Bitfinex Review

If you’re a cryptocurrency veteran, there’s a pretty good chance that you’ve heard the name “Bitfinex” before. It’s one of the oldest cryptocurrency trading platforms on the internet - the sheer number of user Bitfinex reviews showcases this pretty well, too.

It has a lot of trading options, over 400 spot trading pairs, and strong security features. Even though there are still some better options like Bybit and Binance, Bitfinex is definitely worth checking out.

Let's find out if it covers everything you need from an exchange!

Víctor Muñoz Albornoz

Founder at Bright NFT

What are the key factors to consider when choosing a cryptocurrency exchange for trading NFTs?

There are several factors to consider when choosing an exchange for NFT trading, but I would highlight three very important ones: security, user experience, and blockchain support.

What is Bitfinex?

Before getting into the pros and cons of this platform, let me explain briefly what Bitfinex is.

Essentially, it's a centralized exchange platform where you can buy cryptocurrencies with both fiat and crypto. It lists around 250 coins and tokens and over 400 spot trading pairs.

The platform has a clear interface along with a paper trading feature (also known as demo trading), so even if you are a beginner, you can comprehend how to use Bitfinex by trying it out with zero risk.

📚 Related Reading: What is Paper Trading?

In addition to that, it also provides a lot of advanced tools like margin trading and different market orders, making it a solid choice for experienced traders as well.

Moreover, Bitfinex is more than just an exchange. It has a few more products in its ecosystem, like Pay, Borrow, and Securities. This way, you can borrow from Bitfinex using your crypto as collateral or pay with crypto through Bitfinex Pay, all without relying on a traditional banking system. Thus, it's fair to say that Bitfinex is all about easy usage and convenience for crypto enthusiasts.

Having said that, though, it’s worth pointing out the fact that Bitfinex wasn’t always considered to be “an amazing crypto trading platform”. In fact, the exchange does have a rather shaky past, which many critics often discuss. Well, let's get into it and see if Bitfinex is legit.

Bitfinex Review: PROS

Before we discuss the issues that plagued Bitfinex almost half a decade ago, we should actually start off by talking about the positive things that the platform is currently known for. After all, the vast majority of user Bitfinex reviews found online are actually rather positive towards the exchange in question!

A Cryptocurrency Exchange Aimed at Professional Traders

While this platform is kind of easy to use, it's also no secret that it's mainly aimed at professional traders with its extensive advanced features. No matter where it is that you look online, the vast majority of user Bitfinex reviews are going to tell you the same.

Admittedly, that’s actually a really rare thing to come across! Most of the cryptocurrency exchange platforms on the market try to achieve the opposite - cater to crypto newbies and make their services as approachable and simple to use as possible.

That said, though - what makes Bitfinex a “professional” trader platform?

Well, for starters, let’s take a look at the trading (order) types available on the site. Many crypto sites are going to offer users a single trading option - market orders. These are the simplest of orders that you can perform - purchasing or selling a specific amount of crypto assets for the price that they’re currently being valued at.

The Bitfinex exchange offers its users some advanced order types in addition to market orders, such as limit, stop, and so on.

• Limit
• Market
• Stop
• Stop-Limit
• Trailing Stop
• Fill or Kill (FOK)
• Immediate or Cancel
• Interactive Book
• Scaled (Advanced)

It’s very rare for a crypto exchange to offer such a varied order choice to its users!

In addition to that, you’ll also find margin trading, derivatives, securities trading, and even OTC services on the platform. It offers very informative charts, and you can even customize the interface to suit your preferences – which is a feature that's not all that common!

All things considered, the Bitfinex exchange truly is a great option for professional traders, at least as far as feature variety and customization go. Something echoed by quite a few user Bitfinex reviews, too!

Derivative Trading Option

I mentioned the fact that the Bitfinex exchange offers its clients a few different methods of trading. In addition to the most popular option of crypto exchanging, you can also trade derivatives on the site, too. It does appear to be an appreciated feature, especially considering some user Bitfinex reviews!

A derivative is like a contract that’s tied to the asset that you’re interested in - in this case, it would be the cryptocurrency. Let’s use Ethereum as an example.

Say you would like to profit from the cryptocurrency market but have no actual interest in holding crypto coins or getting yourself a crypto wallet in the first place. That said, you’ve heard that Ethereum is a great investment at that point in time, and you want to act fast.

