Bitfinex Review – Is Bitfinex Safe? Features and Fees Explained

Bitfinex is a leading cryptocurrency exchange in terms of volume, user accounts, and supported markets. Plus, the platform offers plenty of advanced trading options at competitive rates.

In this Bitfinex review, we provide you with a detailed and comprehensive analysis of this platform – including available cryptocurrencies, fees, security, tools, and customer service.

Recommended Broker – eToro

What is Bitfinex?

If you are a cryptocurrency enthusiast but do not want to make a long-term investment, then you have the option to trade digital assets by speculating on their price movements. And Bitfinex is deemed one of the world’s leading exchanges to facilitate this.

Based in Hong Kong, Bitfinex was founded in 2012 and was among the first few platforms to capitalize on the emerging era of digital tokens. It offers a suite of advanced features, along with a wide range of products that cater to virtually every need of a cryptocurrency trader.

Offering support for hundreds of markets, Bitfinex allows you to trade digital assets against both fiat currencies and other tokens. In addition, you will also have access to derivatives and margin trading markets on the platform. You can get started on Bitfinex by making either a fiat or cryptocurrency deposit.

There are also multiple payment methods supported for this purpose. The commissions are calculated on the basis of a maker-taker model that falls in the range of 0% to 0.2% depending on your 30-day trading volume. As we move forward with our Bitfinex review, you will learn more about the security and features offered by this trading platform.

Bitfinex Pros and Cons

To provide you with a quick overview, our Bitfinex review found the following pros and cons of using the platform:

Pros

Cons

Cryptoassets are highly volatile unregulated investment products. No EU investor protection. 67% of retail investor accounts lose money when trading CFDs with this provider.

Bitfinex Markets

Bitfinex is a trading platform that offers you high liquidity and a long list of digital assets. Currently, the exchange supports over 200 cryptocurrencies and stablecoins, aside from tokenized securities.

In order to facilitate trading across different markets, Bitfinex comes integrated with the following features:

Instant Buy with Bitfinex

Although primarily a cryptocurrency exchange, Bitfinex allows you to purchase digital tokens instantly using a credit or debit card. The only prerequisite is that you will need to meet the minimum purchase amount of $50.

This feature is supported for all the ERC-20 tokens listed on the platform and for assets such as Tether and Tether Gold. All you need to do is enter your debit/credit card details, select the cryptocurrency you want to purchase, provide the destination wallet and finally – confirm the payment.

The digital assets you purchase will be immediately transferred to your Bitfinex wallet. The service is facilitated by third parties, and as such, you are required to complete verification in order to be able to make use of this Instant Buy feature.

However, one thing we could not pin down is how much Bitfinex charges for this service. According to the website, Instant Buy comes with reasonable fees that are dependant on the credit/debit card processor that you use.

Bitfinex Exchange

One of the main attractions of Bitfinex is that it offers multiple crypto-to-fiat markets.

• The platform supports five fiat currencies, namely – USD, EUR, GBP, JPY, and CNH.
• In addition to this, there are also hundreds of crypto-to-crypto pairs and a few different order types that you can use to control your positions.
• There are also several crypto-to-stablecoin markets supported on this platform, such as BTC/USDT, BTC/EURT, BTC/CNHT, and more.

When engaging in exchange trading, you will also have to meet the minimum order size, which will vary periodically for each pair, proportionate to their market value.

Bitfinex Margin Trading

This market allows you to access up to 10x leverage by borrowing funds on the Bitfinex margin funding platform. However, you will put the initial equity from your own assets – and the minimum amount required will change depending on the specific pair you want to trade.

For instance, for BTC/USD, Bitfinex requires initial equity of 10%, whereas, for ETH/USD, this increases to 20%. Additionally, if the value of your account equity falls below the minimum maintenance margin, your positions will be force-liquidated.

Note that when you use margin trading tools, you will be borrowing funds from another Bitfinex user – which might come with additional interest rates. You can either let the exchange automatically choose the best available option or make a bid for funding.

Bitfinex Margin Funding

In order to facilitate margin trading, Bitfinex has set up funding tools on its platform. This allows you to lend funds through the P2P market for users who wish to trade with leverage. In return, you will be able to earn interest for the assets you lend.

• Margin Funding is a viable option for those who want to look for alternative and safer ways to earn from cryptocurrencies instead of trading.
• You will be able to set your own terms, such as the duration of the loan, the amount, and the internet rate.
• Moreover, a trader can only use the funds available in your account to open margin positions, where the actual asset will continue to remain in your wallet, or as part of the borrower’s position.
• To get started, you only have to deposit funds to your funding wallet on Bitfinex. You will be able to access this feature right after completing the basic identity verification.

