If you want to invest in the cryptocurrency market in 2021, there’s good news for you! Many cryptocurrency enthusiasts claim that 2021 will be the best year to invest in cryptocurrencies, and it’s not very difficult to see why.
When it comes to figuring out what crypto to invest in, the choice can often be overwhelming as there are thousands of cryptocurrency coins available in the marketplace. It’s challenging and time-consuming to do your research and select the worthy ones from the unfruitful ones.
What Is Decentralized Finance (DeFi)?
DeFi refers to Decentralized Finance. According to a statement by Alyssa Hertig published on Coindesk, “DeFi is referred to as an umbrella term for different financial applications in cryptocurrency or blockchain that are having an impact on financial intermediaries.” It allows investors and traders to connect promptly without the intervention of a broker — a third party who profits from the deal.
So, why is decentralized finance a big deal?
According to Forbes correspondent Jeff Kauflin, DeFi is the concept that crypto investors or entrepreneurs can rebuild traditional financial tools in a decentralized architecture, outside organizations’ and governments’ control.
Crypto entrepreneurs are developing a trustless infrastructure where people can get away from organizations that inflate prices to earn profit and manipulate things for their benefit, which is what cryptocurrency is all about from the very beginning.
People can expect to see the slow disappearance of brokers over the next few decades and more power to independent traders and investors. By doing this, there will be huge gains for independent traders as there will be very few fesses and the market will be easier to infiltrate.
Now that we’ve talked about decentralized finance, let’s see what Bitfinex is.
What Is Bitfinex?
If you want to make money trading Bitcoin, Bitfinex is the right place. However, there’s a lot you need to understand before you dive deep into it. In this article, we will discuss the features, fees, limits, and verification of Bitfinex. Moreover, we will look into the important aspects of why the cryptocurrency community is curious to know more about this popular exchange.
Bitfinex is one of the world’s most advanced, exclusive, and liquid cryptocurrency exchanges. With a non-stop order book, elite trading tools, margin trading, and an immense spread of coins, you can make a significant amount of money here. However, its hurdles to entry are pretty high, so you better be prepared. It’s the second-most popular exchange in the world, with a 24-hour volume of more than $2 billion dollars, so get ready for some serious action and surprises.
Features Of Bitfinex
Let’s get started with the features of Bitfinex.
Bitfinex is very serious when it comes to security and deploys several advanced security features. In any case, it previously experienced hacks in the past that it managed to get past by upgrading its security services.
Trading options, advanced tools, and charts go hand-in-hand with a super-fast engine and several trading pairs. This exchange is one of the most favorites amongst traders for its extraordinary trading experience.
The exchange is challenging to grasp for beginners, and you won’t be able to use it unless you have $10,000 in equity in your account. So, not exactly the best place to start.
This exchange implements a trader-friendly trader-free schedule and charges genuine withdrawal fees in comparison to competitors. Fiat deposit fees are also low at around 0.1%. Let’s dive deep into it.
Bitfinex fee structure is a bit different from the average applying a maker-trader fee model. The maker-trader includes liquidity in the exchange environment, and a taker is the one to remove it. Trading fees start at 0.2 percent for the taker and 0.1 percent for the maker. The initial downfall in fees is at $500,000 traded, which is a pretty high amount in comparison to the other exchanges.
As the monthly trading volume increases more, the fee is reduced accordingly. Last but not least, with over $30 million traded, the fees decline to 0 percent for the maker and 0.55 percent for the taker. Bitfinex charges an additional fee for minuscule deposits which are even less than $1000 for all altcoins. It doesn’t have additional charges on deposits of over $1000.
Crypto withdrawals are completely free for XLM, EOS, NEO, and some other smaller tokens. Or else, you are required to pay a small transaction charge to process your withdrawals. Additionally, wire transfer costs 0.1 percent of the overall amount, with a minimum of $60 for both withdrawals and deposits. Express bank wire transfers that are processed within a day on business days cost around 1 percent of the total amount with a minimum fee of $60.
Bitfinex also charges margin funding fees of around 15 percent of the fees generated by active margin funding contracts.