Derivative trading allows you to do just that! With Bitfinex, you can invest in an asset without actually needing to purchase it. This way, a contract is created, and the price of the asset is tied to the contract in question.

📚 Read More: What is Derivatives Market?

A Decent Number of Trading Pairs (400+)

In the world of crypto exchanges, you’ll often come across a term called “trading pairs”. This term refers to the “asset-to-asset” trading options that you’ll have on the platform of your choice.

If you’re a professional cryptocurrency trader (or a newcomer who wants to become one), crypto trading pairs are probably quite important to you! They can really open up your ability to diversify strategies and increase your chances of making a profit.^[1]

While there are multiple factors that come into play as far as making profits go (i.e., fees, taxes, account limits, etc.), the right crypto trading pair can be the deciding factor in this regard, too!

As I mentioned earlier in this Bitfinex review, it offers over 400 different trading pairs, which is a pretty decent number of options to pick from. These pairs include both fiat-to-crypto and also crypto-to-crypto ones.

Strong Security Features

I mention this in every single crypto article that I write, and this Bitfinex review is no exception - security should always be the core feature that you look into whilst trying to find the best crypto exchange platform for yourself.

In the first part of the Bitfinex review, I mentioned the fact that Bitfinex has suffered some security issues over the years - that is true. However, it’s also something that we’ll discuss a bit later on in the article. For now, let’s take a look at some of the current security features that are present on the site.

First of all, Bitfinex pays close attention to the IP address that you use to sign into your account. Upon logging in, your information is then saved into the platform’s systems, and your IP address is logged, too.

What this does is prevent any third parties from accessing your account from a different IP address. On top of that, you can also place some additional safeguards, too - for example, you could make it so that withdrawals can only be performed from a single, set IP address. That’s actually a really great security feature!

For anyone going through user Bitfinex reviews and asking if is Bitfinex legit, though, there’s yet another security measure that the company behind the exchange utilizes - cold cryptocurrency storage.

Cold storage refers to keeping crypto coins in hardware devices. These devices are not connected to the internet - this means there is no way of accessing them, and the only feasible dangers that would be present with such a storage method would involve physical theft or some natural damage (i.e., fire, water, etc.).

Multiple Bitfinex reviews emphasize the fact that the exchange keeps 99,5% of its users’ crypto assets in cold storage devices. That is truly one of the best security features that Bitfinex employs!

All in all, most users of the exchange agree that Bitfinex has truly learned their lessons from past controversies and that the current security features and measures that are in place within the platform are both adequate and reliable.

📚 Further Reading: How to Evaluate Security?

Supports Fiat Currencies

One of the more annoying aspects that many people bring up, even in Bitfinex reviews, is the fact that some exchanges out there require you to make deposits via a cryptocurrency transfer.

What this means is that if you’d like to purchase, say, Litecoin, you’d have to first withdraw some other coin from your wallet (i.e., Ethereum), transfer it to the exchange, and only then make the appropriate transaction. Tedious and annoying, for sure!

It’s also not something that you’d need to worry about with Bitfinex because it allows you to make deposits with 5 different fiat currencies:

• USD
• EUR
• GBP
• JPY
• CNH

While the deposits can be made via a wire transfer or a debit card, the fact that you can use five fiat currencies means that you won’t have to struggle with difficult transferring processes. Great!

Did you know?

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Bitfinex Review: CONS

Now that we’ve discussed all of the major benefits and features of the Bitfinex exchange, let’s transition and take a look at some of the less positive aspects of the platform.

Naturally, for anyone wondering is Bitfinex legit, probably the biggest glaring con that you’d face with the exchange is the earlier-mentioned controversial past of the company and the platform.

A Controversial Past

Bitfinex had two historical break-ins - one in May 2015 and one around a year later, in August 2016. These two break-ins were notable at the time since a lot of funds were lost. The hacks were also of a high profile - they echoed through the crypto communities worldwide and sent a clear message to other exchanges.

As you can probably imagine, cryptocurrency exchanges are under tremendous pressure. No matter whether you read some user Bitfinex reviews or check out any crypto enthusiast forum, you’ll probably notice that the vast majority of crypto coin hodlers are super-careful about their assets and thus choose exchanges in a very selective manner.

