Considered one of the oldest cryptocurrency exchanges, Bitfinex, a Hong Kong-based business, was established in 2012. The exchange is well-suited for advanced traders, and it offers the option for margin lending and trading.
Currently, Bitfinex doesn’t accept customers based in the U.S.
If you are interested in learning more about this platform, keep reading for a thorough Bitfinex review.
A Quick Look at Bitfinex
Founded in the British Virgin Islands by iFinex Inc, Bitfinex started as a P2P margin lending platform, used for Bitcoin only. Some management and founders if iFinex Inc. is also associated with Tether, which is the U.S. based Stablecoin.
Now that you understand what the company is and how it was started, it is time to take a deeper dive into what it offers and why this is a smart option for advanced and experienced traders.
Services by Bitfinex
There are several services that Bitfinex offers its customers. Some of these are highlighted below.
Advanced Trading Platform
Bitfinex provides users the most liquid order book in the world. Higher volume is essential for traders because it ensures a lower spread, which is the difference between the best bids and the ask prices.
This system offers customizable, advanced GUI, more than 50 trading pairs (for example, BTC/ETH), many order types, like limit, trailing stop, stop, market, scaled, and fill or kill orders.
The Bitfinex trading platform dashboard is also completely customizable. It is possible to access advanced charting functions along with API access. All the features combine, which make it a popular exchange for more experienced and sophisticated cryptocurrency traders.
Margin Funding and Trading
Users of Bitfinex can borrow and trade with as much as 3.3x leverage via the site’s Peer to Peer (P2P) margin funding platform. The borrowing terms (duration, interest, and duration) are automatically determined by you (the user) or automatically by the platform.
Another option is for cryptocurrency owners to lend funds to traders to earn interest. Users can offer funding through an array of assets and currencies; they choose at the duration and rate.
It is important to note that margin trading amplifies the downside and upside risk, and it is not something that is highly recommended for new traders. With margin funding, your funds are locked on Bitfinex for the loan’s duration.
Over the Counter Services
If you want to trade larger amounts of money (such as $100K or more) of cryptocurrency privately, you can utilize over-the-counter trading services offered by Bitfinex. The service will match and secure all larger, private deals.
It is no big secret that Bitfinex has gone through several issues and problems. For example, in 2015, the exchange was hacked. During this hack, 1500 Bitcoins were stolen.
In April 2016, another hack occurred when 120K BTC was stolen, making this event the second-largest Bitcoin theft in history. The only one bigger than this was when Mt. Gox lost 750K BTC.
The main difference between Bitfinex and Gox is that Bitfinex made sure the clients were made whole again. While not all accounts were affected, Bitfinex decided to spread the loss among all clients, with users taking a 36% “haircut” on their total account values.
A year after that, clients received full compensation – as long as they kept their BFX tokes, which were essentially Bitfinex IOUs. Unfortunately, the issues with Bitfinex did not stop there. In April 2017, all Bitfinex bank accounts were frozen by Wells Fargo, the company's correspondent bank.
This situation continued for several weeks, resulting in all types of client complaints and distortions in the company's pricing structure. Eventually, normal service was restored; however, U.S. customers and U.S. dollars are no longer accepted by the company because of these banking issues.
Payment Methods and Currencies
Bitfinex currently accepts fiat deposits in USD, GBP, JPY, and EUR. The fiat deposits are made through wire transfers only. Currently, Bitfinex supports USDT – Tether – the quasi-fiat token that is unofficially pegged to the U.S. dollar price.
Verification is required to use Tether and for expedited cryptocurrency withdrawals. However, the exchange is still usable for those who just provide their email address. There is also direct access available through Tor hidden service.
With Bitfinex, you are working with a taker-maker fee model. With this, fulfilling existing orders is considered the takers, and traders that place new limit orders are called makers.
The fees begin at 0.2% for the takers, and they can drop all the way down to 0% for large marker orders. Larger orders have no trading fees if they are orchestrated through the OTC desk.
