February 6

Bitfinex Review 2021 | Ultimate Breakdown

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Bitfinex is a Hong Kong based trading platform that was founded in 2012. It serves almost all countries in the world except a select few (USA being the most notable). Bitfinex supports both fiat-to-crypto and crypto-to-crypto trades. They also offer customers margin trading, limit and stop orders, over the counter (OTC) trades, and more. They currently handle approximately $2B worth of trades a day which is about 6.27% of the total market.

  • Web Address: www.bitfinex.com
  • Main location: British Virgin Islands
  • Mobile app available: Yes
  • Trading Fees: Maker: 0-0.1% Taker: 0.055-0.2%
  • Deposit Fees: Wire: 0.1% (min 60 USD/Euro) Cryptocurrency: Free
  • Fiat Currencies: USD, EUR, GBP, JPY
  • Cryptocurrencies: BTC, BCH, BTG, ETH, EOS, XRP, NEO, DAI, ZEC, ZIL & 150+ more
  • Parent Company: iFinex Inc

My Bitfinex Review Summary:

Bitfinex is a good option for serious traders, a combination of a tiered fee structure and a wide range of advanced trading options makes them a good choice if you want to take trading seriously. If you are a beginner, I suggest something less complex to start off with. They also take security very seriously and store 99.5% of all client finds in cold storage. Bitfinex is not available as an exchange in the US but I did recommend it in our Canadian Guide.

Bitfinex Reputation:

As you can see Bitfinex does not have an overwhelming positive reputation but negative experiences tend to get reported more so at first glance it may look worse than it is. 60% of reviews had a 'Great' or 'Excellent' experience.

What services do Bitfinex offer?

Bitfinex has different services which include the following:

An Advanced Trading Platform

Bitfinex has one of the most fluid order books. High trade volumes lead to a low spread - the difference between the asking price and the best bid - and this is why they are so critical for traders. Additionally, Bitfinex has a customizable, advanced GUI that has over fifty trading pairs as well as plenty of order types. Some order types on Bitfinex include market, stop, trailing stop, stop-limit, limit, scaled, and fill or kill orders. Users also get access to charting features and an API.

All of these features make this one of the most advanced trading platforms and a popular exchange for advanced cryptocurrency traders.

Margin Trading and Funding

Through Bitfinex’s Peer To Peer Margin Trading Platform, users can borrow and trade with a leverage of up to 3.3 times. Bitfinex also allows users to adjust the amount, interest, and duration of the amount borrowed. The system can also do this automatically for traders.

Bitfinex allows crypto traders to lend other traders their funds so they can earn interest on the amounts they lend out. Traders who lend funds can choose the currencies and traders which they are going to lend out as well as the interest rate and duration of the “loans.”

It is important that margin trading in this way is not recommended for new users as it is very risky and users are not able to access their funds for the duration of the loan should they decide to lend currency or assets to other traders.

Over the Counter Services

Those who want to trade over $100,000 in cryptocurrency privately can do so through the over-the-counter facility provided by Bitfinex.

Derivatives Trading

Bitfinex also allows traders to trade derivative contracts. Derivatives allow traders to speculate on the value of an asset without having to sell or buy it. Traders are only required to provide collateral to USDT to trade derivatives.

Staking and Lending

The last service offered by Bitfinex is staking and lending. Through this service, cryptocurrency holders can lend or stake their assets without having to deal with staking software.

Bitfinex fees & Limits:

Platform trading fees

Trade volume in the last 30 days (USD equivalent)

Maker fees

Taker fee

$0.00 or more traded

0.100%

0.200%

$500,000.00 or more traded

0.080%

0.200%

$1,000,000.00 or more traded

0.060%

0.200%

$2,500,000.00 or more traded

0.040%

0.200%

$5,000,000.00 or more traded

0.020%

0.200%

$7,500,000.00 or more traded

0.000%

0.200%

$10,000,000.00 or more traded

0.000%

0.180%

The discounts continue all the way up until 30 million or more traded. Check out Bitfinex for more details.

Bitfinex deposit fees

Deposit type

Fees

Fiat deposit

0.1%

Cryptocurrency deposit

Free for deposits above US$1,000 equivalent. Nominal (less than US$1) fees apply otherwise.

Tether (USDT) deposit

Free for deposits above US$1,000 equivalent. 20 USDT otherwise.

Bitfinex withdrawal fees

Withdrawal type

Fees

Fiat withdrawal

Bank wire: 0.1%, Express bank wire: 1%, High frequency/volume bank wire: 3%

Cryptocurrency withdrawal

Varies depending on cryptocurrency. Typically less than US$1 equivalent.

Tether (USDT) cryptocurrency withdrawal

20 USDT

A high-frequency/volume bank wire when you either make 2 fiat currency withdrawals in a 30 day period or make withdrawals accumulating to a total of 1 million USD or more. In these scenarios you will be charged a flat 3% fee.