Naturally, the break-ins were a huge blow to Bitfinex. As pointed out earlier in the Bitfinex review, the company has appeared to have learned its lesson and has since strengthened its security exponentially.

Might Not be Suitable for Beginner Traders

Apart from the security standpoint of the exchange, another issue that’s commonly mentioned among user Bitfinex reviews is the fact that the platform is likely not going to be very suitable for beginner traders.

Bitfinex is primarily aimed at professional traders - people who already have a pretty varied portfolio of financial assets, and now want to get into crypto trading, as well. A single look at the features available on the site will tell you that you should have some knowledge about financial markets and investments in order to utilize the full potential of Bitfinex.

Now, naturally, no one says that you can’t use the Bitfinex exchange if you’re a beginner - it’s just that you may have a hard time figuring out all of the technicalities, ins and outs, and intricacies of the exchange. Yet, as I already mentioned earlier in this Bitfinex review, you can use paper trading to understand how the platform works without using real money.

If you want to find a very beginner-friendly exchange, though, you should take a look at Coinbase instead.

Bitfinex Fees

Now, let's talk about fees in this part of my Bitfinex review, so you'll understand why it's one of the best alternatives for anyone who's looking to save as much money.

Same as many other exchanges,^[2] Bitfinex has a “maker” and “taker” fee model. A maker is a person who puts forward a sale offer, while the taker, as you’ve probably guessed by now, is one who accepts that order. In this sense, while makers provide liquidity and, thus, pay lower fees, takers remove liquidity and pay higher fees. The trading option you opt for is also considered when calculating.

Table: Bitfinex fees for different trading options

Keep in mind that if you place a hidden order, you will always pay the taker fee because your order is not visible in the order book, and when it gets executed, it removes liquidity. On the other hand, if you place a regular order that matches a hidden order, you will pay the maker fee since it appears as though you are adding liquidity to the order book.

Even though Bitfinex spot trading fees range up to 0,2% for the taker, there are a total of 16 tiers, and all fees, especially takers, drop significantly at each higher level. Here are some levels with more significant changes:

Table: Spot trading fees on Bitfinex

Bitfinex offers even more discounts for holders of Unus SEO LED, the platform's native token. These discounts apply to both spot and derivatives trading and are tiered, with larger discounts (up to 25%) for holding more tokens. You can easily calculate your fee discount on Bitfinex by entering your trading volume and the amount of Unus SEO LED tokens you hold.

Deposits are completely free, and withdrawals are going to cost a bit, depending on the cryptocurrency you’re withdrawing.

How to Use Bitfinex?

To finish off our Bitfinex review, let’s take a look at how the actual registration process on the site works and whether or not it’s actually simple to create an account.

The registration process for Bitfinex is super quick and simple. If you didn't activate the authenticator app while signing up for the platform, you can also do it after you’re on the site. Plus, you’ll need to verify your identity for further trading-related actions.

📚 Further Reading: Why KYC Is Important?

Pros

• Secure and reliable
• Accepts fiat currencies
• Lots of trading options

Main Features

• Reputable exchange
• Accepts fiat currencies
• Offers various trading options

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Pros

• Advanced trading options
• Demo trading
• Very low fees

Main Features

• Beginner-friendly
• Great fees
• Demo trading

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Pros

• Instant Buy/Sell functionality
• Multiple cryptocurrencies support
• Bitexen Research section for market analysis

Main Features

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Conclusions

So, all of that being said, is Bitfinex legit and worth checking out?

I'd say - yes, but there are a few things that should be kept in mind as you do so!

If you’re an experienced trader with a varied portfolio of crypto assets, and you know the ins and outs of the industry, sure - Bitfinex could be a great option. It has small fees, a wide belt of financial and analytical tools, and is currently very secure, too.

If you’re just starting out, though, and haven’t got the vaguest idea of how crypto trading works, admittedly, there are going to be better options for you out there. Namely, make sure to point your attention to either Binance or Coinbase crypto brokerage.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. H. Rad, R. K. Y. Low, R. Faff: ‘The Profitability of Pairs Trading Strategies: Distance, Cointegration, and Copula Methods’;

2. A. Brauneis, R. Mestel, R. Riordan, E. Theissen: ‘The Anatomy of a Fee Change — Evidence from Cryptocurrency Markets’.