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Bitfinex.com Review – Pros and Cons of Trading on BITFINEX
- Highly trusted
- High leverage at derivatives
- Orders illustrated in the chart
- Unlimited withdrawal
- Anonymity possible
- In-house mobile app
- Many payment options
- Our favorite altcoin broker
- was hacked in 2016
- Demanding verification process
- Lost volume since 2016
Bitfinex.com was officially opened in 2012 by Bitfinex Limited, a company based in Hong Kong. It became the “world’s largest Bitcoin exchange” (or at least one of the 2 or 3 tops ones) and could hold that state for a while. However, in August 2016 it changed, when 70 Million USD worth of coins were stolen from many user wallets. Nonetheless, Bitfinex remained upright and recovered from the hack. Their recovery management after the hack was legendary, for which they deserve recognition. Read more about the hack further below.
The site offers trade markets for about 160 cryptocurrencies such as Ethereum, Dash, Monero and a huge amount of other coins. The trading platform also accepts USD for funding. For fiat deposits, users always have to verify their identity first. The broker is quite user-friendly compared to some others. Reddit has a big category page for any kind of questions about Bitfinex.
In 2017 Bitfinex was forced to drop all verified US customers due to US laws, same as all other crypto CFD brokers offering margin trading. Therefore people from the US aren’t able anymore to get verified accounts in order to make fiat deposits and withdrawals.
Laws regarding cryptocurrencies are different in every country. This means that you may or may not be able to trade them in your country. But of course, technically, anyone can trade cryptocurrency on international platforms supporting anonymous trading, as long as they are able to access the website.
Unfortunately, certain countries ban the use of cryptocurrency and all corresponding sites. If you live in such countries, you may not be able to use Bitfinex. E.g.:
Bitfinex.com Hack 2016
In August 2016, over USD 70 Million worth of coins were stolen from the site. This is the second largest loss of Bitcoin in the history of cryptocurrency. The Mt. Gox incident being the first. Multiple Bitfinex accounts were hacked and most of their coins got stolen. Within only several hours, Bitcoin prices plunged down 20%. After the hack, Bitfinex struggled to recover and many people crossed over to other exchanges.
Fortunately, since 2017 the recovery process from the big hack is finished. That is due to the cryptocurrency broker’s smart strategy to give platform tokens to its users to replace the losses with an in-house coin. Those tokens were meant to be bought back by Bitfinex as soon as they had the money. In early 2017 all of those tokens were bought back by Bitfinex, so the users have their money back.
If you compare the market caps of Bitfinex to other sites, you’ll notice that there is a big difference. A sign that the platform couldn’t gain back their old position on the market yet. However, this might change anytime, since in our opinion the broker is still one of the best bitcoin and altcoin trading platforms out there by far.
1. Open an Account in the Home Page.
You need to provide:
- a. Username
- b. Email
- c. Password (1 Upper-case letter, 8 lower-case letters and at least 1 Special Character)
2. After you’ve signed up, an email will be sent and you need to confirm it.
3. To deposit/withdraw funds to/from your wallet, you will need to verify the account using two-factor authentication located in the security tab. In other words, you can verify the account using Google Authenticator or fido U2F (Physical Security Key, works with physical fingerprint for which you need a small security key device which gets plugged on your USB port. For use on mobile phones there is no extra device required).
4. You may now deposit or withdraw funds to and from your wallet and buy or trade cryptocurrencies.
To transfer funds, press the transfer button on the upper right corner of the site.
To set orders, you need to fill the order form on the left-hand side.
*Note: You may change the currency by pressing the trading button as you can see on the image.
1. Withdrawal / Deposit
The good thing about this site is that there is no minimum withdrawal or deposit amount for cryptocurrencies.
However, for cryptocurrency deposits below a $1000 equivalent, the broker charges small fees. This is to encourage traders to merge small deposits into bigger amounts, because too many tiny deposits can cause too much wallet maintenance effort which can cause deposit and withdrawal delays for all traders.
The same small fee generally applies to withdrawals, no matter how much you cash out. Some coins don’t have such fees, such as NEO and EOS among others.
Bank wire transfers are charged with 0.100% of the deposit amount, with a minimum fee of $20.00.
Bank wire: 0.100% of the withdrawal amount, with a minimum fee of $60 / €60.
Express bank wire (within 24 hours on business days): 1.000% of the withdrawal amount, with a minimum fee of $20.00
Bitfinex has 2 Modes:
1. Demo Tour
The demo gives a tour of the website without signing up. It also shows how every button works, and explains each function in detail. However, you will still need to sign-up for an account if you want to access the full functionality of the site’s demo.
2.1. Live Trading
The “Trading” section is normal exchange of currencies, without leverage. This means that in the case of purchases you actually get posession of the underlying asset. You can withdraw any altcoin you buy against BTC, USD or EUR.