If you use a bank wire, a 0.1% deposit and withdrawal fee is applied, which may grow to 1% of you want an expedited withdrawal.
Deposits for cryptocurrency are usually free unless you are planning to deposit under $1000 worth of crypto. If this is the situation, you are going to pay a fee, which is based on the coin being deposited. Withdrawals of cryptocurrency also have a small fee, which is dependent on the currency you are withdrawing.
Countries Supported by Bitfinex
The services offered by Bitfinex are currently available to customers across the globe. However, there are a few exceptions. These exceptions include:
- The United States of America
Anyone in a country besides these can use Bitfinex.
Customer Reviews and Support
Users of Bitfinex have access to an extensive knowledge base and a support system that is operated by tickets. The average TrustPilot score for the company shows that it is doing well in the realm of job satisfaction (most of the exchanges get “poor” ratings).
While this is true, there has been some criticism related to the exchange over the years. This mainly applies to business transparency and the close relation the company has with the stablecoin Tether. Some people claim it feels like the company is trying to hide something, but there is no proof available for this claim.
The New York’s attorney general’s office accused Bitfinex on April 24th of a coverup worth over $850 million. According to the accusation, Bitfinex hid the loss of $850 million, including corporate and co-mingled client funds.
Bitfinex openly denied these claims and sent an open letter to the users a day after the attorney general’s office letter. In the company’s open letter, they claimed it was full of false assertions and inaccuracies.
Binance vs. Bitfinex
Both Binance and Bitfinex provide support for a large number of cryptocurrencies. However, the interface used by Bitfinex is much more advanced (and some claim more confusing) than the one used by Binance.
When reputation is considered, Binance has a better overall rating, even though it has only been around since 2017. This is mostly attributed to the company’s clean, problem-free past.
The past hack issues mentioned above for Bitfinex, along with the accusations of connections to Tether, have raised some concerns within the Bitcoin community. The fees are typically lower with Binance, with a fixed 0.1% fee rather than the taker-maker fee that Bitfinex users.
This means that unless you want the more advanced features offered by Bitfinex, then Binance is probably a better option.
The Signup and Login Features of Bitfinex
If you decide that Bitfinex is the right trading platform for you, you may be interested in setting up an account. However, before doing this, it is important to remember that this platform is designed for professional traders, and certain specifications must be met.
This means that you should carefully read the pop-up box that will appear when on the platform and agree to the specified terms and conditions. Currently, these include a minimum account equity of 10,000 USD. Also, new accounts cannot trade or perform any platform function until this amount is reached.
If you want to access the fiat withdrawals and deposits, you have to agree to the verification process. This can take between six and eight weeks to complete. After you have ticked all the required boxes, you can begin creating the account.
Setting Up Your Account
It is possible to open an account by following the instructions included in the signup process. To do this, you must create your username, enter your email address, and unique password. You will also be required to enter your time zone and a captcha text.
Making Your First Deposit
After setting up your account, it is time to fund it. Locate the “deposit” button, which is found in the right-hand corner of the page, at the top.
When you click this button, you will be taken to the deposit page. Here you can select the monetary value you are depositing, tether, or you can choose from a list of cryptocurrencies to make a deposit.
Making a Trade
After funding, it is time for trading. To orchestrate your first trade, click on the “trading” button. Select the pairing that you want.
You can specify the type of order, price, and quantity that you want to execute.
Understanding Bitfinex Security
Bitfinex is considered one of the oldest exchanges operating today. While this is true, there have been hacks for this company, which were described above.
Due to the hacks that have occurred, Bitfinex has increased security. Currently, 99.5% of all client funds are being stored in an offline, cold storage system that utilizes a multi-signature function, and that is geographically distributed across several secure locations.
All client accounts are secured using U2F and 2FA, along with PGP email encryption. Accounts are also being monitored and strengthened by using an array of advanced verification tools, which cover activity in the account.
These verification tools include analyzing saved login data to help discover any unusual activity and the use of intelligent systems that will detect changes in IP addresses and prevent sessions hijacking.
