eToro vs Kraken

Written by Nick Zelver

Fact checked by Mike Druttman

Updated Mar, 2024

The Kickoff

Embarking on your trading journey requires selecting a platform that not only feels intuitive but also aligns with your investment preferences. If you're considering eToro and Kraken, this guide will help you evaluate which of these platforms best suits your trading needs.

eToro stands out as a social trading app and brokerage, enabling users to trade a variety of financial assets, including CFD trading. It's particularly renowned for its Copy Trade feature, which allows users to learn from and replicate the strategies of experienced traders. The platform offers a diverse range of financial instruments, such as currencies, stocks, currency pairs, forex, commodities, indices, and even cryptocurrencies, providing a comprehensive trading experience.

Kraken, in contrast, is primarily a cryptocurrency exchange. It offers a trading platform for an array of cryptocurrencies, as well as fiat currencies. However, unlike eToro, its focus is solely on cryptocurrency trading.

Comparison

This section provides a concise comparison of eToro and Kraken, incorporating the latest information and updates from both platforms.

Account Types

eToro presents a variety of account types, tailored to meet the needs of different clients. Their accounts are categorized into the eToro Club, which offers tiered memberships based on the client's equity holdings. Each level provides unique benefits and services. The membership tiers in eToro include:

1. Silver
2. Gold
3. Platinum
4. Platinum+
5. Diamond

Each tier escalates in the range of exclusive offerings, perks, and privileges, enhancing the trading experience as clients move up the tiers.

Kraken, on the other hand, simplifies its offerings into three main account types:

1. Starter
2. Intermediate
3. Pro

The Kraken Pro account is the premium option, providing enhanced features such as personalized withdrawal and deposit limits, access to Kraken's over-the-counter (OTC) trading desk, increased API limits, and more generous margin allowance limits. This account is designed for more experienced traders seeking advanced trading capabilities.

Demo Account

Kraken offers a specialized form of a demo account but with a specific focus. While it does not provide a traditional demo account with virtual funds for general trading, Kraken users can sign up for a demo account to trade futures. This feature is particularly useful for those looking to explore the futures market within the Kraken ecosystem.

eToro trading, in contrast, offers a comprehensive demo account that includes $100,000 in virtual money. This allows clients to engage in mock trades and familiarize themselves with the platform's features and trading environment, all without the risk of losing real money. The eToro demo account is an excellent tool for both beginners and experienced traders to practice trading strategies and understand the platform's functionalities.

If you're interested in exploring the eToro platform, starting with the demo account is a straightforward process. By clicking the button below, you can begin the process of opening an account. Remember, using the virtual portfolio doesn't require an immediate deposit. You have the flexibility to fund your account whenever you're ready to transition to live trading.

Registration Process

Registering with either eToro or Kraken is straightforward and user-friendly. To create an account with either platform, you'll need to provide just a few basic details: a username, a password, and an email address. This simplicity in the initial registration process makes it convenient for users to get started.

However, it's important to note that completing the registration and fully activating your account requires making a minimum deposit. This step is essential to unlock all the features and functionalities of your account, whether you choose eToro or Kraken. This deposit ensures that users are committed and ready to engage in trading activities on the platform.

Minimum Deposit Requirements

eToro has a variable minimum deposit policy, which is determined based on your geographic location. This amount ranges from $10 to $1,000.

For instance, traders in the UK and USA have a minimum deposit requirement of just $10. However, the minimum deposit is set at $50 for residents of several other countries, including Australia, Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Guernsey, Hungary, Indonesia, Ireland, Italy, Latvia, Liechtenstein, Luxembourg, Malaysia, Malta, Monaco, Netherlands, Norway, Philippines, Poland, Portugal, Romania, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Taiwan, Thailand, United Arab Emirates, Vatican City, and Vietnam. This structure ensures that eToro's services are accessible while also considering the economic variations across different regions.

Kraken, conversely, sets its minimum deposit requirements based on the type of cryptocurrency you choose to deposit. This approach reflects the differing values and transaction norms for each cryptocurrency. Here are some examples of the minimum deposit amounts for various cryptocurrencies on Kraken:

• Bitcoin (BTC): 0.0001 BTC
• Bitcoin Cash (BCH): 0.0006 BCH
• Cardano (ADA): 5 ADA
• Dogecoin (DOGE): 0 DOGE
• Ethereum (ETH): 0.05 ETH
• Ripple (XRP): 0 XRP
• Stellar Lumens (XLM): 0 XLM

These minimum deposit amounts are subject to change and are influenced by the market value and network conditions of each cryptocurrency.

Platform Compatibility

eToro and Kraken are both highly accessible, offering compatibility across the two main types of user platforms. Users can access these trading platforms through a web browser on desktop computers, ensuring a comprehensive and user-friendly trading experience on larger screens. Additionally, for traders on the go, both eToro and Kraken provide dedicated mobile applications that are compatible with smartphones operating on iOS and Android systems. This dual-platform compatibility ensures that users can manage their trades and monitor the markets whether they are at their desks or out and about, providing flexibility and convenience in trading.

Assets Comparison

For traders seeking a diverse portfolio, eToro stands out as the more versatile option compared to the crypto-focused Kraken. eToro, being an online brokerage platform, offers its users an extensive array of financial assets to trade. This includes stocks, cryptocurrencies, indices, ETFs (Exchange Traded Funds), commodities, and forex (foreign exchange markets). This variety is particularly beneficial for those looking to spread their investments across different asset classes.

Kraken, on the other hand, is primarily a cryptocurrency exchange. It specializes in this field, supporting an impressive range of over 240 cryptocurrencies, which is a larger selection than eToro's offering of 80+ cryptocurrencies. This makes it a highly attractive platform for those whose primary interest lies in cryptocurrency trading. This focus on cryptocurrencies makes Kraken an excellent choice for dedicated crypto traders.

