Introduction: When it comes to cryptocurrency exchanges, Bitfinex is a well-known exchange with a somewhat dubious history. In this comprehensive review, we look at all aspects of Bitfinex to see how it compares to other exchanges.
We cover everything from the products and services offered by Bitfinex to the security features they provide. So whether you are looking to sign up for an account with Bitfinex or just want to know more about this exchange, read on!
Bitfinex is a centralized cryptocurrency exchange that offers spot and derivatives trading services to over 180 cryptocurrencies like BTC, ETH, SOL, and ATOM. Bitfinex was founded in 2012 by Giancarlo Devasani and Raphael Nicolle in Hong Kong but is today registered in The British Virgin Islands.
Bitfinex has been embroiled in various controversies over the years and is today owned by Ifinex, the same company that owns Tether, the largest stablecoin in the world by market cap. Bitfinex is available in most countries besides a few prohibited jurisdictions such as the United States, Iran, Cuba, and a few other countries.
Bitfinex: Signup & KYC
Bitfinex's signup process is quite time-consuming and contains more steps than other cryptocurrency exchanges. To signup, users must provide their email, username, and country of residence. In order to complete the signup process, users must also enable a Google Two-Factor Authenticator. With this Basic Signup Level, users can deposit and withdraw cryptocurrencies, trade, and access the OTC market.
Basic Plus is the next level of verification which takes 10-30 seconds to complete. In this step, users must add an official photo ID, biometric selfie, phone number, and address. In order to access the majority of the features on Bitfinex, users must complete the Intermediate Verification Level which includes additional information such as second photo identification, proof of address, financial questionnaire, and KYC declaration.
The final verification process is the Full Verification where users also have to add a bank statement in order to be able to do international bank transfers.
Bitfinex: Products & Services
Bitfinex offers a variety of products including cryptocurrency trading, margin trading, and decentralized exchange.
1. Bitfinex Spot Trading
Bitfinex offers spot trading for users who want to buy and sell over 180 cryptocurrencies like BTC, ETH, XRP, ADA, SOL, and many others. The most common trading pairs on Bitfinex are USDT, USD and BTC.
2. Bitfinex Margin Trading
Margin Trading involves borrowing funds to enable traders to use more money than they have to leverage their holdings. By getting funding from the peer-to-peer margin financing system, Bitfinex enables users to trade with up to 10x leverage. Bitfinex's P2P funding market allows you to borrow funds to open long and short positions.
3. Margin Funding on Bitfinex
Users can earn interest by providing funds on the P2P platform for traders to use in Margin Trading. Users can manually decide on the rate, period, and amount that they wish to offer.
4. Bitfinex Derivatives Trading
Traders can speculate on the future price of an asset by purchasing or selling derivative contracts. Derivatives can offer a greater return than if the underlying asset had been purchased directly. Depending on the derivative pair, Bitfinex offers up to 100X leverage. BTC, USDT, and EURT can be used for collateral and the allocated position must be at least 1% of the notional value. This means that if you have 100 USDT in your wallet, you can use it as collateral to open a position with a leverage of up to 1:100 ($10,000).
5. Bitfinex Staking
Staking is a good way for users to earn interest on their cryptocurrency holdings with very low risk as the assets are kept in cold wallets. There is no minimum amount to begin staking and there are no fees, instead, Bitfinex keeps a small portion of the staking rewards. Staking rewards on Bitfinex are paid out weekly and are available for cryptocurrencies such as TRX, EOS, XTZ, ATOM, SOL, MATIC, ADA, DOT, ETH 2, and KSM. While it's easier to earn staking rewards on a centralized exchange, you will always earn a higher reward if you stake directly with the underlying blockchain yourself.
6. Bitfinex Borrowing & Lending
P2P lending offers a way for lenders to earn interest while it gives borrowers the flexibility to meet their needs. The minimum amount that can be borrowed is $100 and the maximum amount is $250,000. The borrowed funds can be used both internally on the Bitfinex platform or externally to fund purchases in the real world.