The exchange provides 24/7 support through platforms such as social media, live chat, and support tickets. Emails are usually responded to within 12 hours; however, it can take longer in a few cases. Moreover, there’s also a help center wherein users can find useful information. On their Telegram channel, the exchange’s admin team responds to users’ general questions related to the trading interface, compliance, and general questions.
In any case, any information related to users’ accounts must pass through the official ticket system within the platform so as to prevent the occurrence of security issues. It’s important to note that Bitfinex never approaches its users through personal messages. Moreover, it is also advised to not share your password with a third party asking for it as it is a common scam that has been trending on the market.
The Bitfinex support team used to have quite a reputation for being slightly unprofessional, but the entire team has grown significantly and is trying its best to gain its customers’ trust and has succeeded.
6) Verification Process
You can begin your trading journey on Bitfinex without going through the verification process. But you need to go through the verification process in order to trade fiat currencies for Bitcoin or stablecoins. The exchange can ask you for additional documents based on the type of account (corporate or personal).
Besides personal details, proof of residence, and ID verification, the verification process of Bitfinex requires a bank statement and a signed statement confirming the validity of information and details provided. Verification may take around 2 weeks at the maximum, depending on the interest. Furthermore, there are no limits when it comes to trading. At present, Bitfinex only accepts US dollars from fiat currencies but also offers withdrawal and trading options in USD, EUR, CNH, GBP, and JPY.
When it comes to other cryptocurrencies, there are a lot of altcoins you can select. They also accept stablecoins such as Tether. Overall, 164 cryptocurrencies are available currently for trading on Bitfinex. In the case of fiat deposits and withdrawals, the minimum rate set is $10000 USD/GBP/EUR and 1M JPY. Wire transfers are available for 0.1 percent of the total sum, with a minimum rate of $60.
7) Ease Of Use
The UI of Bitfinex exchange is extraordinary. The platform offers prompt and easy options to purchase or sell digital currencies, alongside placing orders. The website is responsive and mobile-friendly. Moreover, it’s fast, and real-time trading is possible.
Mobile apps are available for iOS and Android, offering margin funding, trading, and wallet options. You can personalize your experience to set up and protect your account with API keys and PIN pass protection. Additionally, the mobile apps will help you to stay on track on your trading by providing notifications on trade implementations and price alerts.
8) Overall Review
Bitfinex is an excellent platform for traders who have significant experience in trading, but even then it has its flaws. It’s not a platform that should start trading in at the very beginning of your trading journey, and its rules keep fluctuating. It is a highly-featured exchange based out of Hong Kong that caters to professional, experienced, and high-volume clientele.
Its trading experience comes with an overall 70+ trading pairs, advanced tools and options, a full-specification wallet, and margin trading. And its smooth UI, trader-friendly fees, and hectic order book made it the second-largest exchange by volume. It provides traders the ability to quickly and promptly trade popular coins, USDT, fiat currency, and a range of rare altcoins.
The fact that Bitfinex is one of the largest and most advanced exchanges on the market makes it perfect for serious professionals. Any trader looking to make serious money trading cryptocurrency and fiat need to pay proper attention to it. Apart from its rich trading options and an array of currencies, Bitfinex provides a tailor-made interface.
Since its arrival in 2012, Bitfinex has had a challenging time dealing with drama, panic, and tensions. However, it revamped its image following the second-largest hack in the history of Bitcoin. For experienced traders looking to make serious money, Bitfinex is the ideal match. For others, it’s best to look elsewhere.
Is Bitfinex Safe To Use?
On August 2nd, 2016, Bitfinex announced that cybercriminals had stolen around 120,000 BTC ($72 million at that time) from users’ wallets. This remains the second-largest hack in the history of Bitcoin and shook the entire industry. The price dropped by 23% and users were on the edge thinking if Bitfinex would survive. However, Bitfinex survived and repaid the losses in a nifty way.