Note: We discuss the different levels of KYC and the multiple wallet options in the later sections of this Bitfinex review. 

Bitfinex Derivatives

For those unaware, a derivative is a financial product that takes its value from an underlying asset. This means that you can trade a digital token without having to own it, subsequently allowing you to make profits in a more flexible manner.

To be able to trade derivates on Bitfinex, you should hold either Bitcoin (BTC) or Tether (USDT) in your derivatives Wallet.

Bitfinex Securities

Along with cryptocurrencies, Bitfinex allows the trading of tokenized securities. The purpose of this is to raise funds in public and private markets.

There are three types of securities offered in Bitfinex:

• Equity – which provides ownership rights to holders
• Debt – which are loans that are repaid in periodic payments
• Hybrids – tokens that combine the aspects of both

These are available on the exchange, or via the Bitfinex capital-raising platform. You will also find that the security tokens are transferable only between approved parties and venues at present.

Bifinex Securities is a fairly new product that has been introduced by the platform and has only lists Exordium (EXO) at the moment, albeit, it is planning to offer other assets soon.

Bitfinex Supported Countries

Bitfinex is a global cryptocurrency trading platform that accepts users from across the world. However, due to regulatory constraints, users from the following jurisdictions will not be able to use this exchange:

• US
• Cuba
• North Korea
• Iran
• Syria
• Crimea

If you’re based in the US and are still searching for a top-rated cryptocurrency broker, consider eToro. This US-friendly platform is regulated by the SEC and allows you to deposit funds with a debit/credit card for free. Plus, you can buy cryptocurrency on a spread-only basis from just $50.

Bitfinex Trading Platform

As we have mentioned throughout this Bitfinex review, the platform is geared towards the advanced traders among you. And consequently, the trading interface might appear to be quite sophisticated to the untrained eye. Nevertheless, you can easily switch between spot and derivatives trading from within the exchange interface.

There is also a wide range of technical indicators and charting tools. You will even find that Bitfinex supports plenty of advanced orders – including limit, market, stop, stop-limit, fill/kill, trailing stop, immediate/cancel and scale.

The trading interface also carries plenty of information linked to its order books. You will be able to find the time at which each position was entered and the respective amounts. There are also a few customization options that will allow you to see only specific markets, or adjust the chart settings.

Bitfinex Paper Trading

Bitfinex also offers a demo version of its platform to all users, allowing you to test your trading strategies in a simulated environment. To facilitate this, the exchange gives you access to sub-accounts loaded with paper money.

You will be able to create multiple subaccounts that come with all trading functions offered on the platform. You will also have the option to share your strategies with the Bitfinex Pulse community. As you can imagine, the main advantage is that there is no need for you to risk any real funds in order to test the market to arrive at your decisions.

Currently, the following Bitfinex features are available via paper trading accounts:

• Exchange, margin, and derivatives trading
• Margin funding – where you can test lending money to other traders
• Bitfinex Borrow, where you will be able to try borrowing funds using your test fiat/crypto assets as collateral
• OTC trading desk to experiment placing large orders

However, bear in mind that Bitfinex only supports five different markets for paper trading – TEST/BTC,  TEST/USDT, TEST/USD, TEST/AAA, and TEST/BBB.

Bitfinex Honey Framework

Bitfinex has gone one step further in ensuring that advanced traders have easy access to automated trading. The exchange has developed the Honey Framework UI, which can be downloaded and installed on your desktop computer.

This comes with an integrated trading terminal, where you can execute your algorithmic orders. You will also be able to design your own market data layout and select from a wide range of custom widgets. You can also use the code editor to devise strategies.

Not only that, but Bitfinex also comes with built-in algorithmic orders such as MA Crossover, Iceberg, and TWAP that you can deploy on the interface. All you need to do is to install them in the UI and you are good to go.

Bitfinex Payments

Unlike the majority of cryptocurrency exchanges, Bitfinex accepts multiple payment methods, making it easier for you to make deposits and withdrawals.

You will be able to make payments using the following fiat currencies on the platform:

• US Dollar (USD)
• Euro (EUR)
• British Pound (GBP)
• Japanese Yen (JPY)
• Chinese Yuan (CNH)

However, which of these fiat currencies you have access to might depend on where you live. You will also have to make a wire transfer in order to process these payments. That being said, to be able to make fiat deposits, you will have to go through full identity verification.

