Pros & Cons
- Highly secure platform with only one reported attack logged 2016
- Plenty of crypto coins supported to buy and sell
- Full-fledged mobile application available
- Three different wallets offered for maximal control of funds and different altcoins
- Two – factor authentication for secure login
- Low fees (0.100% for both deposits and withdrawals)
- No minimum deposit or withdrawal amounts
- Was hacked in 2016
- No other fiat currency apart from USD supported
- Hack resulted in fall of market cap
Our Expert Rating
Average User Rating
Features
- Crypto exchange with multiple trading pairs
- Leverage trading of up to 3.3x supported
- Traders have direct access to peer to peer trading
- Lenders can earn interest by lending to traders that are looking for leverage trading
- Multiple order types available to facilitate smarter trading
- User interface can be customized as per user preference
- Dual modes – Demo tour and live trading
Exchange Info
- Country Where Bitfinex is Based
- British Virgin Islands
- Established
- 2012
- Available Currencies
- 16 crypto currency trading pairs supported
- Fees
- low to average
- Deposit Methods
- Withdrawal Methods
Bitfinex Crypto Exchange – An overview
Bitfinex is a popular crypto currency exchange website which was founded back in the year 2012. It is registered under the Company Bitfinex Ltd. The company itself is based out of Hong Kong. During its early days, Bitfinex was renowned as one of the top Bitcoin and crypto currency exchange websites and was even listed as the world’s largest Bitcoin exchange by many independent sources. However, 2016 was not a great year for the company. A cyber attack that happened in 2016 compromised much of the site and data and this really set Bitfinex back. The attack essentially resulted in a loss of assets estimated at nearly 70 million US dollars. The assets were directly stolen from user wallets which is what was most concerning.
However, Bitfinex has made a good recovery and has come back strong since the cyber hack. The company greatly upped their cyber security measures and have, as a result, become one of the most secure crypto currency exchanges on the World Wide Web.
Unlike several crypto currency exchanges that only accept Bitcoins or alt coins, Bitfinex allows and accepts the use of US dollars for deposits. This makes it a viable option for first time buyers of crypto currencies.
The website is designed intuitively and the exchange on a whole has several features and advantages that are missing in even the most top crypto currency exchanges in the world. The experience is user friendly and seamless.
Latest news and restricted countries
Due to the amendments to the US laws with regards to verification required to allow crypto currency trading, Bitfinex has been left with little option but to stop the onboarding of new American users and suspending all US user accounts temporarily. However, the restriction is expected to be lifted soon and new ID requirements are going to be employed by the crypto exchange as mandated by US regulations.
It needs to be noted that when it comes to cryptocurrencies and cryptocurrency trading, the whole concept is still in its infancy. Though well established as a system and peer to peer payment solution in itself, state laws in every country are different (sometimes substantially) with regards to crypto currencies and crypto currency trading. In fact, some countries simply don’t even have laws pertaining to the subject matter at all. Considering this, there are some countries which ban crypto currency exchange platforms such as Bitfinex. Bitfinex is currently not available to IP addresses originating out of
- Bangladesh
- Kyrgyzstan
- Bolivia
- Ecuador
The hack in 2016 – what you need to know
As mentioned, Bitfinex was undoubtedly one of the best, if not the best, crypto currency exchange website. It took a major hit in August of 2016 when cyber criminals were able to make away with assets estimated to be worth in excess of 70 million US dollars. This has gone down in the history books and till date remains the second biggest cyber breach in terms of amount of Bitcoin lost.
Consequentially, Bitfinex had a hard time coming back as a lot of users stopped using their services and most of them chose other crypto currency exchanges to sign up with. It also thwarted potential users from doing business with Bitfinex. Furthermore, this single cyber breach resulted in a plunge of the price of Bitcoin by a staggering 20% almost overnight.
However, Bitfinex has responded to the attack in a commendable manner. They have tightened up security measures by several folds since the attack and now have some of the most robust security protocols and features in place that are proactive rather than reactive. Also, they strategized extremely well by making up for their users’ losses by offering platform tokens of equivalent value of their own in house crypto coin. In the first quarter of 2017, Bitfinex was able to buy back all these tokens once they had the funds and resources in place.
The market cap is still not back to where it used to be, but there is no denying that it is on the rise, slowly but surely.
Why Bitfinex is in the CoinTrust Trust list
Given that Bitfinex has been subjected to random third-party auditing by reputed auditors and the fact that it is now one of the most secure crypto exchange platforms in terms of cyber security and data privacy, there is no reason to doubt the legitimacy or integrity of Bitfinex. Despite the hack in 2016, Bitfinex is in the CoinTrust list for several good reasons.
