About Bitfinex Cryptocurrency Exchange
Bitfinex is one of the world’s biggest Bitcoin exchange by volume. With a market share of 39.12% of the total market share, more than the share of its nearest competitors combined. Including Coinbase with a market share of 23.28% and Bitstamp, with a market share of 15.49%. High volume is important for traders as it ensures a low spread, which is the difference between the best bid and ask prices.
Bitfinex [found at bitfinex.com] is a Hong-Kong-based trading platform founded in 2012 by Raphael Nicolle. The exchange is one of the most popular cryptocurrency trading platforms in operation on Earth. Bitfinex caters to more intermediate and advanced traders as well as institutions and offers a wide selection of coins, trading pairings, and trading options.
The exchange currently records 24-hour trading volumes worth around 42,464 BTC, with 62.26 trades per minute. These high trading volumes and rates of execution of trades are a result of high scalability of the platform designed and built by an exceptional group of experts dedicated to providing a high level of service for traders by utilizing a wide coin selection, low fees, and a comprehensive interface. The exchange also allows fiat deposits and houses a variety of cryptocurrencies with approximately 76 market pairs active on the platform.
Table Of Contents
- 1 About Bitfinex Cryptocurrency Exchange
- 2 Bitfinex Funding and Withdrawal Options
However, the team behind the exchange recently decided to discontinue providing their services to U.S. customers and focus on their users in other parts of the world.
Key Features Of Bitfinex
Bitfinex operates a modern, comprehensive, and highly customizable platform interface. The main dashboard presents users with a number of tools. The platform also incorporates Trading View charts and provides a mobile app that is available to both Android and iOS users.
As one of the older exchanges in operation today, it’s no secret that Bitfinex has experienced some security challenges. Bitfinex has experienced a number of hacks with the first major hack taking place in May 2015. On this occasion a hacker was able to obtain 1500 Bitcoin from a hot wallet controlled by the exchange, the lost funds were quickly reimbursed by the exchange. However, a later attack proved to be more problematic as a hacker was able to circumvent security on the platform and access up to 119,756 Bitcoin, which were worth an approximate $72m at the time, exploiting a vulnerability in the multi-signature system.
To counter these challenges, the team strengthened the security by choosing to closely monitor withdrawals in order to help stay off attacks. Also, the platform’s security system monitors withdrawals by IP address and other behavioral patterns that trigger manual inspection on withdrawals that appear to be unusual. Bitfinex stores 99.5% of its client funds offline in a cold storage system that employs a multi-signature function that is geographically distributed across multiple secure locations. The vast majority of funds are placed in cold storage with approximately only 0.5% of crypto assets being accessible in hot wallets.
Another security measure employed is that customers can whitelist an address to ensure that withdrawals can only be sent to that particular location. Bitfinex also claims that it uses a withdrawal confirmation step that is immune to malicious browser malware.
Bitfinex site also utilizes Database encryption and duplication in addition to DDoS protection to ensure that trading cannot be halted by an external influence. Customer accounts are also reinforced via the use of 2FA, PGP encryption and a host of advanced verification tools designed to monitor changes in account activity.
Bitfinex fees are very low, as is standard for large, trading-focused exchanges. Maker fees are paid when you add liquidity to our order book by placing a limit order under the ticker price for a buy and above the ticker price for sell. While Taker fees are paid when you remove liquidity from our order book by placing an order that is executed against an order of the order book.
The table below summarizes the trading fee structure of the exchange:
|EXECUTED IN THE LAST 30 DAYS (USD EQUIVALENT)||MAKER FEES||TAKER FEES|
|$0.00 or more traded||0.001||0.002|
|$500,000.00 or more traded||0.0008||0.002|
|$1,000,000.00 or more traded||0.0006||0.002|
|$2,500,000.00 or more traded||0.0004||0.002|
|$5,000,000.00 or more traded||0.0002||0.002|
|$7,500,000.00 or more traded||0||0.002|
|$10,000,000.00 or more traded||0||0.0018|
|$15,000,000.00 or more traded||0||0.0016|
|$20,000,000.00 or more traded||0||0.0014|
|$25,000,000.00 or more traded||0||0.0012|
|$30,000,000.00 or more traded||0||0.001|
Note: If you place a hidden order, you will always pay the taker fee. If you place a limit order that hits a hidden order, you will always pay the maker fee.