In terms of cryptocurrencies, you can perform transactions with any of the hundreds of digital assets listed on the platform.

Bitfinex Wallets

At this point in our Bitfinex review, it might be worth pointing out that the platform has three different wallets, each catering to different products:

• Exchange Wallet is used to buy and sell supported cryptocurrencies on the platform
• Margin Wallet is used when trading on margin
• Funding Wallet is only for providing financing for other margin traders

As such, when making deposits, you will want to be careful about which of these Bitfinex wallets you choose.

Bitfinex Minimum Deposits and Withdrawals

Perhaps the most bewildering aspect of Bitfinex is that the minimum deposits requirements are huge  This is a dynamic requirement that is based on the fiat currency of your choosing and is as follows:

• 10,000 USD
• 10,000 EUR
• 10,000 GBP
• 1,000,000 JPY
• 75,000 CNH

Bitfinex also has the same requirement for making fiat withdrawals too. In the case of cryptocurrencies, the minimum requirement for moving digital assets from the platform is the crypto-equivalent of $5.

As you can see, unless you are a professional trader, it is doubtful that you will want to deposit such huge amounts to get access to the trading markets. Alternatively, you can make cryptocurrency transfers to get started on the platform.

In light of this, if you are not comfortable depositing such a large amount of capital, the best option would be to choose a broker like eToro. In doing so, you can deposit from just $50 to get started.

Bitfinex User Verification

In compliance with Anti-Money Laundering (AML), Know Your Customer (KYC), and Counter-Terrorism Financing (CTF) laws and regulations, Bitfinex has implemented a verification process for all the registered users on the platform.

Bitfinex categorizes its users into four different levels:

• Basic – No verification required
• Basic Plus – Official photo ID, selfie, and phone number verification
• Intermediate – Second official photo ID, proof of address, and all information required for Basic Plus verification
• Full – Financial statement and all information required for Intermediate verification

Your verification level on Bitfinex will determine the specific features accessible to you on the platform. For instance, commission discounts, lending products, and derivatives trading are available only for Intermediate and Full users.

And most importantly, if you want to make fiat deposits via bank wire, you should have completed the Full verification on Bitfinex.

UNUS SED LEO Token

UNUS SED LEO is the official utility token of the Bitfinex community, which is used as a way to reward users of the platform. Those who hold this asset will be able to benefit from the following advantages:

• Taker fee reduction of 15% on crypto-to-crypto and crypto-to-stablecoin pairs
• Lending fee reduction of up to 5%
• Discount for deposit and withdrawal fees of up to 50%

If you want to trade Unus Sed LEO tokens on the platform, you need to have at least an Intermediate verification level and have to be residing in an approved jurisdiction.

Bitfinex Fees

When considering any cryptocurrency platform for your trading needs, fees should be at the forefront of your decision-making process. It only makes sense, as this single factor can determine how much profit you can take home for yourself.

In this section of the Bitfinex review, we will take a look at the different types of fees that you should expect when signing up.

Deposit and Withdrawal Fees

Bitfinex does not charge anything to make cryptocurrency deposits on the platform. If you prefer funding your account with fiat currencies, then this will cost you 0.100%, with a minimum of $60 (when adding and withdrawing).

When making a withdrawal, you will see that the fee varies depending on your chosen cryptocurrency. While some digital assets such as Algorand, Dogecoin, or Polkadot do not attract any charge, you might have to cover the cost of the transaction for the majority of supported tokens.

Trading Fees

Bitfinex cites some of the most competitive fees in the market, by following a maker-taker model. In addition, there are two other factors that come into play here – your 30-day trading volume, and the number of UNUS SED LEO tokens you hold.

• Typically, the highest maker and taker fees you will pay are 0.100% and 0.200% respectively. However, as we pointed out earlier, you can reduce this considerably by trading larger amounts.
• When trading derivatives, the starting commissions are further reduced to 0.0200% and 0.0750% for makers and takers.

Bitfinex comes with a fee calculator that you can use to find out how much you are likely to pay based on your LEO tokens and trading volume.

Bitfinex Borrow and Margin Funding Fees

If you are a lender using Bitfinex Borrow or margin funding features, then you will have to pay 15%. If you are opening a hidden offer, this will be further increased to 18%.

On the other hand, if you are a borrower using either of these services, you will be charged the appropriate ‘maker fee’ twice – once when you are depositing the collateral, and again when returning it.

