KuCoin Review: Cryptocurrency Exchange With Margin, Futures & Earning Options
Whether you are looking to buy digital currencies like Bitcoin and Ethereum with a debit/credit card or trade crypto-to-crypto pairs – KuCoin covers both bases.
The global exchange and third-party broker is home to some of the largest trading volumes in the space, alongside a fee-structure that should suit most budgets.
In this guide, we review the ins and outs of KuCoin. This includes an in-depth look at the platform’s supported coins, fiat currency facilities, fees and commissions, safety, customer support, and trading arena.
What is KuCoin?
Launched as recently as 2017, KuCoin is a cryptocurrency exchange that also offers third-party brokerage services. Although the platform has just three years of trading history, it is now one of the largest cryptocurrency exchanges in the space.
One of the main reasons for this is that you will find over 200 coins with about 450 cryptocurrency pairs hosted at the exchange. Not only does this include major pairs like BTC/USDT and ETH/USDT, but heaps of crypto-cross pairs. Best of all, if you have an appetite to trade a less liquid ERC-20 token, chances are you will find it at KuCoin.
KuCoin was initially a cryptocurrency-only platform, meaning that you could not deposit funds with fiat currency. However, the platform has since formed a partnership with Simplex – a European payment provider that bridges the gap between cryptocurrencies and everyday money.
When it comes to cryptocurrency trading fees, KuCoin charges just 0.10%. This puts it on par with the likes of Binance. Similarly, KuCoin is also behind its own digital token – KuCoin Shares (KCS). By owning and storing KCS tokens, you will benefit from discounted trading fees, as well as an entitlement to a share of the trading commissions that KuCoin collects.
In terms of the numbers, KuCoin claims to have facilitated more than 650 million individual trades since its inception in 2017. This translates to more than $71 billion in accumulated trading volumes.
Finally – and as we cover in more detail further down, KuCoin is not regulated by a national licensing body. Although this means that you will be able to trade cryptocurrencies without supplying any ID, this won’t be the case if you wish to buy digital coins with a debit/credit card through Simplex.
What can you Trade at KuCoin?
KuCoin offers a vast range of financial instruments that goes above and beyond just crypto-to-crypto pairs. On the contrary, the platform also offers cryptocurrency indexes, margin trading, and even futures.
Let’s explore each asset class in more detail.
Crypto-to-Crypto Pairs
Each and every trading pair at KuCoin falls within the remit of crypto-to-crypto, not least because it does not offer any fiat-denominated instruments. Instead, you will need to trade your chosen cryptocurrency against the USDT if you want access to the crypto-to-USD space.
If you’re a seasoned cryptocurrency trader then you will know first hand that this is industry standard anyway, so you’ll have no issues with trading volumes or liquidity.
Outside of USDT, you can trade crypto-cross pairs. Examples of this include BTC/ETH, ETH/XRP, and BSC/BTC. Ultimately, listing each and every trading digital currency is beyond the remit of this review, albeit, rest assured that the platform hosts more than 450 pairs.
Crucially, KuCoin is often one of the very first exchanges that newly launched cryptocurrency token projects opt for. As such, support for less liquid digital tokens is something that the team at KuCoin actively look to facilitate.
For a full breakdown of each and every pair that KuCoin hosts, you can find this information here at CoinMarketCap.
KuCoin Indexes
On top of traditional crypto-cross pairs, KuCoin also offers a number of indexes. The concept here is that KuCoin will take the weighted average of a specific cryptocurrency across several leading exchanges.
This is with the view of offering a more accurate price of the coin in question, as it takes into account the variations that you often find between competing platforms.
KuCoin indexes are available across:
- Bitcoin
- Ethereum
- Ripple
- Litecoin
The cryptocurrency exchanges that KuCoin derives its pricing activity from are:
- Coinbase
- Bitstamp
- Kraken
- Gemini
- Bittrex
- Liquid
The price of each index is denominated in USD, but settled in the respective cryptocurrency.
KuCoin Futures
Launched in mid-2019, the KuCoin Mercantile Exchange allows you to trade Bitcoin futures. KuCoin itself notes that it is looking to challenge the likes of BitMEX in this particular area of the cryptocurrency derivative space. As a result, you will have access to Bitcoin futures alongside a substantial margin position of up to 100x.
In simple terms, this means that a $100 account balance would permit a maximum trade value of $10,000. When it comes to the underlying spot price, KuCoin once again takes the weighted average from various leading exchanges – such as Kraken, Coinbase Pro, and Bitstamp.
At the time of writing, KuCoin only supports BTC and ETH futures, although it hopes to add further digital currencies in the near future. When it comes to fees, expect to pay 0.060% as a market taker, and 0.020% as a maker. There are also settlement fees of 0.025%.
Trading Fees and Commissions
First and foremost, there are no fees associated with cryptocurrency deposits, and withdrawals are charged at the standard mining rate as per the coin you are looking to cash out.
When it comes to trading fees outside of the futures arena, you will pay 0.1%. This means that a $10,000 trade would cost you $10 in fees. As we briefly mentioned earlier, this sits in-line with fellow exchange counterpart Binance.
