Crypto Exchange Review: Bitfinex

General Information

Bitfinex is a well-established crypto exchange, being around for the better part of a decade. The company was founded in 2012 and has had quite a turbulent history. It’s been the target of high-profile hackings, harming it severely. However, the cyber attacks seem to have given the exchange some free publicity, as it’s managed to maintain a loyal userbase. We’ll leave the details about the hackings for the security section, and for now, focus on introducing the exchange itself.

Bitfinex doesn’t (and couldn’t if it tried) hide the fact that it’s not aiming to please everyone. The firm wants its user base to consist of high investors that will use the service long term. As such, the account creation and verification process takes quite a while to complete. The exact time users have reported is somewhat inconsistent, although it normally ranges from six weeks to two months.

Further solidifying Bitfinex’s status as a high-end exchange is the minimal $10,000 equity requirement for accounts. The limit, however, was removed, assumedly because it made attaining new customers too challenging. Even with the removal, the exchange isn’t really a viable choice for beginners that want to try their hand at trading. Needing to wait 6-8 weeks is a long time, and although the platform the firm provides is quite user-friendly, there are better alternatives.

In this Bitfinex review, we will have a closer look at this crypto exchange.

Primary Features

Any exchange’s popularity hinges on two things primarily, its reputation and service level. Bitfinex, is definitely well-known in the crypto trading sphere as one of the earliest exchanges. Many early traders continue to use the service as something they’re comfortable with, refusing to explore further. However, the firm also backs that up with some favorable conditions for trading and investing. Here are some of the things that stand out as Bitfinex’s commendable qualities:

·         Fiat Deposits with Bitfinex

While it may take quite a while to unlock the option, fiat deposits are available to users with verified accounts. That makes it much simpler to fund or top off your account after an unlucky streak. The fees aren’t too severe either, unlike with some other crypto exchanges.

·         Margin Trading & Funding

The exchange has a margin trading platform that allows users to both fund and employ margin trading. The funding option lets users earn interest by borrowing their currency to traders that use leverage. Using leveraged trading methods requires specific authorization but allows users to get up to a 3.3x rate increase on their trades.

·         12-Hour Answers

The exchange’s support structure has its operatives available 24/7. Bitfinex also guarantees that any query will get a response within 12 hours, which is relatively quick. However, the broker does note that its responses can have delays in specific situations when traffic is extraordinarily high.

·         OTC Desk

In the interest of a fair and favorable trading experience, the exchange allowed trading via an OTC desk. That means traders can exchange with each other directly, without going through public order books.

·         Lower Fees

Bitfinex’s maker-taker fee structure allows it to provide the lowest fees to its customers. Of course, they can’t do that for everyone, as that’d be a great way to run themselves out of business. What they can do, however, is make fees drop as user trading volumes increase. At massive investment levels, trades entirely free of any charges become a possibility.

Security at Bitfinex

As far as security goes, Bitfinex has had quite a colorful and eventful history. That all started with the first hacking attack, the broker suffered in 2015, losing 1500 BTC. The loss wasn’t too severe financially, although it had a different type of impact. Namely, it exposed that the exchange’s security had flaws, thus encouraging future cyberattackers to try their hand at robbing it. And surely, enough, the following year, they found success.

In 2016, the exchange suffered one of the most significant losses in bitcoin due to hacking. Only second to the infamous Mt. Gox incident, the firm lost a massive sum of 120,000 BTC, severely impacting its financials. Bitfinex managed to handle the situation without damaging its customers, as it paid back the 36% it took out of client accounts. However, even that wasn’t the end of bad news for the exchange.

In April 2017, Wells Fargo froze the exchange’s accounts. Naturally, the freeze impacted the broker severely, making its prices fluctuate wildly. The situation was quite frustrating for clients, as it made them unable to conduct their usual ways of trading. The incident had the broker withdraw from the US.

Even more recently, it was revealed that the exchange had lost access to $850 million as one of their payment processors had its funds taken. Additionally, there are doubts relating to the validity of its funding circulating the Bitfinex. Some seem to think the firm doesn’t actually have all its customer funds and that it’s running on fumes.

As such, even though the exchange has some decent security measures for customers, the overall security measure is relatively low. The broker’s past raises unignorable questions about its integrity and future resilience.

Fees & Conditions

As for the fees at Bitfinex, they’re quite manageable. They range from slightly sub-par with lower personal trading volumes to excellent with higher ones. When trading, the fees follow a maker-taker structure. For makers, the charges range from 0.1% to entirely non-existent, while they hang at 0.2-0.1% for takers.

As for deposits and withdrawals, their charges change depending on the method. There’s no charge for crypto deposits, provided their value is over $1000, while the exchange takes a cut of deposits. The price varies on the type of cryptocurrency you’re taking out and changes over time. There’s a 0.1% charge for bank wire transfers both ways unless you want to speed things up, which bumps the withdrawal fee up to 1%. If there’s a high frequency or volume of bank withdrawals on your account, the charges jump even higher to 3%.

As for the trading conditions, the exchange has quite a solid set. The number of its trading pairs is high, providing decent variety. There’s an option for leveraged trading, allowing for increased earnings with higher risk. The platform also stands out as both simple and powerful, leaving a good impression on most that have used it.

Funding Methods

As we’ve noted before through our Bitfinex review, the exchange has both crypto and fiat deposit methods. The fiat trades happen via a bank transfer, incurring some low fees. It has lower charges for fiat currency than some exchanges do for crypto, which is quite commendable. Moreover, it accepts four major currencies, namely USD, GBP, EUR, and JPY.

It also has crypto deposit options that come free of any additional costs. A particularly useful feature is the ability to buy crypto via debit or credit cards. It allows that via third-party payment processors, such as Mercuryo and OWNR.

Currencies

The exchange has a solid variety of trading options, with over 300 pairs available. The couples put different coins against fiat or other cryptos, and the total unique coin count comes up at above 150. While that’s not as high as some variety-focused exchanges, it’ll prove enough for most traders.

Bitfinex Review: Conclusion

Bitfinex is quite powerful as far as trading conditions go, explaining how it’s stayed afloat for so long. It’s built a strong reputation as one of the industry’s forerunners and maintained that position by providing competitive trading. However, that doesn’t mean it’s without flaw, or even that it’ll offer a universally positive trading experience. For example, novices should steer clear from the exchange, as it’s clearly catered towards experts. That’s because its structure requires high investment and trading volumes to reach its full potential.

Additionally, the website has continuously been a point of controversy and security issues. Some might not mind as they assume it won’t affect them, but it should definitely be considered. As such, we hesitate to recommend Bitfinex even to experts and high-spenders, to whom the experience is obviously catered towards. While Bitfinex has a fair share of beneficial conditions, it feels like you can get the same (or even better) service level at safer firms.