Additionally, the borrower will also have to pay the interest rate on the loan.

Bitfinex Staking

Another advantageous feature offered by Bitfinex is staking. You can generate returns as high as 10% per annum simply by holding your digital assets on the platform. The rewards will be calculated every week, however, as per the Bitfinex website – there is no guarantee that you will receive rewards consistently.

This is because the rewards are distributed by the token network and not Bitfinex itself. The key benefit to using this feature is that there is no minimum requirement for you to start staking your assets, nor is there any fee involved.

Bitfinex staking is supported for the following digital assets:

• Tron (TRX) – 6% to 8%
• Eos (EOS) – 0% to 3%
• Tezos (XTZ) – 3% to 5%
• Cosmos (ATOM) – 1.5% to 3%
• Algorand (ALGO) – 3% to 5%
• Solana (SOL) – Up to 6.5%
• Cardano (ADA) – 4% to 5%
• Polkadot (DOT) – Up to 7%
• Kusama (KSM) – Up to 8%
• Ethereum 2 (ETH2) – Up to 10%

Whether you will be able to withdraw the tokens once you opt-in for staking will depend on the specific cryptocurrency.

Bitfinex Borrow

Bitfinex Borrow is a P2P funding platform where you can borrow funds from other users by putting up your cryptocurrency assets as collateral. To be eligible for loans, you need to have completed at least the Basic Plus verification, and your level will determine the type of assets that are available to you.

For instance, if you want to borrow fiat currency against crypto coins, then you should be a Full verified user. You will be able to choose between a variable or a fixed interest rate for your loan.

Moreover, the borrowing option is available only for a few selected cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Uniswap. When you are ready to close the loan, you can repay it by depositing the asset you borrowed from your Bitfinex margin wallet. You can do this as a whole, or in part, at any time.

Bitfinex Lending Pro

Bitfinex has also partnered with third-party providers to give you access to lending options. You can use these platforms, such as Celsius, to generate yields on your cryptocurrency holdings. However, this feature is only available for Intermediate or Full verified users.

To start with this, you will need to move your assets from your Bitfinex wallet to Celcius, which will incur the standard withdrawal fee.

Bitfinex Terminal

Bitfinex Terminal is another advanced product that caters to the needs of experienced traders. This feature integrates with the Dazaar network, which allows you to gain access to real-time market data. you can choose between free and paid streams to design strategies and strengthen your research. This is an entirely different entity that is designed specifically for professionals with coding knowledge.

Bitfinex Mobile App

For a cryptocurrency platform this advanced, it is not surprising that an efficient app accompanies it. Bitfinex has developed a full-fledged mobile version of its exchange that is compatible with both iOS and Android devices.

The application comes with almost every feature that you will find in the online version of the exchange. You can log in, access the different features, and open positions on the move. You will also be able to deposit and withdraw funds, check the status of your trades, and stay on top of your favorite markets at all times.

While the app is useful, it should be noted that it is not designed with beginners in mind. The trading interface can be complicated if you are not used to advanced features, especially considering the sheer number of options and tools available at your disposal. As such, if you want to use Bitfinex mobile version on the go, it would be a good idea to familiarize yourself with the website first.

Bitfinex OTC

Bitfinex also offers an Over-the-Counter feature for users who want to execute large trades. This allows you to bypass having to go through public order books.

You can either go through the OTC desk to access liquidity without accepting the exchange marketplace or choose to trade directly with another Bitfinex user. You can get started with this feature by sending a direct email to the support team.

Bitfinex Pay

This product from Bitfinex allows businesses to receive payments in cryptocurrency. It should be noted that this caters to the merchants and not to buyers.

• The advantage is that the process is swift, and you will be able to receive the payment within minutes without having to pay any fees.
• Supported cryptocurrencies include Bitcoin, Ethereum, and Tether.

On the other hand, if you want to use Bitcoin in your Bitfinex wallet to make online payments – you can do so through Bitrefill. The exchange has partnered with this company for you to purchase gift cards and coupons using your cryptocurrencies.

Is Bitfinex Safe?

Although Bitfinex is considered one of the oldest cryptocurrency trading platforms in this space, the website has been hacked on multiple occasions in the past.