Bitfinex also allows users to trade with up to 3.3x leverage, borrowing funding from the P2P margin funding platform to boost their trades.
Users can enter orders to borrow the desired amount of funding, at the rate and duration of their choice, or they can simply open a position and Bitfinex will take out funding for them at the best available rates.
The margin funding market provides a way to earn interest on some currencies involving both crypto and fiat by providing funding to traders wanting to trade with leverage. Users can then offer to fund at the rate and duration of their choice, or they can simply lend at the Flash Return Rate. You can visit this page to know how margin trading works on Bitfinex.
The node-website BFXUSD offers useful tools for plotting rates of interest over time and calculating potential returns. It’s for the individual to decide whether the potential returns are worth the risk of another hack.
If you are not a trader and prefer safer investments, then the Bitfinex Margin Funding feature might be for you.
Through your Funding Wallet, you have the ability to “provide funding” to margin traders, in any of margin supported currencies on Bitfinex, earning interest on your holdings without subjecting yourself to the risks of active trading.
You can enter offers with your own chosen terms. When an offer is taken by a margin trader, the money in your Funding wallet will be used by the trader to buy or sell bitcoins (open a position) on margin. When the trader completes his or her trade by closing the position, the bitcoins are bought or sold back and the money, plus added interest, is returned to your wallet.
Margin funding is a slightly more advanced topic but is quick to master. Additionally, your margin funding strategy can be set to auto-renew, putting your funding strategy on auto-pilot and earning you interest upon.
Users are currently served by a support team that is available via email 24/7. The team aims to answer queries within 12 hours, but responses can take much longer. In addition to this, there’s a knowledge base section that covers the most pressing issues alongside other question and answers pages available on the website.
Approximately 72 market pairs linked to the four base currencies of USD, EUR, BTC, and BCH are currently available on the site. The table below summarizes the number of currencies and tokens currently traded on Bitfinex:
|Aelf||Ethereum||0x||Basic Attention Token|
|Tron||Ethereum Classic||Status||Metaverse ETP|
|Ripio Credit Network||Litecoin||QASH||Chain Split Tokens – Segwit2x|
|Augur||Dash||Stream||Chain Split Tokens – Bitcoin Unlimited|
|Time New Bank||Ripple||Bitcoin Gold||OmiseGO|
|SpankChain||Recovery Right Token||Aventus||EOS|
|FunFair||Chain Split Tokens||Qtum||Bitcoin|
Bitfinex Funding and Withdrawal Options
The only way to deposit fiat Dollars is via bank wire transfer. Bitfinex charges a 0.1% fee on all bank wire deposits, with a minimum fee of $20.
Getting Started With Bitfinex
Bitfinex Sign up and Login
Before you create an account, it’s necessary to read the pop-up box that appears and agree to the terms and conditions. These currently include a temporary minimum account equity of 10,000 USD and new accounts are not able to trade or perform any platform function until they reach this amount. Also, in order to gain access to fiat deposits and withdrawals, users must agree to undergo a verification process that may take up to 6-8 weeks to complete.
- Once you have ticked all the necessary boxes, you can move onto creating your account.
- You can open an account by following the signup process and entering your username, email address, and password. It’s also necessary to enter your time zone and a unique captcha text.
Secure Your Account
After creating your account, it is from the best practice to optimize your security before funding the account. Bitfinex provides an advanced range of security features that users can enable to increase their account security and further protect their funds.
- As a bare minimum, it is recommended for all users to create a strong, unique password for their Bitfinex account, and to combine this with Google 2FA. It is equally importantthat you note down your 2FA key, made visible during the setup process, saved offline in a secure location. This will enable you to recover your account in-case your 2-FA device gets lost. A failure to do this can, in a worst-case scenario, result in account lockouts lasting days.
- Lock withdrawals when a new IP address is used.
- Setup a withdrawal confirmation phrase.
- Lock or disable withdrawal addresses for all currencies.
- Disable “Keep Session Alive”.
- Limit access to your account based on IP address.
- Enable PGP email encryption.
For more information on how to thoroughly secure your Bitfinex account, visit the Security section of the Bitfinex Knowledge Base.
Making A Deposit
Once your account is fully secured, you can begin to fund your account by locating the “Deposit” button in the upper right-hand corner. Clicking this button takes you to the deposit page and here you can choose Us Dollar, Tether or from a list of cryptocurrencies in order to deposit.
