Cryptocurrencies for trading
BTC, XRP, ETH, LTC, BCH + over 50 more
Guarantee stop loss
Negative balance protection
Withdrawals: variable (crypto)/none (fiat)
Trade Costs: 0% to 0,20%
Poloniex is different from other exchanges in many aspects from other cryptocurrency platforms. Since its start, startup dubbed itself as an Ethereum heaven. It is a place where clients can trade, buy and sell ETH and many other coins as well.
We made a review of the Poloniex exchange with an aim to provide you with essential information about the platform. We investigate company’s deposit methods, fees, verification requirements, trade functions and currencies. We compare the findings with other, similar exchanges such as Bitfinex, Kraken, CEX.io, Bitstamp, and BitMex. Lastly, we provide pros and cons as to benchmark the results with the industry.
General Information about Poloniex
The platform established its operations in 2014 by an unknown group of entrepreneurs, bent on providing simple yet attractive cryptocurrency services. Since its start, the ownership was the topic of talks, as many traders raised suspicions on the lack of names.
The representatives that established the platform by introducing new coins on yearly basis but are yet to reveal themselves. The reason why such information was not disclosed is simple – to avoid regulation and tax implications. Thus, it is important to keep vigilance and not to store all of your asset in one basket. The exchange might go default at any time.
Anyone with coins can deposit them in Poloniex and trade with available pairs. Service is globally available, not limited to any country in the world with exceptions of those that have banned cryptocurrencies.
The support section of the site is nothing out of ordinary. You have FAQ and ticket section where you can post up your issues. The information provided by the support’s FAQ is extensive but so are FAQs of other exchanges as well.
Registration and Verification Processes
Registering an account at Poloniex takes less than 2 minutes. You provide the usual information and set your own password and email. The county you select sticks with you for the entire time you have the account. Thus, if you are serious about the trade at Poloniex, you should provide the region your ID reflects, as presented below.
Identity check is mandatory for trade, meaning that you are not able to use exchange or margin trading functions if you remain unverified.
The verification process starts with your personal details, specifying your first & last name, address, and phone number. In next step, computer camera should be available, as a platform will take a snapshot of you holding the ID document.
The process in other exchanges does not include webcams since you simply need to upload the documents. Since many countries are pushing for larger regulation and control over the market, many platforms impose the verification on its users, Bitstamp being a famous example. There are still others that allow completely private transactions, such as Bitfinex and BitMex. Others would limit the deposit and withdrawal amounts, examples being CEX.io and Kraken.
Most of the verification-demanding platforms require scanned ID without a selfie. Thus, we deem that Poloniex has a very low level of privacy when it comes to trade.
If you are looking for a plain old fiat-to-crypto currency exchange in Poloniex, you will be disappointed. The platform does not accept USD or EUR transactions in trade. You will not find even information about the coins’ value expressed in any fiat currency.
Exchanges that we use for comparison, Bitfinex, Kraken, CEX.io, and Bitstamp use fiat currencies in trade. The other exception is BitMex but they at least offer market value of coins in terms of USD and Yen, even though you cannot deposit or withdraw them.
Cryptocurrencies, on the other hand, are a completely different story. There are over 50 coins that you can use to actively trade with them. Trading pairs come in even bigger number, as you can pair BTC, ETH, XMR, and USDT with other coins.
The downside of the coins offered at Poloniex is that many of them are new. They can get delisted anytime if trade volumes are not sufficient.
Other exchanges do not have that many trade pairs nor that many coins at their disposal. Kraken, BitMex, and Bitfinex offer up to 20 coins for a trade. CEX.io accepts 6 cryptos and Bitstamp 4 cryptocurrencies only.
Deposit & Withdrawal Methods
If you got used to bank transfers, credit cards, and e-payment systems being available for deposits and withdrawals, then Poloniex would not be a platform for you. The exchange accepts deposits and withdrawals expressed only in coins, with 50 of them being available for such transactions. There are no costs concerning cryptocurrency deposits and withdrawals apart from miner fees.
Poloniex is similar in this aspect with BitMex, with the difference being the number of coins that you can deposit and withdraw from the platform. Other exchanges like Kraken, Bitstamp, CEX.io, and Bitfinex have at least one fiat currency (usually USD) available for deposits/withdrawals.
Exchange Rate and Trade Fees
The exchange rate is narrow, as it depends on the platform’s coin evaluation and on the buy & sell order books. The difference between the two sides of the trade is smaller than 1% which we deem as fair. The exchange rate on crypto-to-crypto trade pair also reflects near industry averages, as the picture down shows.
With exception of BitMex and Bitfinex, other exchanges like CEX.io, Kraken, and Bitstamp have a wider range, as they are mainly concerned with fiat-to-crypto trade pairs. These exchanges make money through the said rate and are unfavorable when compared to Poloniex.
As for the liquidity, popular coins like BTC, ETH and LTC have sufficient volumes for most trade desires. Less known altcoins do not have such a support, meaning that their liquidity rate and daily trade volumes are low.
The only real fees you will have on this platform are trade fees, organize into the maker and taker structure. It is up to you which side you will choose while fees range from 0.05% to 0.25% for taker orders and from 0% to 0.15% for makers. The percentage depends on the monthly volume you achieved previously.