• In 2016, in one of the biggest security breaches on a cryptocurrency exchange platform, Bitfinex, reported that Bitcoin worth $72 million at the time was stolen from the internal wallets.
• This was, in spite of securing funds via BitGo.
• However, users who lost their digital assets were later reimbursed in BFX tokens.
• Recently in 2021, Bitfinex was also charged by the Commodity Futures Trading Commission in the US for operating as a futures commission merchant without proper registration.
• This further sheds light on the fact that this cryptocurrency exchange continues to be unregulated.

Altogether, Bitfinex does not give the impression of being the most secure cryptocurrency trading platform out there. Notably, this exchange is not regulated by any entity and does not offer you any insurance in the event of a breach. In other words, if you choose to store your funds and assets on this exchange, you will be doing so at your own risk.

Bitfinex Security

All that being said, Bitfinex has enforced the following security features to ensure some level of protection to users and their assets kept on the platform.

This includes:

• 99.5% of user funds are stored in an offline, multi-signature wallet
• Approximately 0.5% of funds are kept in hot wallets to fulfill withdrawals requests in the queue
• Using up-to-date Linux systems
• Google Authenticator on Android and iOS devices
• Email notification sent on every login attempt
• Email Encryption with OpenPGP

These measures can go a long way in limiting the risk of the Bitfinex being hacked and thus – making it more difficult to compromise.

Bitfinex Customer Support

Our Bitfinex review found that the trading platform offers excellent customer support. You can reach the service team by sending a message directly on its website. There are separate departments that cater to all your concerns.

The platform has also set up Bitfinex Pulse, which works as an information directory and news feed. You can create your account here to share posts/trading strategies and engage with the Bitfinex community.

In addition, there is an extensive collection of how-to articles and guides that detail out every feature and the steps involved with using the platform. If you seek a quick response, you can also find the live chat option and connect to the virtual assistant on the Bitfinex website.

eToro vs Bitfinex – Comparison

Bitfinex indeed strikes as one of the most solid cryptocurrency platforms for advanced traders. However, is this the best in the market?

To answer that, let us provide you with a detailed comparison of Bitfinex and eToro – a leading online broker that is regulated by the SEC and now boasts a client base of over 20 million users.

Safety and Regulation

If you have read our Bitfinex review from start to finish, you now know that this platform lacks security. There is no regulation nor any insurance that can protect your funds or assets on this exchange.

On the other hand, eToro is perhaps one of the safest online brokers you will come across. This platform carries licenses from some of the most reputable financial authorities in the world, including the SEC and FCA.

User-Friendliness

We have already established that Bitfinex is designed for advanced traders. That is, if you are a beginner, you will have a tough time understanding how to use theitstrading interface. Moreover, the markets offered can be too risky to handle without a steep learning curve.

eToro offers you a better alternative by providing an intuitive interface that can be used by beginners and experienced traders alike. You can easily make purchases of different assets, and cash out directly from within your portfolio.

You will also be able to engage in CFD trading, without having to deal with tons of charting tools and indicators. In fact, from signing up to placing your first trade, eToro allows you to complete the end-to-end process within minutes.

Fees

While Bitfinex offers competitive fees, it is ultimately dependant on how many LEO tokens you hold and your respective trading volume.

eToro instead charges an entry-level spread of 0.75% for cryptocurrencies. Deposits are also free if you are funding your account in US dollars (0.5% for non-USD) – no matter which payment method is being used.

Passive Investment Tools

While Bitfinex allows you to earn passively using staking and lending tools, eToro has an altogether different approach. On this platform. you will find a tool called CopyTrader, where you will be able to mirror the trades opened by experienced professionals on the site – in proportion to your investment. This means that you can earn from the expertise of other users.

You can also choose to create a diversified crypto portfolio using the CopyPortfolio service, where the eToro team will select a basket of digital assets in a fully diversified manner. Both these options are geared towards beginners, allowing you to earn passively in the cryptocurrency markets.

Bitfinex Review – Conclusion

If you are an experienced cryptocurrency trader seeking high liquidity, then Bitfinex is potentially a good choice. It offers an extensive set of supported markets, access to peer-to-peer financing, advanced tools, and indicators – along with a transparent fee structure.

However, the history of Bitfinex is plagued with multiple security breaches. As such, you would be wise to choose a broker that offers regulatory protection, without having to compromise on features. In this respect, eToro is a great right option.

This social trading platform supports dozens of popular cryptocurrencies, all of which can be purchased on a spread-only basis and from a minimum investment requirement of just $50. And most importantly, eToro is regulated by the SEC, ASIC, CySEC, and the FCA.

eToro – Best Broker to Trade Crypto

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