Crypto exchange platforms provide a secure way to buy and sell digital assets. There are multiple crypto exchanges, including centralized and decentralized exchanges in the market. Thus, choosing the right trading platform is essential for a good trading experience. Among all available crypto trading platforms, Bitfinex exchange is one of the oldest and reliable platforms.
Bitfinex started as a peer-to-peer trading platform for Bitcoin in its early phase, but now has become a fully functional platform that offers various trading related services for hundreds of crypto assets. In this article, we will review the features and working of Bitfinex exchange and how what sets it apart from other crypto exchanges.
What is Bitfinex Exchange?
Bitfinex is a centralized crypto exchange founded by Giancarlo Devasini and Raphael Nicolle in 2012. It is owned and operated by iFinex Inc. and is headquartered in the British Virgin Islands.
Bitfinex refers to itself as “The Original Bitcoin Exchange” with around 2 million users worldwide. It was inspired by Bitcoin and aimed to provide people with a platform to transact and interact freely around the world.
The main focus of Bitfinex exchange is to provide high security standards and high throughput. With this, traders can easily access the highly liquid crypto market and use advanced technology to trade and invest in crypto assets.
Key Features of Bitfinex
There are various features that make it one of the unique crypto trading platforms, which are as follows:
Spot Trading
Bitfinex’s spot trading feature allows its users to buy and sell crypto assets at the current price. It also offers users an easy-to-use interface with various order types and real-time charts.
Margin Trading
Bitfinex’s margin trading feature allows users to trade with up to 10x leverage from its peer-to-peer margin funding platform. Under this feature, traders can open long or short positions using their assets as collateral, and then Bitfinex secures funding at optimal rates.
Derivatives Trading
Bitfinex’s derivatives trading, which includes perpetual contracts and futures, helps users maximize their profit by predicting the future prices of cryptocurrencies on leverage. It offers a leverage of up to 100x for certain perpetual contracts.
Over-the-Counter (OTC) Trading
Bitfinex offers an OTC desk for large volume traders which provides a platform for direct transactions between parties without impacting the public order book.
Additional Features
- Scaled Orders: These are an algorithmic order type that is designed to let users focus on strategy rather than manually entering orders. It automatically creates multiple limit orders across a custom price range.
- Paper Trading: It is a demo trading feature where a user can create multiple paper trades to test their strategies without any financial risk.
- APIs: Bitfinex’s REST and Websocket APIs are developed to facilitate users to integrate all features of the platform into their applications.
- Advanced Chart Features: Bitfinex provides its users with a graphical trading experience with advanced charting functionality that helps visualize orders, positions, price alerts, and annotate their trading strategy.
- Corporate Accounts: It is an advanced feature developed to meet the specific needs of professional and institutional traders, including sub-accounts, expedited verification, and dedicated customer support.
Bitfinex Staking Program
Bitfinex provides its users with an opportunity to earn extra income on their crypto holdings. It offers a soft staking program which allows users to earn rewards without locking assets which means a user can continue trading or withdrawing their tokens at any time.
Currently, Bitfinex supports a variety of Proof-of-Stake (PoS) tokens, which include Tron (TRX), Tezos (XTZ), Solana (SOL), Polygon (MATIC), Cardano (ADA), Polkadot (DOT), and Ethereum (ETH). The staking rewards vary by token, which goes up to 6.5%, depending on specific crypto and network conditions.
Bitfinex Exchange Fee Structure
Bitfinex has different fees for different types of services, which are as follows:
Trading Fees
Bitfinex uses a maker-taker model where it charges different fees for both maker and taker. Currently, spot trading fees for maker and taker is 0.1% and 0.2% respectively, while derivatives trading fees is 0.02% and 0.065% for maker and taker respectively.
A user can also get a discount of up to 25% on trading which depends on the amount of Bitfinex’s native token, LEO, held by a user.
Deposit Fees
Bitfinex does not charge any deposit fees if a user deposits cryptocurrencies and stablecoi. However if a user deposits fiat currency, then a fee of 0.1% is applied.
Withdrawal Fees
Withdrawal fees on Bitfinex depend on the token withdrawn. For example, if a user withdraws Bitcoin, then a fee of 0.0004 BTC is charged, and if a user withdraws fiat currency, then 0.1% is charged for standard withdrawal, and if the user chooses the express withdrawal option, then a 1% fee is charged.
Bitfinex Security Breach and Measures Taken
Bitfinex faced a major hack in August 2016 where hackers stole 119,756 Bitcoin, which was worth $72 million at that time. However, the exchange has efficiently handled the crisis and managed to be back as one of the major crypto trading platforms.
After the 2016 security breach, Bitfinex has taken various security measures to avoid such hacks in the future, which include storing 99.5% of user funds in offline mode in air-gapped cold wallets, which are distributed at different locations and protected by multi-sig protocols.
Bitfinex further protects its platform with DDoS protection, SSL encryption, and frequent audits. Its users’ accounts are also protected by mandatory two-factor authentication and IP whitelisting.
Bitfinex Exchange: Pros and Cons
Here are the pros and cons of the Bitfinex exchange:
Pros of Bitfinex exchange
- Bitfinex offers its users various advanced trading features which includes margin trading, derivatives trading, lending, etc.
- The crypto exchange is popular due to its high liquidity and multiple trading pairs.
- The platform also offers a customizable interface where a user can change and customize its dashboard based on their preferences and strategies.
- The trading fees on Bitfinex is low as compared to other crypto exchanges making it more attractive than other platforms.
- The exchange provides its users with a strong security standard which assures them a secure trading experience.
Cons of Bitfinex Exchange
- Bitfinex exchange has a complex interface with various advanced features, which may be complex for new users.
- The trading platform has faced a major security breach, which raises trust issues.
- The exchange has very limited fiat deposit options with a slow process and high transaction fees.
- Bitfinex is not available in the U.S due to regulatory issues.
Bitfinex Exchange’s LEO Coin
LEO is the utility token of Bitfinex exchange created by iFinex Inc. to overcome the 2016 security breach and reduce user trading fees. It also plays an important role in improving liquidity of the platform.
LEO offers various benefits to its users including reduction in trading fees, withdrawal fees and lending fees. It is also incorporated into iFinex broader ecosystem where a holder can get access to premium features and attractive discounts.
Final Verdict
Bitfinex exchange is an advanced crypto trading platform which was developed for each type of investor whether it is a new or a professional trader. It provides high liquidity, various trading options and strong security measures with low trading fees.
The exchange went through a major hack in 2016 which has made it less desirable among users but it has handled the crisis in an efficient manner and gained back reparations. Hence it can be regarded as a good trading platform. However before using Bitfinex and investing in crypto, do your own research (DYOR) to minimize financial risks.
