Bitfinex Review: Advanced Crypto Trading For Non-U.S. Investors

For decades, professional traders spent their days at Bloomberg trading terminals or requesting faster and better fiber cables to be laid closer to the New York Stock Exchange’s servers. But when cryptocurrencies burst onto the scene in the late 2000s, the world of traders really opened up. Professional traders were no longer relegated to stocks, options, futures, commodities, and bonds.

In 2012, Bitfinex, a Hong Kong-based cryptocurrency exchange, opened one of the world’s first Bitcoin exchanges. Since that time, Bitfinex has expanded coins and currencies, started to comply with country-specific regulations (outside of the United States), and added charting tools similar to those in Bloomberg terminals. The once small peer-to-peer exchange platform now hosts one of the best-known platforms for professional crypto traders.

Bitfinex is not available in the United States, but it's still one of the most widely-used trading platforms around the globe. If you’re deciding how to set up your professional crypto trading platform outside the US, it could be a good option for you. We explain it’s security, functionality, and cost in this review.

What Is Bitfinex?

Bitfinex is one of the oldest and most well-known cryptocurrency exchanges in the world. Founded in 2012, the exchange is owned by Hong Kong-based iFinex Inc. The exchange supports users the world over, except in the United States. iFinex Inc. also owns the stablecoin Tether which tracks the US dollar one to one. This close relationship between Tether and Bitfinex has been the source of controversy among crypto traders and enthusiasts.

Bitfinex heralds its security as a top priority. It keeps 99.5% of all private keys in offline cold storage. That said, Bitfinex doesn’t have the cleanest track record. It suffered two major security breaches in the first four years of existence. In May 2015, hackers stole 1500 units of Bitcoin. In 2016, more than 119,000 units of Bitcoin were stolen.

More recently, Bitfinex was required to pay an $18.5 million fine to the New York Attorney General. This fine was imposed because Bitfinex allegedly sent $850 million to Crypto Capital Corp, a Panamanian payment processor, without informing clients. This incident led to Bitfinex withdrawing from supporting traders in the United States. Despite this checkered past, Bitfinex is still one of the most-used cryptocurrency platforms in the world.

What Does It Offer?

Bitfinex is a robust cryptocurrency exchange. It allows users to trade most cryptocurrencies and to buy and sell tokens using stable coins and fiat currency.

Bitfinex has more charting and analysis tools than other cryptocurrency marketplaces. And it also allows users to trade on margin.

Overall, Bitfinex looks and feels like an exchange for professionals, and newer traders may feel overwhelmed by the amount of information on the platform. Even Bitfinex’s demo video can feel dizzying at first.

Worldwide Trading Support, Except In The United States

Bitfinex has faced serious trouble in regard to complying with U.S. law. As previously mentioned, It paid $18.5 million in fines to the New York Attorney General after using $850 million to a Panamanian trade processor without telling clients. Following the 2017 settlement, Bitfinex was forced to halt trading in the United States.

Today, the company is working to comply with legislation across the world (including country and zone-specific laws). However, the company still does not support U.S. residents, including those using VPN or APIs that come from outside of the United States.

Charting And Trading Tools

Bitfinex is quickly becoming known for its charting tools. The UI makes it easy for traders to compare coin-to-coin performance or to track an individual coin’s performance over time. 

The world of “quantitative” cryptocurrency analysis isn’t as established as “quantitative” stock analysis. But the tools Bitfinex offers make it easy for experienced stock traders to shift to the world of cryptocurrencies. Plus, you can test them out in a paper trading environment.

Cold Storage Of Private Keys

Bitfinex stores 99.5% of its clients' private keys in offline cold storage. That keeps those coins safe from cyber attacks. The 0.5% of keys in the “hot” wallets are subject to potential loss.

Traders who want added security can store the majority of their keys in hardware wallets off the Bitfinex exchange. Since cryptocurrency transfers are free, users can transfer currency at the time of the trade. Check out our favorite crypto wallets >>>

Low Fees Compared To Most Other Exchanges

Bitfinex charges low “maker and taker” fees compared with most other crypto exchanges. Most other exchanges charge around 0.2% on both sides of the trade. But that's the most you'll pay in taker fees with Bitfinex and its maker fees max out at 0.1%. It also has relatively small fees for wire transfers.

Options To Lend Margin And Trade On Margin

Bitfinex allows users to lend margin and trade on margin. Bitfinex users who own coins can charge a daily interest rate to traders seeking margin. Interest rates on the platform are displayed as daily interest rates. However, they are charged per second borrowed.