Leverage Options

When it comes to leveraging investment opportunities, Kraken and eToro adopt different approaches.

Kraken offers leverage, but it's limited to a few of its financial instruments, with ratios ranging from 1:2 to 1:5. This level of leverage might be considered modest, especially for those accustomed to forex trading where higher leverage is common. Additionally, Kraken charges a leveraged trading fee, which varies between 0.01% to 0.02% depending on the cryptocurrency involved. This fee is applied every four hours, a factor that traders need to consider in their cost calculations.

eToro, in contrast, aligns its leverage offerings with ESMA (European Securities and Markets Authority) regulations, offering a maximum leverage of 1:30. This range is more in line with the leverage typically used in forex trading and might be more appealing to traders who employ leverage as a strategy to amplify their investment power with a smaller amount of capital.

It's crucial to remember: the inherent risks associated with using leverage. While it allows investors the potential to earn significantly more than their initial investment, it also escalates the risk of substantial losses. The adage "the higher the leverage, the higher the risk of losing money" succinctly captures the double-edged nature of leverage in trading. Investors should always weigh these risks carefully against the potential rewards when considering leveraged trading.

Customer Service Options

eToro offers multiple channels for customer support, though it primarily operates through digital means. Customers can reach out to eToro's customer service team via email or live chat. While the absence of phone support might be seen as a drawback by some, the convenience of accessing support online through chat or email is a significant plus for many users. In addition to these direct contact methods, eToro also provides an online ticket submission system and a comprehensive Help Center. The Help Center is particularly useful for addressing a wide range of queries and issues related to eToro’s services, offering a self-service option for users.

Kraken, in contrast, provides a broader range of customer service options. Users can contact Kraken's customer service department through email, phone, or live chat. This variety of contact methods ensures that users have the flexibility to choose the mode of communication that best suits their needs and preferences. The inclusion of phone support is a noteworthy feature for those who prefer speaking directly to a customer service representative for assistance.

Regulation and Licensing

When selecting an online trading service, one of the most critical factors to consider is their regulatory compliance and licensing status. Ensuring that a platform is regulated by credible authorities can provide a sense of security and trustworthiness.

eToro is well-regulated, holding licenses from several respected authorities:

1. Cyprus Securities & Exchange Commission (CySEC): eToro (Europe) Ltd. is licensed under the company registration number HE058.
2. Financial Conduct Authority (FCA): eToro (UK) Ltd. is authorized and regulated, with the company registration number 7973792.
3. Australian Securities and Investments Commission (ASIC): eToro AUS Capital Pty Ltd. holds an Australian Financial Services Licence (AFSL 491139) issued by this regulatory body.

Kraken, similarly, adheres to legal and regulatory requirements in each jurisdiction where it operates. It is regulated by the US Financial Crimes Enforcement Network (FinCEN) and operates in compliance with local regulations. Kraken client funds are stored in bank accounts with partner banks, subject to stringent regulatory oversight. In Wyoming, Kraken Bank is regulated by the Wyoming Division of Banking.

Kraken is registered and regulated as follows:

1. Financial Crimes Enforcement Network (FinCEN): As a Money Services Business (MSB), Kraken is registered under the number 31000176593851.
2. Financial Transactions and Reports Analysis Centre of Canada (FINTRAC): Kraken is also registered as an MSB in Canada, with registration number M19343731.
3. Financial Conduct Authority (FCA): CryptoFacilities Ltd, part of Kraken, is regulated with the reference number 757895.
4. Australian Transaction Reports and Analysis Centre (AUSTRAC): Bit Trade Pty Limited, another Kraken entity, operates as a regulated Digital Currency Exchange with ABN 42 163 237 634 and ACN 163 237 634.
5. Financial Services Agency (FSA) of Japan: Payward Asia, K.K., associated with Kraken, is registered as a Crypto Asset Exchange Operator, with the registration number Director-General of Kanto Local Finance Bureau 00022.

These regulatory frameworks play a crucial role in ensuring the platforms operate with transparency, integrity, and in compliance with financial laws, providing a secure environment for traders.

Conclusion

Having engaged with both Kraken and eToro, I can attest to the strengths that each platform brings to the table. Kraken has cemented its status as a reliable cryptocurrency exchange, a reputation well-supported by its performance and the positive feedback from its user base. Its features, such as high Bitcoin to EUR liquidity, robust security measures with no major hacks reported, industry-standard commission rates, and sophisticated charting tools powered by TradingView, make it an excellent choice for cryptocurrency enthusiasts.

On the other side, eToro's appeal lies in its versatility. It caters to traders looking for a broader investment scope beyond cryptocurrencies. The platform's ability to provide access to a wide range of financial assets, including stocks, ETFs, and commodities, is a significant advantage. This diversity allows traders to mitigate risk by diversifying their portfolios, an essential strategy in any trader's playbook.

What makes eToro particularly engaging is its user-friendly interface, combined with the innovative copy trading feature. This unique aspect of eToro empowers novice traders to learn from and replicate the strategies of more experienced traders, a valuable tool for anyone new to the trading scene. While eToro also offers a substantial range of cryptocurrencies for trading, its strength undoubtedly lies in its multifaceted trading options.

In essence, if your focus is purely on cryptocurrency trading, Kraken will serve you well with its specialized offerings. However, if your trading strategy includes diversification across various asset classes, eToro stands out as the more suitable choice. Both platforms demonstrate their unique strengths, but your choice ultimately depends on your specific trading goals and interests.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply. Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.