7. Bitfinex Token
The native utility token of the Bitfinex exchange is called LEO and provides its holders with a reduction in platform fees of various kinds.
The LEO token currently sits at 20th place on Coingecko with a price of $4.50 and a fully diluted market cap of $4.2 billion. The total supply is 985 million tokens with over 90% of the already being in the circulating supply. Most of the trading volume for the LEO token occurs on the Bitfinex exchange as the token is not listed on many other exchanges.
Like many centralized exchange tokens, the LEO token incorporates a deflationary buy-and-burn mechanism that reduces the number of LEO tokens in circulation. Every month, iFinex and its affiliates buy LEO tokens from the market equal to a minimum of 27% of the consolidated gross revenues.
Anyone considering using the Bitfinex exchange should be aware of the fees that are associated with it. In order to minimize your trading costs, it's always good to compare fees between exchanges.
2. Bitfinex Spot Trading fees
Bitfinex trading fees for regular crypto-to-crypto or crypto-to-fiat trading have a 0.1% fee for Makers and a 0.2% fee for Takers. You are considered a Taker whenyour order is executed immediately and a Maker whenyour order is not immediately matched. If you buy BTC for $100 and the trade gets executed immediately (Taker), you will pay $100 * (0.2/100) = $0.2 in trading fee
3. Bitfinex Derivatives Trading fees
Bitfinex trading fees for derivatives are 0.02% for Makers and 0.065% fee for Takers.
Like almost all other exchanges, Bitfinex does not charge any fees when depositing cryptocurrencies. Fiat deposits can be done on Bitfinex via Bank Wire 0.1% fee (min 60 USD/EUR) or via Bank Wire through OpenPayd (0.5 EUR/GBP transaction).
Bitfinex: Withdrawal Methods
Withdrawals on Bitfinex can be done either by withdrawing cryptocurrencies (BTC/ETH) or fiat currencies (USD/EUR). For fiat currencies, the following withdrawal options are available:
Bank wire: 0.1% Fee (min 60 USD/EUR)
Bank wire OpenPayd: 0.5 (EUR/GBP) per transaction
Express bank wire: 1% Fee (min 60 USD/EUR) and delivery within 24 hours
For cryptocurrencies, we have compiled the withdrawal fees below for a set of popular cryptocurrencies:
BTC: 0.0004 BTC
ETH: 0.0017 ETH
USDT (ERC-20): 2.5 UDT
Bitfinex: Apps & Wallet
The Bitfinex mobile app offers on-the-go trading and provides the same features that are available on the Bitfinex platform. These features include spot and derivatives trading, staking, borrowing and lending, and portfolio management. The Bitfinex app has over 100K downloads on the Google Play store with a 3.8-star rating based on 2,600 reviews.
Is Bitfinex Safe?
The Bitfinex team breaks down its security measures into two categories, platform security and user account security measures.
In terms of platform security, Bitfinex secures users' funds through the use of a cold wallet that secures 99.5% of all user's funds in an offline multi-signature wallet held by management across multiple geographical areas. Their hot wallet maintains the remaining 0.5% of users' funds that are used for transactions and withdrawals.
Bitfinex also provides DDoS Protection and another type of penetration testing on a regular basis to ensure that their systems remain secure.
Email on login
IP address whitelist, detection, and withdrawal monitoring
Custom withdrawal check
Suspicious activity detection
Bitfinex experience a hack in 2016 where almost 120,000 Bitcoin were stolen from the exchange. All customer of Bitfinex had their account balance reduced by 36% and received BFX tokens in proportion to their losses.
Bitfinex offers customer support through their help center, 24/7 live chat, contact support page, and phone. Their help center provides 100s of helpful articles with in-depth answers that cover most questions. For corporate and high-volume traders, there is a dedicated customer support team available. You can also receive additional support by visiting these Bitfinex social media channels:
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Jack is a crypto writer and reviewer who has been active in the space since he caught the crypto bug in 2017. With a passion for trying out new shiny things, Jack is always eager to try the latest cryptocurrency exchanges, wallets or DeFi applications.