KuCoin Shares (KCS)
KuCoin Shares – or simply KCS, is a proprietary cryptocurrency token created by the exchange. By owning and holding KCS tokens you will be accustomed to a number of benefits.
This includes:
Discounted Trading Fees
One of the most notable benefits of holding KuCoin Shares is that you will get discounted trading fees. Crucially, while a standard fee of 0.1% is industry-leading, you stand the potential to reduce this by an additional 20%. What you need to do is to simply turn on the KCS Pay Fee button and enjoy the discount.
Dividends
On top of reducing your trading commissions, holding an allocation of KuCoin Shares affords you the opportunity to earn dividends. In a nutshell, KuCoin as a platform will distribute 50% of the trading commissions that it collects from members each and every day.
This is then distributed proportionately across all holders of KuCoin Shares. For example, let’s suppose that you hold 1% of the entire KCS supply. If the platform pays out $250,000 in commissions, you would receive $2,500. You need to hold at least 6 KCS to benefit from the dividends.
Price History and Buying KuCoin Shares
To say the value of KuCoin Shares has capitulated since its all-time highs of January 2018 would be an understatement. At a peak of over $20 each, you can now obtain the very same tokens for less than $1 in mid-2020.
Nevertheless, if you do want to get your hands on KuCoin Shares you can do this by exchanging them at the platform for an alternative cryptocurrency like Bitcoin or Ethereum.
Fiat Currency Facilities at KuCoin
As the end of 2018, KuCoin has since formed a partnership with European-based payment provider Simplex. The partnership ensures that users from over 100 countries can now deposit real-world funds with a debit or credit card.
This is ideal if you are looking to trade cryptocurrencies, futures at KuCoin but you do not have any digital currencies available to you. Instead, you can simply enter your debit/credit card details and get cash directly into the platform.
With that being said, it is important to note that the fees associated with this are not cheap. Although the occasional promotion is offered on deposit fees, this will cost you a whopping 2.5 – 3.5% (with a $10 minimum).
This means that a $1000 debit/credit card deposit would cost you $25 in fees. It is noticed that this is slightly cheaper than the likes of Coinbase, which charges 3.99% (with various minimums in place).
Also, KuCoin is developing an OTC Trading Desk, on which all users could buy and sell major coins like BTC, USDT, PAX without any fee. The OTC platform currently supports USD, CAD, CNY, IDR and VND.
Trading Platforms
KuCoin offers a proprietary trading platform that was built from the ground-up. There is no requirement to download or install any software to your desktop device, as the KuCoin trading arena can be accessed through your standard web browser. The platform is potentially suited to both newbie investors and seasoned traders.
The reason we say this is that while the platform is super-clean and easy to navigate through, there are heaps of advanced tools available at your disposal. In fact, you have the ability to fully customize your KuCoin trading screen however you see fit.
When it comes to trading volumes and the availability of liquidity, you should have no concerns at all when trading more popular pairs. You might, however, find that volumes are low on less liquid pairs – especially those involving ERC-20 tokens.
Mobile Trading
If you have a tendency to buy, sell, and trade cryptocurrencies on the move, then you might be interested in the KuCoin mobile trading app.
The application is available to download on iOS and Android devices. You will have access to most account features on the app, such as placing orders, checking the value of your portfolio, and depositing and withdrawing funds.
How Long do Withdrawals Take at KuCoin?
In the vast majority of cases, KuCoin will process your withdrawals within 30 minutes of receiving the request. The platform notes that this is automated, and that manual authorization is only required if the size of your deposit is larger than 100,000 times that of the handling fee (mining fee).
Once the funds leave KuCoin, they will be transferred to the cryptocurrency wallet address of your choosing. Make sure that the address is valid, as there is nothing that KuCoin can do if you make an error!
Earn Interest at KuCoin
An additional feature available at KuCoin is that of its lending program. In its most basic form, you stand the chance of earning interest on your digital currency holdings by loaning it out. The main concept is that the tokens will be used to help fund margin accounts.
For example, let’s suppose that a KuCoin trader decides to apply leverage of 10x on an order. For each day that the position is kept open overnight, the trader would need to pay interest. This is because they are trading with more than they have in their account and thus – this comes at a cost.
With that said, KuCoin has opened its doors to everyday investors by giving you the opportunity to fund margin positions. This is available on several coins – including USDT, Bitcoin, Ethereum, Litecoin, EOS, and many more.
In terms of the specific interest rate, this will vary from coin to coin. As an example, by lending out Bitcoin for 28 days, you could be earning an annualized interest rate of 4.83%.
If this is something that you are interested in exploring, KuCoin offers a profit estimation calculator. You simply need to specify how much you are willing to lend out, on what digital currency, and for what length of time – and the calculator will advise you how much you can earn.
It is important to remember that although the rates of interest on offer are super-competitive, you must consider the risks associated with this. After all, KuCoin is not a regulated cryptocurrency exchange so you must factor this into your risk vs reward model.
Is KuCoin Safe?
As is the case with all cryptocurrency exchanges, it is crucial that you are able to ascertain whether or not KuCoin is safe. Not only does this include the platform’s regulatory standing, but its internal and external security practices, too.