Since its early days a few years ago, Bitfinex’s Altcoin portfolio has grown steadily. In addition to Bitcoin, about 160 altcoins can now be traded. All altcoins can be traded against Bitcoin (BTC) as well as against USD. Most can also be paired with ETH (Ether). Bitcoin can also be traded against EUR. There are also 9 certain altcoins that can be traded against the Euro. A handful of coins can even be traded against JPY.
You can also trade the coins on margin, but with little leverage only, which is up to 1:3.3. Here is an exact description how this works.
Derivatives – Margin Trading
Besides the normal Trading area the crypto broker has a Derivatives section, that may only be entered from people who are not citizens and/or residents of the US, Canada, the Seychelles or Switzerland or of any other prohibited jurisdictions. Derivatives are traded on margin, here we could use leverage up to 1:100. Leverage can be used completely flexibly, starting from 1:1 (which would be no leverage at all).
2 derivatives are available for margin trading: You can trade BTC against a USD derivative (USDt0) with 1:100 leverage, or ETH against USD. In order to be able to trade those derivatives, you need to hold USDt0. You can convert Tether to USDt0 within your Bitfinex account.
Bitfinex uses the professional Bitcoin chart of tradingview.com, which is embedded in the center of the dashboard. The chart offers all kinds of tools for in-epth technical analysis.
Your positions, orders and order history will be listed below the chart.
The 3 Different Wallets
Bitfinex offers different wallets for better control of your funds. Usually you only use the margin trading wallet for margin trades. So margin calls and losses will only affect the fund within this wallet. However, you can change the settings so the other wallets would also get involved in your margin trades.
Exchange wallet: for exchanging funds between the supported currencies.
Margin wallet: for trading leveraged long and short positions.
Funding wallet: for providing financing/margin funding other traders.
For the purpose of margin trading Bitfinex has a separate wallet.
Through the Funding Wallet, Bitfinex allows you to provide funding in any of the various funding currencies to traders. So this means that besides actively trading yourself you can use Bitfinex to lend money to other traders for margin trading. By providing margin trading loans to other traders, you can earn Bitcoin passively. When traders using your Bitcoins for margin trading close their positions, they return your loan plus your commission to your Margin Trading Wallet.
Bitfinex uses Two-Factor Authentication to protect your account, as described earlier above.
Bitfinex.com Account Verification
There are verification requirements before proceeding.
1. Complete online form. You will be asked what your intentions are regarding the use of the Bitfinex trading platform:
2. Age: at least 18 years old.
3. Information: telephone number, email address, residential address.
4. Identification: two forms of valid government issued identification with picture; i.e., passport, national ID card, driving license, residency card, employment permit card, etc. If you do not have 2 forms of ID, you can provide only one and contact email@example.com to arrange for a Skype or google hangout call.
5. Bank Statement: clearly highlighting your name as the account holder (your first deposit to Bitfinex must come from this account).
6. Proof of Address: a statement not older than 3 months from a utility, service company, licensed corporation or government authority clearly indicating your name and residential address.
Order Types – All Possible Advanced Orders Provided
Here are the 3 most basic order types on the site:
- 1. Limit Order – An order to buy/sell at a specified price or better.
Example: If the current market price is 50 and I want to buy lower than that at 49, then I would place a limit buy order at 49. If the market reaches 49 and a seller’s ask matches with my bid, my limit order will be executed at 49.
- 2. Market Order – Market Orders are used when a trader wants to buy at the best price immediately.
- 3. Stop Order – A stop order is used to trigger a market sell when the market drops to your trigger price, or used to trigger a market buy if the market rises to your trigger price.
Example for beginners: If the current market price is 250, the trader in a long position might want to sell if the price reaches 245. A stop sell at 245 will be used in this case.
But they also offer trailing orders and more.
Bitfinex Mobile App
Bitfinex Mobile App is available on the Apple Store and the Android Play Store.
Advantages and Downsides of the advanced Cryptocurrency Exchange Platform
- User Friendly Interface
- Demo Available
- Easy Verification – You only need a phone
- No deposit / withdrawal fees for cryptos
- 11 Cryptocurrencies supported
- Only fiat currency supported is USD
- Recently hacked so a lot of people have doubts about the site. This caused the market cap to fall
- Deposits paused currently
Conclusion about Bitfinex.com
This Bitcoin trading site is recommended to anyone who’s seeking a secure crypto trading platform with professional features. Even though it has been hacked before, the site security has been upgraded over time and it is recovering. The trading volumes are increasing, meaning that people are again beginning to have faith in the site.
Bitfinex has a minimalist style so you won’t have any problem using it. There is also a demo tour explaining every detail about how to use the platform. It’s a good advice to first check out the platform via demo tour. Also, there are even 11 cryptocurrencies available for trading, more than many other Bitcoin trading sites additionally offer. Overall, the site is user friendly, easy to use, and it has a great customer support team and a forum as well.