Note that if you wish to deposit and trade fiat currencies (USD or Euro), you will first need to verify your account. In addition to letting you deposit, trade and withdraw fiat currencies, a verified account can also work to speed up deposit and withdrawal times.
No further verification is needed before you can deposit your cryptocurrencies.
To make a deposit, visit the Deposit section of your Bitfinex account, found in the top right corner. Choose the currency you wish to deposit (e.g. BTC), generate an address in the wallet you wish to send to, and input the address as the receiving address.
Note that there are three (3) wallets to choose from, which are:
- Exchange Wallet is used for buying & selling supported cryptocurrencies on the exchange.
- Margin Wallet is used when trading on margin.
- Funding Wallet is used when providing financing for other margin traders.
To fund your wallet:
- Select the token which you’d like to deposit to your Bitfinex account from the Deposit page
- Select one of the 3 available wallet addresses mentioned above
Note: The most common type of wallet is the exchange wallet, which is used when buying and selling any of our supported digital currencies. It is simple and free to move funds between the three wallets, so do not worry if you are unsure about the correct choice.
Also, for each deposit, you can use a single deposit address and continue to use the same one permanently. You may use the ‘Change Address’ button to generate a new deposit address, and the old addresses will still remain valid for accepting deposits.
- Copy the deposit address for the wallet of your choice. Choose Copy to Clipboard when copying the address to ensure the address is copied correctly.
- Open the external wallet from which you wish to access your funds and send the funds (e.g. using MyEtherWallet) and paste your Bitfinex deposit address into the application as the transfer destination.
Making A Trade
Once your account has been funded, it’s possible to click on the ‘Trading’ button and select the pairing that you prefer. From here you can determine the quantity, price, and type of order that you would like to execute.
To execute a trade:
- Make sure your funds are in your exchange wallet. To transfer funds to your Exchange wallet, follow the steps outlined here.
- Click on Trading from the main page and select the pair you wish to trade (e.g. USD/BCH – buying USD using BCH)
- In the Order Form, select the Exchange
- Specify the Order Type, Order Size, and Price.
- To make things simpler you can choose Market Order, resulting in your order being executed immediately at the current market price.
- When you have specified the type of order, size and price, simply click Exchange Buy or Exchange Sell to execute.
The picture above shows an Order Form for the USD/BCH pair. At the very top, one can choose between Exchange (“normal” buying and selling) or Margin (trading on leverage.)
Making a Withdrawal from Your Account
When you are finished trading and wish to withdraw your funds to a personal wallet or bank account, you can do so through the Withdraw function on your Bitfinex home page.
Basically, you can either cryptocurrencies or fiat currencies from your account. But, the two withdrawal options come with different conditions.
To withdraw fiat currencies (USD or Euro), your account first needs to be verified. After verifying your account, simply make your way to the withdrawal page, pick a currency (USD, Euro) and fill in your wire information (name, address and banking details).
The fee structure for withdrawing fiat currencies is 0.1% of the amount withdrawn, with a minimum $50,000. This is as a result of the announcement made by Bitfinex team on 12th May 2017.
To withdraw cryptocurrencies:
- Navigate to the withdrawal page from here.
- Select the Currencyyou would like to withdraw. For a list of available tokens.
- Enter the amount you wish to send in the “Send Amount” field
- Choose which of your 3 wallets you will be withdrawing from.
Note: As mentioned above, there are three wallets from which you can make deposit or withdrawal on Bitfinex
- Enter the receiving address into the “Address” field,
- Click on the “Request Withdrawal” button.
- The first checkbox correlates to locking a withdrawal address. It allows traders to lock a specific address so that no withdrawals could be sent to that address without permission.
- The second checkbox allows your withdrawals to be automatically processed. This requires setting up your security measures to a more robust profile than you may currently have implemented.
- Once the amounts are calculated, you can then click on the fiat amount populated to the right of the “Receive Amount” and adjust the received amount based on the cash value as shown below:
- The “Send Amount” entered at the top of the form will be debited from your wallet balance, and the “Receive Amount” at the bottom of the form is the amount that will be received by the recipient address.
- The above process is identical for all other cryptocurrencies except Monero (XMR) and Ripple (XRP). With a Monero withdrawal, a “Payment ID” is usually required to associate your transaction with your account. While Ripple sometimes requires a “TAG” to be associated with the transaction. However, if no Payment ID or Tag is required by the receiving address, then you can select the checkbox, “No Recipient Payment ID” or “No Recipient Tag.”