The security also includes email notifications that report any logins, including links to freeze your account instantly if you suspect any malicious activity. It is also possible to limit access to your account based on your IP address.
The Bitfinex company also decides to monitor client withdrawals carefully to help reduce attacks. The platform’s security system also monitors all withdrawals based on the IP address and other behavioral patterns that will trigger the manual inspection on any withdrawals that look unusual.
As a customer, it is also possible to whitelist an address to ensure that withdrawals are only sent to the specified location. According to Bitfinex, the company also uses withdrawal confirmation steps that are immune to malicious browser malware.
Pros & Cons of Bitfinex
- The platform offers the widest possible range of order types that includes limit orders, market orders, stop-limit orders, trailing stop orders, take profit orders, and more.
- It supports a wide range of crypto assets including BTC and more than 160 altcoins.
- One can instantly purchase Bitcoin through their credit card on Bitfinex. Other crypto assets up for the purchase with your credit card or debit card includes Tether, Tether Gold, Tezos, TRON, Ethereum, or other ERC20 tokens.
- Bitfinex is a highly trusted crypto exchange with the provisions of anonymity.
- Derivatives are traded on margin allowing users to access up to 100x leverage.
- The platform has a demo portal helping users to try out all its features before signing up for an account.
- History of vulnerability with 70 million US dollars worth of coins stolen from the site in 2017.
- The user interface includes lots of features and options that may appear confusing for people who are newly initiated.
- Comparatively higher 30% limit on balance during margin trading.
- The wallet services are pretty basic.
Frequently Asked Questions About Bitfinex
We’ve compiled some answers to questions we often get. Should you have any other questions, feel free to reach out below in the comments.
How Secure is Bitfinex?
Having witnessed a significant cyber-hack in the past, Bitfinex takes its security very seriously. The protection of the user account involves two-factor authentication and the ultra-secure FIDO Universal 2nd Factor (U2F) open authentication standard. It also requires advanced API key permissions, uses email encryption with open PGP, and also puts withdrawals protection into effect. The majority of the funds stay in offline, multi-signature cold wallets with only 0.5% of crypto assets being present in hot wallets for day-to-day platform operation. To keep the overall system secure, the platform leverages up-to-date Linux systems to host the platform and automatic real-time backup of the database, and an automatic Distributed Denial of Service (DDoS) protection.
What is the Fees-Structure of the Platform?
For order execution, the fees depend upon your trading volume in the last 30 days. The maker fees range from 0.020% to 0.100% and the taker fees range from 0.055% to 0.200%. For Margin Funding Providers, the lender’s fee is 15.0% of the fees generated by active margin funding contracts. It can go up to 18% when opened by a hidden offer. There are no fees on crypto and stablecoin deposits. Bank wire deposits are charged with a deposit fee of 0.1%.
Does Bitfinex have any Geographic Restrictions?
According to the Bitfinex rules, no U.S. Person may directly or indirectly use any of the Services or the Bitfinex site. Apart from the US, countries that ban the use of cryptocurrency would not be able to access Bitfinex.
What are the Payment Methods Supported by Bitfinex?
Does Bitfinex Support Token Sales?
Yes. Bitfinex has a dedicated service platform meant to facilitate token sales under certain conditions and guidelines.
Your Comprehensive Bitfinex Review
As you can see from the Bitfinex review here, there are many factors to consider to determine if this platform is right for you. Take some time to keep all the information here in mind to ensure that you make the right decision regarding whether this is a platform that should be used.
If you want more information about various cryptocurrency platforms and which one is best for your trading needs, check out some other reviews. We offer information on other cryptocurrency-related topics, too, to ensure you make an informed decision regarding the platform you use and the experience you have.
Being informed, knowing what to expect, and using our informed reviews will help you make the right decision regarding what platform to use and how to make the most of your cryptocurrency trading efforts. While there are no guarantees of success, choosing the right platform is a step in the right direction.