Bitfinex Review and In Depth User Guide
Bitfinex has long been one of the most active cryptocurrency exchanges. In this Bitfinex review, we’ll cover:
- Key Details
- The History of Bitfinex
- How to Use the Exchange
- Available Cryptocurrencies
- Trading Fees
- Operating since 2012.
- Based out of Hong Kong & Taiwan
- Does not accept U.S. residents, but does offer services to most other parts of the world.
- Is consistently a top 10 exchange in terms of trade volume.
- The exchange was hacked in August 2016, with $72 million worth of cryptocurrency being stolen. Users were eventually refunded.
- Available Cryptocurrencies – Bitfinex offers trading for over 35 cryptocurrencies including Bitcoin, Ethereum, Ripple, Litecoin, Neo, IOTA, and more.
- Offers deposits and withdrawals via cryptocurrency, USD bank wire, and EUR bank wire.
- If depositing USD or EUR, you must first verify your account. This process is currently estimated to take 6-8 weeks.
- If only using cryptocurrency, you do not have to verify your account.
- New accounts must hold funds valued at $10,000 or more before being able to trade.
- Fees are 0.2% or less.
- Official Site: Bitfinex.com
In 2012 the Bitfinex cryptocurrency exchange was launched. Controversy immediately surrounded the platform, because it was based on the source code of failed exchange Bitcoinica.
Bitcoinia was a cryptocurrency trading platform that closed in less than one year of operation, due to theft of the platform’s funds.
As the public found out Bitfinex shared much of its code with Bitcoinia, people soon began finding old Bitcoinia exploits in the code.
As Bitfinex grew, they were forced to upgrade and replace the Bitcoinia code.
In 2014 the exchange overhauled its backend through a partnership with AlphaPoint, a white label exchange provider.
Less than a year after their AlphaPoint partnership, the exchange suffered its first hack. 0.5% of its total funds were stolen, equivalent to $373,436 at the time.
Shortly following the hack, Bitfinex announced a new partnership with BitGo. This partnership claimed to offer segregation of customer funds and improved Bitfinex security.
In August 2016, roughly 120,000 Bitcoins (valued at $72 million at the time) were stolen from users’ segregated wallets. The exchange went offline and began an internal investigation. BitGo claimed they were not at fault for the security breach.
It was eventually decided that Bitfinex would remove 36% from all customers’ Bitfinex balances to account for the stolen funds. Customers were then issued a temporary “BFX token”, as an IOU for the USD equivalent of funds taken from their balances. The BFX token was to be bought back by Bitfinex at a 1 BFX to $1 ratio, as the company made new revenue.
In April 2017, Bitfinex announced that it had bought back all issued BFX tokens, thus paying back the 36% its customers had lost. While this was certainly a better result than many imagined, some customers were angered at this outcome. While customers who held BFX tokens got back the same value in USD that they had lost, they missed out on near 2X profits from Bitcoin’s price increase during the time.
As cryptocurrency prices continued to explode throughout 2017, Bitfinex thrived.
Today the exchange continues to rank in the top 10 cryptocurrency exchanges in terms of trade volume, although they have shifted their focus to a more specific user base. New users must now achieve an equity balance of $10,000 or more before being able to trade on the platform. They’ve also ceased serving U.S. customers, as of late 2017.
Just one day after we originally posted this Bitfinex Review, some new troubling news about the exchange surfaced. The U.S. Commodity Futures Trading Commission subpoenaed Bitfinex for their involvement with the company Tether.
Tether offers a cryptocurrency called Tether (USDT) that is supposedly pegged to the U.S. dollar. For every Tether created, there’s supposed to be one dollar held in reserve to back its creation. The issue is that Tether hasn’t provided transparency or proved their reserves through any public audit. There’s further concern that tether has been used to manipulate Bitcoin prices.
Tether and Bitfinex share the same CEO, Jan Ludovicus van der Velde. Tether has been and is also used on the Bitfinex platform.
Assuming you can meet the requirements of Bitfinex, the exchange is somewhat easy to use.
Step 1) Sign Up
When you click the signup button, it becomes abundantly clear Bitfinex caters to serious investors. You’ll need agree to a variety of items before beginning your registration.
Once you’ve agreed to those terms, you’ll see the following signup form.
Step 2) Secure Your Account With 2-Factor Authentication (2FA)
2FA is not only encouraged when using Bitfinex, but when using any cryptocurrency exchange account. 2FA provides an extra layer of security to your account, requiring an additional passcode when logging in or doing other activities on the exchange.
Bitfinex offers 2FA via Google Authenticator, Fido, and SMS text. Personally, we like Google Authenticator.
Step 3) Deposit onto Bitfinex
To make a deposit onto Bitfinex, click the “Deposit” button in the top right corner of your exchange account.
You’ll then see all the available cryptocurrencies and fiat currencies to deposit. Keep in mind that if you want to deposit fiat currencies, you’ll first need to verify your account which takes 6-8 weeks.
Select the currency you want to deposit. For this example, we’ll be depositing Ethereum.
Once you’ve selected the cryptocurrency you want to deposit, you’ll be able to generate an exchange wallet address. Send your chosen cryptocurrency to this address.
Step 4) Trade on Bitfinex
Find and select the trading pair you want to trade through the “Trading” menu. Most cryptocurrencies on Bitfinex are traded against USD, BTC, and ETH. In this example, we’re choosing ZRX/ETH, as we want to trade Ethereum (ETH) for 0x (ZRX).
On the center of the page for your trading pair, you’ll see a chart of its price (1). This can be adjusted to show a variety of data.
In the orderbook, you can see other users buy and sell orders (2).
The order form (3), is where you can place your order. Bitfinex offers a variety of order types, with Market orders being the simplest. For a market order, all that’s required is to enter the amount you want to trade. Once you’ve placed your order, Bitfinex will automatically fill your order at the best available price.
As of writing this Bitfinex review, the platform currently offers trading for: Bitcoin, Ethereum, Ripple, EOS, Bitcoin Cash, Neo, Iota, Litecoin, OmiseGo, Ethereum Classic, aelf, Monero, Dash, Zcash, Bitcoin Gold, ETP, 0x, QASH, Qtum, Time New Bank, Tron, Santiment, Golem, RCN, Status, Eidoo, YOYOW, Augur, FunFair, Streamr, Basic Attention Token, AidCoin, Aventus, Decentraland, SpankChain, SingularDTV, IExec
You can see an updated list on Bitfinex’s homepage.
Bitfinex uses a maker-taker fee schedule, with trading fees starting at between 0.1%-0.2%.
Bitfinex’s fees are competitive with other leading altcoin exchanges.
While Bitfinex was hacked in 2016, it seems users still trust the platform after it paid back customers’ lost funds.
Today Bitfinex is one of the world’s most active cryptocurrency exchanges, allowing you to trade cryptocurrencies for fiat currency and other cryptocurrencies.
Major downsides to Bitfinex include the exclusion of U.S. based customers and the 6-8 week wait time to verify your account if you want to deposit fiat currencies.
Compare Bitfinex With Other Top Exchanges
Subscribe for the latest cryptocurrency news
More Crypto News
Tether (USDT), the world’s most popular stablecoin, is designed to give users the stability of…
Stellar and its XLM token were first launched in 2014 by Ripple co-founder Jed McCaleb.…
Bitcoin Cash (BCH), the controversial project forked from the original Bitcoin client, is now the…