Let’s break these metrics down in more detail.
Regulation
In a nutshell, KuCoin is not regulated by any national licensing bodies. This isn’t a major surprise in the cryptocurrency exchange arena, as lots of platforms choose to operate without a license. Whether or not you feel comfortable trading at an unregulated exchange depends on what side of the fence you sit on.
For example, if you are the type of trader that prefers to buy and sell cryptocurrency pairs in an anonymous nature, then there is every chance that a platform like KuCoin is suitable for your needs. At the other end of the spectrum, if you are the type of trader that demands a regulatory safeguard of some sort, then KuCoin might not suffice.
KYC
As noted above, KuCoin is not required to ask you for any personal information – nor will they demand sensitive identity documents. However, the one exception to this rule is if you plan to deposit funds with a debit or credit card through the Simplex integration.
In fact, in order to remain compliant with all relevant laws surrounding anti-money laundering, you will need to upload a copy of your government-issued ID (passport or driver’s license). This is just the nature of the game when using fiat currency at a crypto-exchange.
KuCoin Security Practices
In terms of internal security practices, KuCoin claims to run institutional-grade systems that ensures it keeps crime away from the platform. This is fully supported by a commitment to cold storage.
Although the exact percentage is not specified by KuCoin, it is claimed that the vast bulk of client funds are held offline. The remainder is kept in hot wallets to ensure the platform is able to meet its offering of near-instant and automated withdrawals.
To date, there have been no publications of KuCoin encountering a major hack of any sort, which is an excellent sign. With that said, you always need to ensure you understand the risks of a potential external hack, as your funds are being stored in wallets that you do not personally control.
Also, it is worth noting that in April 2020, KuCoin completed a strategic cooperation with Onchain Custodian, Singapore’s crypto asset custody platform. Onchain Custodian will offer custody service for the safekeeping of KuCoin crypto assets. The custodial funds will be backed by Lockton, the world’s largest private insurance brokerage company. This is believed to further enhance the exchange’s security level.
2FA
Best of all, KuCoin allows you to install two-factor authentication (2FA) on your account. This means that a unique code will be sent to your mobile device whenever you wish to perform key account functions. This includes logging into your account and making a withdrawal request.
KuCoin Customer Support
When it comes to customer service, the team at KuCoin provides an around the clock support team that operates 24 hours per day – 7 days per week. You can send the team an email, albeit, if you need instant one-on-one support you are best advised to use the live chat facility.
Sentiment on this is somewhat mixed in the public domain. With some users reporting connection times in the seconds, others have noted that waiting times are beyond acceptable. With that said, it all depends on how busy the team is at the time of the request. There is no telephone support service offered.
How to get Started at KuCoin
Like the sound of KuCoin and think the platform is suitable for your long-term trading needs? If so, we are now going to show you what you need to do to get started with a trading account today.
Step 1: Open an Account
To get the ball rolling, head over to the KuCoin homepage and click on the ‘Sign Up’ button at the top of the screen. You will then be prompted to enter your email address and to choose a strong password.
You will need to verify your email address before linking up 2FA via your mobile phone. At this stage of the registration process, you will not be asked for any personal information.
Step 2: Deposit Funds
Once you have opened your KuCoin account you will then be promoted to deposit some funds. In this respect, you have two options. If you already possess a digital token, you can deposit this straight into KuCoin.
Simply head over to the deposit page and search for the respective coin. Then, click on the deposit tab to reveal your unique wallet address for that specific cryptocurrency.
Copy the address to your clipboard, head over to your private wallet, specify the number of coins you wish to deposit, and confirm the transaction.
Depending on the cryptocurrency you are depositing, it typically takes around 10-20 minutes for the funds to be credited into your KuCoin account.
Fiat Currency Deposit
If you do not have access to a digital currency, you will need to deposit funds with your debit or credit card. Hover over the ‘Buy Crypto’ button and then click on ‘Buy with Credit Card’.
Follow the step-by-step instructions that are presented to you on screen. Crucially, you will be asked to verify your identity before you are able to use your debit/credit card. The end-to-end process is taken care of by Simplex.
Step 3: Start Trading
As soon as your KuCoin account has been funded, you are ready to start trading. The specific trading arena that you need will depend on the type of financial instrument you are looking to access. This is because KuCoin separates its cryptocurrency exchange and future derivative platforms.
KuCoin Review: The Verdict?
In summary, it is clear to see why KuCoin is now one of the most popular cryptocurrency exchanges in the space. Not only does it give you access to over 450 cryptocurrency pairs, but you can also trade crypto-specific indexes and Bitcoin futures.
Moreover, standard trading fees amount to just 0.1%, which you can reduce by an additional 20% by paying fee with KuCoin Shares. We also like the fact that you can now deposit funds with a debit or credit card, albeit, you will need to bypass a KYC process first.
The main gripe that we have with KuCoin is that it is not a regulated entity. While this does mean that you can trade crypto-to-crypto pairs anonymously, your funds are never 100% safe.
On the flip side, reports about a KuCoin hack are yet to surface since its inception in 2017 – which is an excellent sign.
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Text source: Blockonomi
