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Bitfinex

Bitfinex

4.4 out of 5

Bitfinex is targeted at professional cryptocurrency traders. It requires a balance of USD 10,000 to begin trading, and in addition to allowing straightforward market-value exchanges of, say, US dollars for bitcoins, it also enables a wide variety of special trades. These include limit and stop orders, margin trading and lending, and over the counter (OTC) trades (i.e. direct trades between two parties that don’t go on the order book). While there is a wide array of different options available, everything is laid out in an impressively intuitive fashion, with easy to navigate dashboards and menus. Yet despite the robustness of its day-to-day security measures, Bitfinex has been hacked twice (in 2015 and 2016), casting a shadow over what is otherwise a very slick platform.

Pros

  • Wide range of services and order types
  • Low trading and withdrawal fees
  • Very easy to use

Cons

  • Only for professional crypto-traders
  • Has suffered a couple of high-profile hacks

Screenshots

Fees

As a trading platform for cryptocurrencies, Bitfinex charges trading fees. These vary according to the amount being traded, and according to whether the user is the “maker” or “taker” of a trade (i.e. according to whether they trade by making a new order, or by taking an existing order).

Value of tradeMaker feeTaker fee 
>$00.10%0.20% 
>$500,0000.08%0.20% 
>$1 million0.06%0.20% 
>$2.5 million0.04%0.20% 
>$5 million0.02%0.20% 

To put this in some perspective, Poloniex – which also charges “maker” and “taker” fees – imposes a 0.25% taker and a 0.15% maker fee for any trades less than 600 BTC. Given that 600 BTC is roughly equal to $8,279,991, this makes Bitfinex one of the cheaper advanced trading platforms out there.

And when it comes to deposits, sums equal to or greater than $1,000 (US dollars) encounter no fees at all. However, Bitfinex charges 0.1% of a bank-transfer deposit in US dollars or euros.

For deposits less than equivalent of $1,000, it charges fees that vary with the cryptocurrency being deposited. A sample of these is shown below, while the full list can be found here on the exchange’s support page:

CurrencySmall deposit fee 
Bitcoin (BTC)0.0008 BTC 
Ethereum (ETH)0.01 ETH 
Litecoin0.001 LTC 
Monero0.04 XMR 
Dash0.01 DASH 

As for withdrawals, these are always charged for by Bitfinex. A bank transfer/wire in euros or US dollars is charged at 0.1% of the amount being transferred, while an express bank transfer (within 24 hours) is charged at 0.1%.

Once again, the fee for withdrawing cryptocurrency varies with the currency being withdrawn. However, things are made slightly simpler for users by the fact that Bitfinex charges exactly the same for withdrawals as it does for small deposits. In other words, users would pay a flat fee of 0.0008 BTC for a “small” deposit in bitcoin, and they would pay exactly the same amount if they wanted to withdraw the currency.

And for the purposes of comparison, Bitfinex’s withdrawals are generally cheaper than those of two similarly advanced exchanges, Kraken and HitBTC.

    
CurrencyBitfinex withdrawal feeHitBTC withdrawal feeKraken withdrawal fee
Bitcoin (BTC)0.0008 BTC0.00085 BTC0.001 BTC
Ethereum (ETH)0.01 ETH0.00215 ETH0.005 ETH
Litecoin0.001 LTC0.003 LTC0.002 LTC
Monero0.04 XMR0.09 XMR0.05 XMR
Dash0.01 DASH0.03 DASH0.005 DASH

Background

Founded in 2012 and registered in the British Virgin Islands, Bitfinex has become the world’s largest cryptocurrency exchange by bitcoin trading volume. It focuses more on professional traders than on the general public, offering users the ability to engage in margin lending, margin funding, paired trading, and limit and stop orders (as well as other kinds of order). It asks for a minimum account balance of USD 10,000, so it’s certainly not for casual users, yet its simple layout and interface makes it very straightforward to use.

While the exchange offers users the a robust variety of security measures, from two-factor authentication (2FA) to IP address monitoring, Bitfinex suffered from a couple of high-profile hacks, in May 2015 and then in August 2016. It learned lessons from these attacks and bolstered its security measures, yet the November 2017 hack suffered by tether – which is reportedly related with Bitfinex – continues to raise questions about the exchange’s overall security.

Security

Two high-profile hacks aside, Bitfinex offers more security protections for the user and takes more security precautions than most exchanges. Not only is there the aforementioned two-factor authentication, but users can also make use of universal 2nd factor authentication, which requires them to login using an additional physical device such as a USB stick. Added to this, Bitfinex monitors user accounts in the following ways:

- Saves login data and analyze it for any unusual activity
- Detects IP address changes in case of sessions hijacks
- Sends notifications and permits account freezes in case of suspicious activity
- Can limit account access to selected IP addresses

As for the security measures it has in place to protect its system, Bitfinex does the following:

- Uses protection against distributed denial of service (DDoS) attacks
- Automatically backs up databases everyday
- Automatically duplicates backup data
- Updates its software and Linux systems regularly

The above steps work to reduce Bitfinex’s vulnerabilities while also ensuring that transaction and fund data is retained, so that in the event of an unfortunate incident users don’t lose any of their funds.

Usability

For an exchange that caters almost exclusively to professional traders, Bitfinex is remarkably user-friendly. It has its own mobile app, while on its main dashboard everything is laid out clearly and logically. There’s a graph charting a selected currency’s value at the top, a sidebar including a tidy order form and the user’s balances, and boxes at the bottom displaying Bitfinex’s order book, incoming trades, and the user’s order history.

With regards to carrying out trades and managing funds, things are similarly uncomplicated. Using the order form on the right-hand sidebar, users can place everything from a simple market-price exchange to a stop-limit margin trade. And once orders have been placed and trades have been made, keeping track of your activity is easy enough thanks to the “Tickers” box on the sidebar, and the “Orders” and “Order History” boxes at the bottom of the dashboard.

Deposit/Withdrawal Methods

Getting the necessary equity worth at least USD 10,000 into your account involves a bank transfer/wire (in the case of fiat currencies) or a transfer of cryptocurrency from an external wallet. From there, users can move their funds to and from their exchange, margin and funding balances, which enable them to use the different services Bitfinex offers (e.g. margin lending/trading, over the counter trades).

This process is simple enough, although in the case of bank transfers it can take some time. This is because transfers require account verification, which at the time of writing were taking Bitfinex anything from six to eight weeks to complete.

As for withdrawals, these work in the same way: users either send fiat currencies back to their bank accounts via a wire, or they send their cryptocurrencies back to an external wallet. Withdrawals of fiat currencies can require as many as seven business days to complete, while withdrawals of digital currency can take anything from a few minutes to a few hours.