KuCoin Review 2022
KuCoin’s rich feature set and low fees could make it a compelling choice for advanced crypto investors. Unfortunately, KuCoin is not licensed to operate in the United States, which severely limits the platform’s utility for many-but not all-U.S.-based investors.
For instance, U.S. users cannot directly deposit dollars or other fiat currencies in KuCoin accounts, making the platform best suited to traders who already own crypto and are looking to trade less common coins.
Who Should Use KuCoin?
There’s one huge caveat you need to understand before you even think about opening a KuCoin account: KuCoin is not licensed to operate in the United States. This does not mean you are unable to use KuCoin in the U.S., although it does make using this platform more complicated and risky. Only advanced U.S. traders who want access to coins or trading features unavailable on other exchanges should consider KuCoin.
Users based in the U.S. cannot complete standard financial industry Know Your Customer (KYC) disclosures. The practical impact of this is that U.S.-based users cannot be verified and therefore face certain limitations, including lower daily withdrawal limits. You also put yourself at greater risk that your assets may become temporarily or permanently inaccessible should the government crack down on unlicensed cryptocurrency exchanges, as it has indicated it may recently.
Furthermore, U.S.-based users cannot deposit cash dollars directly into their KuCoin account. They can transfer cryptocurrency into an account or pay incredibly high rates to buy crypto with a credit card via one of KuCoin’s partners. Neither of these options is convenient for people who are new to crypto.
Understanding these major limitations puts KuCoin’s real advantages into perspective. The platform charges rock-bottom fees, supports trading in a huge range of cryptocurrencies, is one of a few platforms that allows U.S. users to have a margin account for trading cryptocurrencies and offers attractive discounts and bonuses associated with its native coin, KuCoin Token (KCS). These advantages may make KuCoin worth considering for advanced crypto traders.
As with all cryptocurrency exchanges, it’s important to keep in mind that you are investing in a very volatile, unproven asset class. This involves taking on significant risk, no matter where you do it.
These risks aren’t limited to just volatility. Crypto exchanges, including KuCoin, are frequently targeted by hackers. In fact, in 2020, KuCoin suffered a major hack that resulted in $285 million in assets being stolen. Almost all stolen coins were later recovered, and KuCoin compensated any missing assets through its insurance policy.
KuCoin’s trading fees are very competitive, on par with industry leader Binance.US. What’s more, investors can receive a discount based on their average monthly holding of the platform’s native token, KCS, or their previous month’s trading volume. They can slash fees even further-by another 20%-if they pay using KCS.
Like most crypto exchanges, KuCoin has a maker/taker fee structure, meaning you pay different fees depending on whether your order is considered a maker or a taker.
Makers create liquidity on an exchange by providing new open orders to be filled by others. Takers, meanwhile, reduce liquidity by filling existing maker orders. You cannot know ahead of time if your order will be a maker or a taker, so you probably won’t know in advance exactly what your fees will be.
The fees you end up paying depend upon how much you’ve traded over the past 30 days. KuCoin measures your 30-day trading volume in Bitcoin (BTC) rather than U.S. dollars, which can make it challenging to compare its fees with other exchanges’.
Considering the volatility of Bitcoin these days, investors face rapidly changing requirements compared to other exchanges to get a volume discount. KuCoin’s fees, however, may be lower than most other exchanges even before discounts.
U.S. users can buy selected cryptocurrencies by credit card via third-party partners and have the coins deposited into their KuCoin account. The fees for this workaround run anywhere from 3.5% to 5%, with a minimum of $10 at one partner. This is in addition to a range of fees charged by credit card companies to buy crypto.
Like most crypto exchanges, you pay a fee to withdraw almost all cryptocurrencies from your KuCoin account. For instance, the current fee to withdraw Bitcoin from the platform is 0.0005 BTC, which would amount to approximately $21.50 as of mid January 2022. The fee depends on the specific coin, so be sure to check these before you make your purchase if you plan to transfer your coins to another wallet or exchange.
If you expect you’ll be moving coins frequently, it may be worth comparing the all-in trading and withdrawal fees of a platform like Gemini, which offers a certain amount of free withdrawals per month and is much more newbie friendly.
1. Supports almost 600 cryptocurrencies
2. Allows crypto lending
3. One of the few crypto exchanges to offer margin trading
4. Customizable trading bots allow you to automate your investing with preset rules
1. Limited functionality for U.S.-based users because they cannot become verified
2. Withdrawals are limited to one Bitcoin and $400 of peer-to-peer trades per day
3. Target of major hack as recently as 2020
KuCoin Token (KCS)
KuCoin offers its own coin, KuCoin Token (KCS), which runs on the Ethereum network. Owning KCS lets KuCoin users receive trading fee discounts, and they are also entitled to sharing in a percentage of KuCoin’s trading fee revenue every day. To be eligible, users must hold at least six KCS tokens.
While KCS is undoubtedly one advantage of using the KuCoin platform, it’s still important to note that KCS is itself a volatile crypto and that you are not assured a stable coin value.
KuCoin is one of the few exchanges that lets U.S. residents have a crypto margin account. This risky investment practice enables users to borrow money to amplify their returns (and their potential losses). Using margin greatly increases the amount of risk you’re able to take on when investing in an already-risky and historically very volatile asset and is best left to experienced crypto investors.
KuCoin also allows users to lend their crypto holdings to other would-be margin traders. Interest rates and term lengths vary by coin.
Crypto lending is not, of course, without its risks. While the loans are collateralized and the recipient must maintain a certain balance, price dips may cause unexpected losses. KuCoin automatically enacts margin calls that replenish your loaned coins if a recipient’s account dips below 97% of their borrowed balance. If they are unable to fully repay you, KuCoin’s insurance covers the difference, though the platform notes in the terms that this is not guaranteed to fully cover any losses.
KuCoin’s Trading Bot allows users to automate their crypto trading by programming actions that automatically execute when conditions are met. You can use this for everything from rebalancing your portfolio when your asset allocation goes askew to programming guardrails for it to take advantage of price fluctuations in your absence.
Cryptocurrencies on KuCoin
With almost 600 coins supported by the KuCoin platform, new and experienced investors can find pretty much any cryptocurrency they are interested in purchasing or trading. A partial list of KuCoin’s total offerings includes:
1. Bitcoin (BTC)
2. Ethereum (ETH)
3. Litecoin (LTC)
4. Ripple (XRP)
5. KCS (KCS)
6. Tether USD (USDT)
7. Terra (LUNA)
READ ALSO :