Bitfinex Margin trading fees

Fee type

Charges

Charge on fees collected by margin trading providers

15%

Charge on fees collected by margin trading providers when opened by a hidden offer

18%

Charge on funding that is borrowed and returned without being used in a margin position

Up to 1 full day’s interest

Bitfinex Security

Bitfinex takes its security and that of its users very seriously and this is why it has more security protection in place than most other exchanges. In addition to two-factor authentication, users also have the option of using Universal 2nd Factor Authentication. Universal 2nd Factor Authentication (U2F) allows users to log in using a second physical object like a USB key.

Bitfinex also stores 99.5% of all client finds in cold storage using a distributed multi-signature system.

In addition to all the above, Bitfinex keeps an eye on user accounts in various ways including:

  • Saving login data and scanning it to weed out unusual activity
  • Monitoring IP address changes to protect from session hijacks
  • Alerting account owners allowing them to freeze their accounts if they notice suspicious activity
  • Limiting access to accounts and the withdrawal of funds to only a few preselected IP addresses
  • Monitoring behavioral patterns and initiating manual inspection in case of unusual withdrawals
  • Using encrypted emails for withdrawal confirmations

To protect its system, Bitfinex also puts several security measures in place. These include:

  • Automatic daily database backups
  • Automatic backup data encryption and duplication
  • Protection against DDoS attacks
  • Regular updates for their software and Linux systems

All the measures above are meant to protect Bitfinex’s systems and to reduce their vulnerabilities. Although Bitfinex does not insure your funds, it has compensated users in the past who have lost their assets due to a security breach.

Is Bitfinex safe to use?

Regulation: Bitfinex has headquarters in Hong Kong although it is registered in the British Virgin Islands. Bitfinex has taken all the necessary steps required to comply with all regulations to an extent that is reasonably possible.

Verification Process: Bitfinex limits Fiat deposits and withdrawals to verified users only. Its “standardized compliance measure” consists of a virtual questionnaire, identity verification documents such as a driver’s license or passport, and a declaration form that confirms all the information submitted is accurate.

Security Features: In addition to supporting 2FA, Bitfinex recommends that all its users use it. Users can further protect their accounts using IP whitelists as well as customizable security options and self-account-auditing methods.

Bitfinex’s offline multi-signature hardware wallet holds 99.5% of all users’ funds. The wallet has seven physical keys (hardware security modules) and four or more are required to open the wallet.

Other: Bitfinex has been assessed by the Blockchain Transparency Institute which found that all of Bitfinex’s trades are 100% real and there is no wash trading on the platform.

Bitfinex Controversy

Bitfinex has had a checkered past. Bitfinex was founded in 2012 and was hacked three years later. 1500 bitcoins were lost through that hack. In 2016, more than 100,000 bitcoins went missing from the exchange. The USD$72 million loss led to the price of bitcoin falling by 20%.

After this loss, Bitfinex distributed it among its users, with account balances cut by up to 36%. Although Bitfinex said that all accounts were affected by this cut, some sources say that Coinbase was able to get a better deal from Bitfinex to minimize its losses.

All was not lost though because Bitfinex did compensate its users using tokens that are used to track the price of Bitcoin. Bitfinex ended up buying these tokens back from its users throughout the following year.

Bitfinex has also been accused of price manipulation largely due to its close relationship with the Tether cryptocurrency. Bitfinex and Tether share some parts of their management and these allegations have never been substantiated.

During its time as one of the most tracked exchanges, Bitfinex has been accused of everything from money laundering to insolvency. All of these accusations are usually rumors, with little to no evidence behind them.

Bitfinex has also faced some controversy due to its use of unconventional banking deals. It has had a lot of accounts closed and it has been reported that Bitfinex was using shell-like companies to handle its banking.

One good thing did come out of this though - the distributed baking solution used by Bitfinex today. The use of this distributed baking system is the reason why users can experience delays when making fiat currency deposits.

Even with its controversial past, Bitfinex remains one of the world's most liquid exchanges and its popularity keeps growing according to numbers and data from industry experts. These experts also concur that all the trades on the platform are real and not doctored in any way.

Bitfinex Pros & Cons

Pros
  • Bitfinex allows for a large degree of customization and gives users an advanced trading option
  • Bitfinex remains one of the most liquid exchanges in the world
  • The platform has lots of additional features including shorting, margin trading, and peer-to-peer markets which make it an excellent option for advanced traders
  • Bitfinex takes its security and that of its users very seriously
Cons
  • Due to how complex the platform can be, it is only ideal for advanced, experienced, and professional traders
  • The verification process is so slow that it sometimes takes weeks. Deposits can also take as long with frequent and large wire withdrawals attracting hefty fees
  • Bitfinex is a very controversial exchange with a spotty record at best

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