Bitfinex Review: What is Bitfinex?
Bitfinex is one of the earliest cryptocurrency exchanges developed for traders. With advanced trading options like margin trading, derivatives, and OTC, Bitfinex is popular with many active and advanced traders.
Bitfinex ranked 15th in total trading volume in our recent analysis. . The exchange caters to crypto traders across the globe except for the US, Cuba, Ontario, Iran, Syria, North Korea, and a few other regions.
Along with elaborate trading service, Bitfinex has a mobile app, a payment app, a lending service, and several other useful products. The platform has a “learn” section that covers the basics of trading and a few projects. The paper trading feature allows beginners to try trading without staking real money.
- With advanced order types and trading, Bitfinex appeals to many advanced traders
- If we go by the trade volume, it is one of the top 15 exchanges
- Bitfinex doesn’t support traders from the US
Bitfinex: Company Overview
Opened in 2012, Bitfinex is one of the earliest cryptocurrency exchanges. Owned by iFinex Inc, the Hong Kong-based company is registered in the British Virgin Islands. Bitfinex started off as a peer-to-peer Bitcoin exchange. Eventually, the platform started offering more features and expanding into what we see today.
Over years, the exchange has run into trouble multiple times. To begin with, they were unable to secure stable banking relationships with banks. Then, the company had a questionable relationship with Tether. Bitfinex has also been hacked multiple times.
Despite these hiccups, Bitfinex has maintained a steady user base and a rather high trading volume.
Does Bitfinex Have A Token?
Unlike other exchanges, Bitfinex’s native token Unus Sed LEO has a rather interesting history. To begin with, LEO was created to ease the financial crisis that Bitfinex was facing. As the exchange was having difficulties with bank systems, it had deposited funds in Crypto Capital Corp., a financial service company.
However, Crypto Capital Corp. had its own troubles and governments started seizing funds from the company. The exchange tried to cover up the $850 million loss with Tether reserves. Of course, all this resulted in bad press.
To fix this, Bitfinex then released Unus Sed LEO in 2019 to expand Bitfinex’s budget, develop Bitfinex’s ecosystem, and serve customers. With the sale of coins, Bitfinex accomplished its first goal. The token would also cover the Tether deficit.
Out of the 1 billion UNUS SED LEO that were minted, 660 were minted on the Ethereum blockchain and 340 million coins were minted on the EOS blockchain.
For customers, Unus Sed LEO is a utility token. Here’s how LEO holders benefit:
- Coin holders get a 15% discount on commission fees. The discount is applicable on the cryptocurrency pairs.
- Users who have more than 5000 USDT in storage get another 10% discount on the commission fees.
- For peer-to-peer lending, holders get up to a 5% discount. For every 10,000 USDT, holders get a 0.05% discount. So, to get the maximum 5% discount, 1 million USDT needs to be accumulated.
- Users also get rewarded multipliers if their referrals hold LEO worth more than 500 USDT for a month.
- LEO worth 500+ USDT = 1.1x Multiplier
- LEO worth 5000+ USDT = 1.2x Multiplier
- LEO worth 50,000+ USDT = 1.5x Multiplier
Interestingly, Bitfinex issued 1 billion LEO and they would all be burned. As more and more LEO coins are burned, their value is expected to go up. For transparency, the remaining supply and burned supply is displayed live on the Bitfinex’s website.
Bitfinex Review: Pros and Cons
Even with the elaborate trading platform and useful features, Bitfinex falls short in some aspects. To help you decide whether to sign up on Bitfinex or not, here are the pros and cons weighed.
Here are the positives of Bitfinex.
- More suited to advanced traders
If you have substantial knowledge about crypto and if you’re familiar with the stock exchange, then you’ll find Bitfinex exchange’s readouts and trading platform insightful. You get several order types like market, stop, limit, stop limit, trailing stop, and more. Bitfinex also offers margin trading, over-the-counter, and derivatives. Even with so many complex trading options, the interface is easy to understand and navigate.
- Paper trading for practice
Bitfinex lets you mock trade and get a feel of the platform before you decide to sign up. You can find the paper trading option towards the bottom of the homepage under the “learn” tab.
- Low trading fees
Compared to other cryptocurrency exchanges, Bitfinex fees are lower. Many regular traders prefer Bitfinex because of its low fees.
Here are the negatives.
- Not available in the US
Bitfinex does not cater to traders from the US. If you’re a resident of the United States, you will have to look for other good cryptocurrency exchanges. .
- Not beginner-friendly
The Bitfinex exchange might be slightly overwhelming for complete beginners. If you’ve never traded stocks before, the interface might look confusing. Even though the controls are intuitive, it would take a while to get used to them.
