% margin requirement). For a full comparison between crypto-exchanges and forex brokers, who offer Bitcoin trading, read this article.

 

Fees

The costs of trading at GDAX are a lot lower than the ones available at Coinbase. When trading on the exchange, market “makers” (the people who place passive orders and wait for other traders to trigger them) do not pay a fee. Market “takers” (i.e. the “aggressive” traders who directly buy/sell with a market order) pay fees starting from 0.25% and going down for the bigger traders. Both of these levels (especially the free of charge passive trading) are very competitive.

 

Trading platform

 

The platform provided by GDAX, which is web-based, is a lot better than the one offered at Coinbase. That being said, we find the charting lacking when compared to the charts provided by TradigView (which other exchanges have integrated, as well as MetaTrader4, of course. Only a couple of predetermined moving averages are available, in terms of technical indicators. Here is a preview (click to zoom-in):

 

 

The order book is located at the left and the more bizarre design decision to place the “ask” column on top of the “bids” is made. While this may seem strange to experienced traders it does provide a nice graphical representation for beginners. The tape is located to the left, with the middle ground being taken by the chart (which is nothing special) and the open positions tab. 

 

Methods of payment

 

While Coinbase is obviously the main source of clients (and funds) for GDAX, money can also be sent directly to the exchange. This is a massive convenience tool, as accounts can be funded, without the need of paying the hefty Coinbase fees. That being said, Credit/Debit Card deposits can only be made via Coinbase, while GDAX accepts Bank transfers.

 

Conclusion

 

GDAX is a part of Coinbase and more specifically the part of the company, which is targeting more active traders. The fee structure is very competitive, especially with the free market “maker” trades. The selection of trading assets is not great, but the trading platform feels relatively nice (although charting is nothing special). Here is a summary of GDAX: 

 

Pros Cons
New York BitLicense Few altcoins available
Competitive trading fees Suspicion regarding the ETH spike
No major hacks yet  
Accepts Bank Transfers  
Relatively nice trading platform  

 

Kraken

Kraken Review
Trader's rating 1.4
Editor's rating 4

Account type

 

Account type Minimum deposit Leverage Maker fee Taker fee
Standard Undisclosed 1:5 Max of 0.16% Max of 0.26%

 

Kraken is one of the most popular crypto currency exchanges. It is currently the world’s leader, in terms of Bitcoin to EUR trading volumes. 

 

The company, security of funds

 

Company Country Regulation
Payward, Inc, USA N/A

 

The Kraken exchange is operated by the San Francisco-based Payward Inc. The company is not under direct regulation by any agency, but this is not unusual in the crypto currency space (at least for now). 

 

The company’s overall reputation is pretty solid. It hasn’t experienced any major hacks yet. Furthermore, it was chosen as the platform, through which payments to creditors of ill-fated Mt.Gox received their claims. If you are not familiar with the case,  Mt.Gox was a huge Bitcoin exchange in Japan, which filed for bankruptcy protection in 2014, following a shady turn of events, which are another topic altogether. The company was then under special administration, which chose Kraken as a reliable partner, in order to facilitate payments to creditors.

 

Most of the coins on Kraken are kept in cold storage, with the exception of the ones currently used for trading, of course.

 

User reviews on Kraken are fairly mixed. Complaints vary from slow processing of deposits, lack of response by the customer support to stop-loss orders not triggering. While the latter is concerning the former two may be related to lack of staff, similarly to the issues which Poloniex currently has.

 

Trading conditions

 

Trading instruments (cryptocurrencies)

 

Kraken offers quite a few trading instruments. Although the exchange is most famous for its Bitcoin and Ethereum to cash (EUR and USD) markets, altcoins are also available. Here is a list of all the coins you can trade one way or another: Bitcoin, Ethereum, Litecoin, EOS, Dash, Ripple, Monero, Iconomi, Zcash, Augur, Gnosis, Stellar Limens, Dogecoin, Melon. Kraken plans to add new coins in the future.

 

It is worth mentioning this is one of the rather few exchanges which provides trading Bitcoin against currencies like the CAD and GBP. Although majors in the forex market, these are not often provided at crypto-exchanges. That being said liquidity may be an issue.

 

Minimum initial deposit

 

No minimum deposit level is specified by Kraken. Although this is not unusual in the cryptoverese, forex brokers (some of which allow Bitcoin trading) specify this on their websites. As an example, the industry leaders at IG proudly claim they do not have a minimum deposit requirement.

 

Leverage

 

Leverage is only offered for some of the instruments at the Kraken Exchange. It varies from 1:2 to 1:5. These levels may seem low, if you are used to forex trading, where a lot of brokers offer 1:500 in leverage. That being said, even they provide lower levels for crypto currency trading. For instance, the FCA-regulated industry veterans at HYCM currently offer 1:10 for Bitcoin trading.

 

Kraken charges a fee for leveraged trading. It varies from 0.01% to 0.02%, based on the instrument and is applied every four hours. This is a hassle you will not have if you chose to trade Bitcoin with a forex broker. Do keep in mind there is a huge difference between the services provided by forex brokers and crypto-exchanges. For a full breakdown, read this article

 

Fees

 

Kraken charges different fees for market “makers” and “takers”. At the time of writing of this review, they are 0.16% for the makers and 0.26% for the takers (for the lowest volumes). 

 

For those of you who are unaware of what these terms mean, trading on an exchange is slightly different than, forex trading. If you want to buy a particular instrument, you can do this directly, by getting it from the lowest available ask price (offer). This is an “aggressive” entry, which takes away market liquidity and is connected to a bigger fee (the taker fee). On the other hand, you can place your own bid in the order book, which then has to be triggered by another trader, who would sell his asset to you. In this case, you are providing liquidity to the market and pay a lower fee (the maker fee).

 

Overall, the fees provided by Kraken are in line with offerings by other exchanges.

 

Trading platform

 

When it comes to the trading platform, Kraken provides their own solution for some of the functionality, while relying on TradingView for the charting, similarly to Bitfinex.

 

There is pretty detailed access to the short term market dynamics. The tape, includes a historical bid/ask chart, which can be useful. Here is a preview:

 

 

The depth of the market is also presented in an easy to understand manner. Here is a preview:

 

You can see the book on the right side, with a graphical depiction on the left. 

 

The charts, provided by TradigView are a good tool for technical analysts. They are available via a click of a button next to the instrument list. The chart pops-up as a small external window, which you can later move, resize and so on. You can create an entire layout (even on a separate monitor) of your PC can handle the hardware requirements of modern browsers. Here is a preview:

 

 

Kraken also offers a mobile app, which is currently only available on iOS. Hopefully an Android implementation will come soon.

 

 

Methods of payment

 

Fiat currency payments at Kraken are only done via Bank Transfer. There is a slight advantage, if you have a bank account within the European Economic Area, since the SEPA payment system is supported. Crypto currency deposits are also available, but instant real money options such as Credit Card, PayPal or Neteller are not.

 

Conclusion

 

Kraken is a US-based crypto currency exchange. That being the case, the company operates a lot with Europan customers, as it is the world’s leader in terms of Bitcoin to EUR trading volumes. Kraken is as reputable, as one can get in the cryptoverse, with no major hacks or scandals so far. The trading environment feels good, providing detailed tape-reading potential. Commissions are in-line with the current industry averages. Here are Kraken’s strong and weak sides:

 

Pros Cons
Reputable company, no hacks yet  Credit cards and Paypal not accepted
High Bitcoin to EUR liquidity  Mobile app available only for iOS
Solid charting, by TradingView  Recent negative user reviews
Commissions in line with the industry  
Bank Transfers available  

 

Forex
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