The fact of the matter is that the same attack could have compromised any crypto currency exchange during the time. The only difference is that Bitfinex were a better target simply because they were a more well-known exchange website across the world and had a lot of users and consequentially a lot of wallets which meant that the attackers could do away with tons of money.
Furthermore, Bitfinex now has two – factor authentication which essentially means that it is near impossible for single accounts to be compromised as the login logic no longer depends on just one piece of information. Even if a cyber criminal was able to most ingeniously acquire your password, they would still need to get through a second security layer, which is designed to reconfirm your identity via another source. This is why Bitfinex urges their users to get two – factor authentication setup on their accounts.
How does Bitfinex fees work?
Crypto currency exchanges, for the most part, are vastly different from forex brokers in terms of fees charged. Cryptocurrency exchanges generally impose fees which are dependent on the order type and not just the amount of the transaction.
Essentially, it all depends on whether you are adding liquidity to the market and the commodity or taking away from it. Understandably, fees are inversely proportional to liquidity. If you are adding liquidity to a crypto coin, then your fees will be on the lower end, and vice versa, if you are taking away liquidity from the market then your fees will be on the higher end of the spectrum.
While the percentage of the fee depends on the above, the fee amount itself is calculated by applying this percentage on the transaction amount. For takers, the fee is generally 0.20% and for makers the fee is 0.10%,
Further, there will be some additional borrowing fees for short selling and these rates depends on Bitfinex’s internal platforms peer to peer financing feature. What you should note and remember about short selling on Bitfinex, is the fact that you may not borrow over 70% of your complete position.
The Bitfinex trading platform
Currently, Bitfinex is available as a web based application that registered users can log into using credentials and two – factor authentication (if setup) and also a mobile based application where the same credentials will suffice as well. The mobile application is available for both iOS and Android devices and it is responsively designed which essentially means that it supports most standard smart phone and tablet screen sizes.
There are plenty of live charts and graphs which help users quickly comprehend trends, current values. There are also several other handy pieces of graphical information such as indicators, Fibonacci tools, trend lines and more.
The order book at Bitfinex is transparent in nature and there is always plenty of activity and transactions taking place to which you have a real – time ledger access.
Bitfinex deposit and withdrawal options
Most first time crypto buyers and investors will invariably need to find a way to convert traditional fiat currency to crypto currency. A lot many crypto currency exchange platforms these days don’t support any fiat currencies at all and so they are out of the question for first time users. However, Bitfinexsupports US dollars. This means that you can convert your fiat currency of choice to US dollars and then proceed to buy any of the several altcoins supported and offered by Bitfinex. Please note that the only way in which you can deposit US Dollars to your Bitfinexaccount is through bank transfers and this will require verification. With that in mind, while you are able to buy crypto coins or Bitcoins at Bitfinex, it is not exactly the best way to buy into crypto for the first time. You may find it cheaper and quicker to make transactions or purchase Bitcoins through a local exchange wherein you can use your fiat currency of choice for minimal losses during the currency conversion process.
The minimum fee for making deposits using wire transfers or bank transfers at Bitfinex is $20 or 0.1% of the transaction amount, whichever is higher. Therefore, the more ergonomic way to use Bitfinex would be to first buy Bitcoin or any other altcoin with a local trader and then deposit crypto into your Bitfinex account or wallet and use that for future trading.
A good tip to deposit your first crypto coins after you have purchased them from a local fiat to crypto currency exchange or trader would be to time it in such a way that you make the deposit when holding altcoin is at its higher end value. Another inherent advantage of transferring crypto coins to your Bitfinex wallet instead of fiat currency is the fact that with crypto coins, there is no verification procedure involved. Therefore, it is not only more inexpensive than fiat currency deposit, but also much quicker.
Closing thoughts
Despite being victim to the second largest Bitcoin breach in history, Bitfinex has not only managed to survive in the market, but they are back on the rise. They held a firm position as one of the best and biggest crypto currency exchanges prior to the hack of 2016 and it seems like they are on their way back to acquiring this status.
For people interested in trading altcoins for altcoins, this is an unbeatable exchange platform. The tools on offer here are handy, and will help you make profitable decisions and moves at the end of the day. The fact that the mobile application is full fledged and responsively designed means you can stay connected to the crypto currency universe even while on the move.
The only caveat with Bitfinex is that it is not the best when it comes to trading altcoins for crypto coins, a local trader would be a better suited option for such a transaction.
Every dark cloud has a silver lining and the hack of 2016 has resulted in Bitfinex now becoming one of the world’s most secure online crypto currency exchanges.
AuthorDavid Nugent
David is a forex trader and writer who has spent the last few years giving his opinion and spreading news about oncoming markets and trading tips. Besides from being a trader he is also a lifelong Everton fan and enjoys spending free time watching his beloved team in the premier league.