The exchange socialized the losses among all members and issued BFX tokens in place for lost Bitcoins. These tokens could be tradable and redeemable. The company placed a value on each token and promised to repay all the users. And the company did repay all the users the remaining balance. In order to avoid such incidents in the future, the company has strengthened its security measures, including:
- Standard 2FA
- 99.5% cold storage (offline)
- Universal 2nd-factor security authentication
- Email encryption
- Withdrawal security
Bitfinex Fees — Trading, Depositing, and Withdrawing
The exchange fees are extremely low and very trader-friendly. They are in sync with the majority of the competition. Moreover, it doesn’t cost you much to trade on the platform.
Bitfinex Trading Fees
Bitfinex puts a maker/trader fee schedule.
- checkMaker: 0.1 percent
- checkTaker: 0.2%
The exchange’s fees can go as low as 0% with enough volume.
If you include liquidity to the order book by setting a limit order that goes above the ticket price for purchase or under the ticker price for sell, the maker fee is charged. If you take the liquidity away by putting an order that is processed, you are a taker.
Bitfinex Deposit Fees
Depositing a cryptocurrency is absolutely free of cost. A bank wire to deposit USD or EUR can cost 0.1%.
Bitfinex Withdrawal Fees
Withdrawing a cryptocurrency is simple, and withdrawal fees for both cryptocurrency and fiat are competitive and not as anti human rights as Binance.
- BTC: 0.0008
- ETH: 0.0027
- LTC: 0.001
- XRP: 0.02
2. Bank Wire: 0.01 percent
3. Express Bank Wire (24 hours): 0.1 percent
How To Trade Bitcoin On Bitfinex
Bitfinex is one of the most elite and advanced liquid markets for trading fiat currency and cryptocurrency. Trading cryptocurrencies require NO VERIFICATION!
How To Create An Account On Bitfinex
Go to Bitfinex.com, click Sign Up in the top right corner of the website, and enter the required details. Later, click the verification link given in the email you registered with the exchange.
How To Secure The Account
Initially, add some security measures to your account. At the very least, you should enable 2FA.
How To Fund The Account
Depositing is a simple task. You must have crypto in a wallet. Selecting a popular wallet is the most important thing you can do. Know the trustable wallets before you start trading.
Select your coin from the list and select Exchange Wallet. Next, generate the address and send your Bitcoin to this address.
How To Verify Account On Bitfinex Exchange
The account verification process on Bitfinex is stricter than you can imagine. It is the most comprehensive in the whole of cryptocurrency exchanges. To get started, select Verification under the profile icon in the top right corner. Click on Begin Verification and wait for the process to get started.
Choose Individual Verification and you will find the requirements. You’ll be asked to download a form, sign it, and upload it with 2 photo IDs and documents, proof of residency, and a bank statement.
How To Purchase Bitcoin (BTC) On Bitfinex Exchange
Once your account has been verified, move to the Trading screen, select the Exchange tab on the left side, and select the big green Buy button. It’s very easy. To keep things even simpler, stick to the Limit order.
The exchange allows you to trade cryptocurrency without the need to go through the verification process. In any case, you will be liable to certain limits and may not be able to access all the features.
You have to go through the verification process only for fiat currency. If you want to deposit, withdraw, and trade USD/EUR, you have to get verified. There are absolutely no limits to trading or withdrawing when using Bitfinex, which is one of the many reasons why it’s so popular with professional traders.
The Bottom Line
Bitfinex is a richly featured platform that has rehabilitated from the second-largest hack in 2016. Currently, it is one of the major cryptocurrency platforms and a go-to place for experienced and professional traders. In case you’re looking to trade high volumes of fiat currency and other altcoins for cheap, it’s the ideal match for you. However, be prepared to go through the verification process.
It’s not a place for beginners, and you won’t be able to use it if you’re a resident in the U.S. Overall, it’s a great cryptocurrency exchange if you’ve got deep pockets and know your game. For beginners, look elsewhere.
Laura has been interested in finance for a very long time, especially since her graduation in Economics. With the increasing popularity of cryptocurrency, she decides to read up more on the subject and soon became an expert. Laura has been dabbling with crypto ever since and started investing in them in 2017.