This Bitfinex review will take you through the whole platform. With growing network and value, Bitcoin became quite a trendy asset to possess and talk about nowadays, especially now that value has risen over 300% in the past few months. Thus, many investors are seeking reliable and safe sources where they can get Bitcoins and sell them later on for a good price in order to make a good profit from the trade. This article reviews Bitfinex in terms of its trade, security and reliability, providing you with necessary information about what you should know about the platform, what tools are available and how safe the exchange is for your investments.
Since the start of its operations, Bitfinex has only accepted bank wire transfers as a method of funding. Take into account that bank wires might take up to few days to complete. We view this as a limiting factor when considering competitors, as many other platforms offer a variety of deposit methods, especially since bank transfers can take really long time (up to 5 business days) to reach your Bitfinex account. Bitfinex also accept any cryptocurrency deposit.
The fees are divided into three separate sections: order execution, deposits/withdrawals and margin funding. Order execution is divided into maker and taker fees, structured according to the value of your transactions for the past 30 days. The maker fees range from 0.1% to 0% while taker fees can range from 0.2% to 0.1%.
All coin deposits are processed for free while wire deposits would cost you 0.1% of the money you have sent. Withdrawal costs are presented below:
Margin funding costs are divided into fees collected by providers (15% of active margin funding contacts) and fees collected by providers when the offer is hidden (18%).
Overall, when compared to other exchanges, the fee structure at Bitfinex is quite cheap, as the total cost of the bitcoin purchase can go up to 1.3% (bank withdrawal included) of the total cost.
Apart from username and password, you have additional security feature in two-factor authentication (2FA), which we would highly recommend using. The said tool poses as another safety layer between you and hacker, as only the owner of the account and phone number can enter the account and work with funds deposited there.
Other security measures are:
- withdrawals lock if new IP address enters the account;
- withdrawal confirmation;
- PGP email encryption;
- disable “Keep Session Alive” if the user uses the public device.
The security features are quite welcoming, especially due to the fact that platform was hacked in 2016, resulting in over $72 million loss for traders. The tools available are sufficient to protect your account from unwelcomed guests to your account.
Wallet services are concerned with basic stashing tools, where you can deposit, transfer and keep both fiat money and cryptocurrencies. There are no special features that could be said about this service, making this part of the exchange somewhat undeveloped. Additional services, such as vault services and security features are desperately needed to properly protect trader’s balances.
Bitfinex Trade and Features
Bitfinex offers six main features for its clients that you should know about when contemplating bitcoin trade at its platform:
- margin trading;
- margin funding market;
- order types;
- customizable interface;
- API platform.
As with every other exchange out there, you create order by clicking “Exchange Buy” and post your buying order on the platform, waiting for the fellow trader to pick up the price for offered volume. What pushes the Bitfinex away from the crowd is its size; it is considered as the top BTC/USD marketplace in the world, with large BTC orders possible due to the deep liquidity of the market. Another important feature of the exchange service is that you do not seek out the sellers – system does that for you and only in case if they have funds/bitcoins in their account, making it quite safe environment for you to work with.
Order types are tools that help traders execute their orders in the Bitfinex platform, them being:
- Limit – specification of price level;
- Market – instant execution of the order;
- Stop – instant closure of order;
- Trailing Stop – definition of price when trade starts to incur loss;
- Fill or Kill – order must be completely filled or be canceled;
- One cancels Other (OCO) – pair orders released as to provide multiple choices for traders and avoid straight kill option if one is not filled;
- Post Only – posted when trader wishes to pay maker fees – order is posted and awaits system’s response to whether it should be posted or canceled depending on the market needs;
- Hidden Order – order which is not shown to traders;
- Iceberg orders – similar to hidden order, as part of value is hidden while another part of order is visible;
- TWAP - Time Weighted Average Price is an order dividable by multiple orders consisted of specific values and period of trade.
As you can see, there are quite a few functions that you can use when trading the bitcoins. All of them are useful in certain situations – it is the trader’s experience that will finally make or break a deal when using them!
The margin trading allows investors to buy and sell bitcoins at the value they wish to limit. There are several options for margin trading:
- short position (typical margin buy and sell functions as system matches buy and sell margin orders; starts with selling and ends with buying position);
- long position (exactly like short position except you start with buy position and end with selling position);
Be sure to know that you are allowed to put 30% of your funds into margin orders by the system as a maximum value. If the net value of your balance reaches 15% of the beginning balance in your wallet, the system will forcefully call your order, incurring losses from your trade.
These limitations can be quite bothersome, especially when market plays weird (and it almost always does), leaving a large chance for you to lose the money. We feel, although sufficient for most needs, that a little smaller balance limitations should be implemented, as 30% of the balance is a quite high number to have your order canceled and funds lost.
Margin Funding Market
This is very interesting feature that you should totally check out! If you incurred some losses or have funds lying around unused, you can use short-term loan facility and lend money or coins to Bitfinex through margin funding.
If you, on the other hand, need funds, you can post an order for margin funding and get the loan as system matches with a trader that loaned out their money for you. It is quite a safe way to make money even though if the profits are small. You’ll need all the funds you can get and this function is very rare gem to find in other exchanges.
The lending service is available in different cryptocurrencies and USD as fiat money while the lending fee of 15% is charged on the interest amount you have received. The interest rate itself depends on the market, and can go between 1% to 15%.
Once registered, you can move parts of the page around, like moving Trading Sidebar left or right, organize order book columns, set table preferences, make chart shorter or longer and much more. We find this feature very funky since you can play around and design your own space that you are comfortable with.
Let’s take a look at charts for example; you can edit the candies colors, increase or decrease the thickness of price lines, change scales, background settings and much more by clicking the “Chart Properties” button. It is possible to save and load chart setting loads as well as make screen shots for later analysis.
Through Bitfinex API tools, you can create your own charts, monitor and edit your orders and positions, track your trading history and wallets movements.
This is quite cool feature as it allows you to create your own little platform within the Bitfinex platform.
The advanced settings in case of maintenance and alarm system pointing out when order book is about to get canceled can really help you keep track of things when you put multiple orders around. The GET requests can be conducted in range from 10 to 90 per minute, which is quite enough in our opinion, as you probably won’t be making that many actions within 60 seconds only.
Overall, Bitfinex is a safe place to buy, sell and stash your coins as long as the volume is not large (over 1 BTC). The hacking incident in 2016 serves as an eye-opener for the future traders to always take caution when dealing with cryptocurrencies.
Numerous features are geared towards advanced users and although very useful, beginners might find the margin trading at Bitfinex a bit too complicated for their tastes. On the other hand, if you are looking for larger volumes at a cheaper price, then Bitfinex is quite a good choice for you, with many trading tools at your disposal. So, the final verdict is – ABOVE AVERAGE though certain improvements are needed, especially in wallet services.
- good security tools and features (after the hack);
- low transaction fees when compared to competitors;
- no verification is needed for trade;
- exchange is carried out by system with little chance of scams from fellow traders;
- sufficient number of order type functions;
- possibility to move around interface and use API tools to create your own platform;
- margin funding market available.
- was hacked in the past;
- limited purchase methods offered;
- high 30% limit on balance during margin trading;
- interface might be confusing for starters;
- wallet services pretty basic.