- History of hacks and regulatory slip-ups
Despite being one of the largest exchanges, Bitfinex has a history of hacks and fines. The exchange is often associated with one of the biggest crypto hacks. It has often run into trouble with regulatory bodies. For instance, the Commodity Futures Trading Commission fined Bitfinex for illicit “retail commodity transactions in digital assets with Americans.”
What Coins Does Bitfinex Support?
Bitfinex supports over 170 cryptocurrencies. You will find most of the major altcoins, stablecoins, and ERC-20 tokens on the platform. Here’s a quick list of some of the coins available on Bitfinex:
- Shiba Inu
New cryptocurrencies get listed frequently, and poor performers are often taken down. It is always better to check if the token you want to buy or trade is available before signing up.
Reasonable trading fee is one of the strong selling points of the exchange. The taker fees are as low as 0.20%. Based on the 30-day trading volume, the taker fees can be as low as 0.55%.
The fee structure looks something like this:
If you hold LEO, you will gain additional discounts on the fees. With LEO, here’s how much your fees will be discounted:
Bitfinex Deposit Methods
Users can deposit funds via cryptocurrencies, stablecoins, securities, bank wire transfers, and debit cards.
Bitfinex Trading Services Offered
As mentioned earlier, trading on Bitfinex is a bit more advanced. The exchange lets you trade with minimal slippage. Users get access to various order types as well as margin trade, OTC, derivatives, and much more.
For trading, Bitfinex offers Honey Framework, which enables traders to take advantage of trading strategies. Users can create custom orders and access event-driven automated trading strategies with the framework. What’s more, is that traders can easily use the platform.
As you can see, the exchange interface resembles other advanced trading platforms. In the center, you have the main panel displaying selected currencies. On the left, you have tickers for trading, derivatives, funding, and securities.
The order form is located right below the ticker section. You can view the balances and liquidation figures further below the order form. Market depth and order book are located below the central panel. You can collapse many of these sections for a cleaner interface.
The order types available on Bitfinex are:
- Stop limit
- Trailing Stop
- Fill or Kill
- Immediate or Cancel
Users can also automate their orders instead of entering them manually every time. With Scaled Orders, traders can still set the diversity and distribution of the orders.
Other Products Offered By Bitfinex
Apart from the exchange, Bitfinex offers other complementary products to assist your trading. This includes:
- Bitfinex Mobile App
- Bitfinex Pay
- Lending Pro
- Bitfinex Borrow
You can view all their products on Bitfinex’s official website.
Security at Bitfinex has always been a difficult subject after multiple hacks. However, the exchange ensures industry-standard security. To begin with, Bitfinex stores most of its assets offline in cold storage, which is further protected by multi-signatures. Only 0.5% of the assets are available in the online hot wallet for transactions.
The Linux systems that the server network runs on are always up-to-date, and best practices are followed. The database is replicated in real-time in various locations. Finally, DDoS protection shields the exchange from outside attacks.
Bitfinex Hack: How Bitfinex Got Hacked?
The 2016 crypto hack is one of the biggest crypto heists ever. A married couple based in Manhattan, Ilya Lichtenstein and his wife Heather Morgan, tried to launder Bitcoins worth $3.6 billion. The massive breach happened because Bitfinex was using third-party security.
In 2016, the couple stole around 119,756 Bitcoins (worth $72 million at that time) from users’ wallets. However, all the stolen Bitcoins were blacklisted, and the coins were being watched. For years, Lichtenstein and Morgan did nothing with the money.
In February 2022, they tried to launder the money to a digital wallet via some circuitous routes. However, the authorities were alerted, and the duo was caught. Over the years, the couple had managed to use around 25,000 Bitcoins.
How to secure your Bitfinex account?
For the highest security, users can deploy various security measures. Bitfinex supports several measures for user account protection:
- Two-factor authentication: Enable 2FA via Google authenticator or security keys
- Universal 2nd factor: Physical Security Key for U2F protection
- Advanced API key permissions: API keys with specific permission
- Email encryption with OpenPGP: Encrypted email communication for extra protection
- Withdrawals protection: Whitelisting, manual inspection of unusual withdrawals
Apart from this, the exchange also has some advanced verification tools. The system detects logins from different IP addresses and notifies the user. A user can easily block suspicious activity right away. Users can also restrict access to their accounts based on IP addresses.
Bitfinex Review: Customer Satisfaction
Bitfinex is one of the larger crypto exchanges available on the market.
In our recent crypto exchange analysis, we ranked them 15th in terms of total trading volume.
They’re also within the top performers in terms of the value per unique visitor. Which shows that they tend to attract higher value and experienced traders who come back time and time again to use their platform.
All of which shows that Bitfinex is well liked by their users.