These fees are in line with other exchanges, as all five of them have maker/taker fees ranging from 0% to 0.35%.
Available Trading Platforms
Since its operations start, the company did not release any other platforms apart from web browsing one. The phone users cannot access the website without difficulties but there are no iOS or Android apps ready for download. Instead, the developers made different web browsing interfaces for desktop and mobile users.
BitMex is the only other exchange that also does not offer mobile apps. The said platform does not have different styles of desktop and phone users. All other companies offer mobile apps for their users. CEX.io, Bitstamp, and Bitfinex offer both Android and iOS applications for free download. Kraken offers only iOS app at Apple Store, though it is still one up on Poloniex.
Poloniex uses trade widgets and price charts as to present the value of coins being used in transactions. The charts can show different value analysis such as Fib levels and Bollinger band. These tables cannot be moved around nor can lines change color. The time period of the price chart is changeable from minutes to a month. Order books are simple and change in real time, with new orders, uploaded the second they are live.
Although presentable, there is very little flexibility with the Poloniex’s interface. Various trade functions also do not have hidden comments or explanation, leaving beginners to learn about them either on their own or through FAQ section.
Kraken and CEX.io have similar issues with the interface. With both Kraken and CEX.io, it is easy to understand but nothing can be moved or downloaded while charts cannot change their appearance.
Bitfinex, Bitstamp, and BitMex are different in that aspect, as interfaces are highly flexible. Charts can be downloaded and moved while numerous hidden explanations follow up the trade functions. You can also change the appearance of charts if you find it inadequate for your needs.
Poloniex offers two products for clients to use when trading cryptocurrencies. The first is a regular exchange where coins are swapped around according to the market’s exchange rate. The trade functions available for the exchange is stop-limit, where you specify high or low limitations on the price you wish to get. The function is used when the market fluctuates greatly as to limit the potential loss.
Here you have basic buy and sell trades and order book below the widget showing historical transactions of other users. The regular exchange has the largest number of trading pairs, with main coins being BTC, ETH, XMR, and USDT. Each of these cryptocurrencies has their own pair lists, with BTC being the most supported in terms of altcoin pairing.
The simple exchange product orients towards beginners or for traders looking for instant transactions to capitalize on favorable market trends.
Margin trading platform also uses buy and sell functions, together with a stop-loss feature with leveraging being an additional tool. The said leveraging levels up to 2.5 times of the order value. You can additionally set loan rate if you wish to borrow coins from others, depending on the lending market situation. The margin trading is oriented towards more experienced players in the market but in our opinion, experienced traders would find the functions lacking scope.
All in all, margin trading at Poloniex differs very little from the regular exchange, with differences being loans and leveraging. When compared to other exchanges, it is clear that Poloniex has only few margin trade tools available. BitMex and Bitfinex offer a wide variety of functions for its margin trading, with several more leveraging levels. CEX.io, Bitstamp, and Kraken have similar functions and leveraging as Poloniex. All exchanges implement instant trade exchange and margin trading.
What pushes Poloniex in front of other cryptocurrency platforms is its lending market. Thus, the function allows you to lend out and borrow coins, depending on the trading strategy you wish to use. Lending out would allow you to make additional revenues from coins you would not trade now. Borrowing allows you to trade with coins you do not possess at the moment.
You set the interest rate for the borrowed coins and wait up for interested parties to take on the offer you created as shown below.
Apart from Poloniex, only Bitfinex offers lending marketplace with similar features for both lenders and borrowers.
When it comes to security functions, Poloniex has a small amount of them compared to other exchanges. The two-factor authentication (2FA) is available on all platforms and is thus considered as a common tool to use, with picture down being an example of the function.
API keys present only two tools as well, “Enable trading” and “Enable Withdrawals”. All other exchanges have several functions for you to use, GET (Kraken) and WebSocket (BitMex, Bitfinex, CEX.io, and Bitstamp) being examples.
In addition to the lack of security functions, Poloniex was reportedly hacked in the past, resulting in 12% of lost bitcoin volumes. The 2014 incident puts a dent in the trust traders have, thus we would strongly recommend not to keep large amounts of coins in the exchange.
Pros and Cons
In this section, we summaries all advantages and disadvantages Poloniex has over competitors In terms of pros and cons.
- a large number of cryptocurrencies and trading pairs available
- the fair exchange rate of coins
- lending platform available
- the verification process requires video selfi with you holding documents, thus not private at all
- no fiat deposits or withdrawals available for traders
- mobile apps not available for download
- margin trading lacks functions
- security lacks adequate functions and API tools in addition to a hacking incident in 2014
Overall, we conclude that Poloniex suits beginners the best. We recommend using small volumes as to learn how to use tools of the trade and how to properly analyze the market. Exchange rates are fair and you have small fees. You can also use lending marketplace as to earn revenue on the side, which is a rare platform to have in the industry.
Veteran users, on the other hand, would find a lot more to do at other exchanges. Bitfinex, Bitstamp, CEX.io, Kraken, and BitMex all have more than one cryptocurrency to use, several pairs and a lot higher security than Poloniex. The margin trading lack tools, functions, and fiat deposits, none of which is available on the platform. Experienced investors would thus not find anything interesting on this platform.