Under this arrangement, traders will typically only use margin for a few hours before returning it. Users who trade on margin must pay the interest rate. And lenders pay a portion of the interest earned to Bitfinex.

Are There Any Fees?

Bitfinex charges three primary types of required fees to its users.

Transfer Fees

Users are charged a 0.1% fee on all wire transfers of “fiat currencies” to the platform. That includes fees on US Dollars, Euros, Yen, etc. Transfers of cryptocurrencies and stablecoins are free.

Maker Fees

Maker fees are the fees charged to individuals who “make” or initiate an available trade on the Bitfinex platform. If you choose to buy or sell cryptocurrency through the platform without “taking” an available trade, you’ll be charged a maker fee.

Maker fees range from 0.0% to 0.1% of the trade amount depending on the total volume you trade on the platform. To get to the 0% maker fee, you must trade more than $7.5 million on the platform.

Taker Fees

Taker fees are charged to the individual that fulfills another person’s order on the exchange. Taker fees range from 0.055% to 0.2% of the trade volume depending on the trade volume you do on the exchange.

On Bitfinex, both makers and takers are charged fees meaning you cannot escape the fees unless you’re a maker doing more than $7.5 million on the platform.

In addition to the “required fees”, Bitfinex charges fees or interest to traders who use the margin account. Interest rates are charged on a per-second basis (though they are displayed on a per-day basis for easier math). A typical interest rate may be 0.06% per day. That translates to a $6 charge on $10,000 borrowed for a single day.

If you choose to lend margin to other traders, Bitfinex takes 15-18% of the interest earned on the lending opportunity. For example, if you earn $20 through lending, Bitfinex will take 15% of that or $3. That leaves you with $17.

How Do I Contact Bitfinex?

Bitfinex is headquartered in Hong Kong and registered in the British Virgin Islands. The company notoriously does not publish its headquarters' address, potentially due to the legal scrutiny it faces.

Additionally, Bitfinex does not publish its support email or phone numbers. Instead, platform users can use the Bitfinex secure web portal to ask specific customer support questions. Bitfinex, does however, have an excellent knowledge base.

How Does Bitfinex Compare?

Bitfinex gets a lot of flack for its past breaches and the murky relationship with stablecoin Tether. However, its fees are low. And many users praise its performance and customer service.

Here in the US, Binance.US is likely the best comparison to Bitfinex. It supports a large number of coins and competes on price per trade. Binance does have a cleaner history than Bitfinex, but it also started much later.

Those who are newer to cryptocurrency investing may prefer an easier-to-use platform such as Coinbase. However, keep in mind that you'll need to be a Coinbase Pro member to take advantage of its maker/taker fee structure.

Is It Safe And Secure?

Bitfinex boasts that its top priority is security, but the company suffered two major security breaches in 2015 and 2016. Additionally, the legal troubles with New York Attorney General (along with governments around the world) make Bitfinex a bit of a question mark on the security front.

Of course, Bitfinex has long been on the vanguard of crypto exchanges, and it was one of the only targets when it was attacked back in 2015 and 2016. Since that time, best practices surrounding cold storage and disclosure have improved.

Despite the improvements, cryptocurrency traders should consider their tokens at risk on the Bitfinex (or any cryptocurrency) exchange. They are not guaranteed in any way shape or form. Traders following best practices will keep most of their unused currency off the platform and in a hardware wallet.

How Do I Open An Account?

U.S. Residents will not be able to open a Bitfinex account. The site blocks US-based APIs and does not allow users to transfer from a US bank.

If you live and have jurisdiction outside of the United States, you can open an account by choosing “Sign Up” from the Bitfinex webpage. You’ll be asked a few questions. Provided that you can legally open the account, Bitfinex will grant the account, and you’ll be given the option to set up multi-factor authentication. Creating an account only requires an email address, but using it takes a lot more.

Following the account setup process, Bitfinex verifies all users and requires official photo IDs (driver’s licenses and passports), proof of address, financial statements, and more (depending on the level you’ll use).

Reddit users report that Bitfinex verification can take anywhere from 4-8 weeks.

Is It Worth It?

U.S.-based investors aren’t going to be able to use the Bitfinex platform for trading crypto. However, those who live outside of the U.S. may want to consider it. 

The platform can seem a little bit overwhelming at first. But it has a load of resources and extremely low fees compared to popular exchanges like Coinbase or Kraken.

Despite the focus on professional crypto traders, Bitfinex could be a great exchange even for amateur investors who want to trade from time to time. But if you'd like to explore a few alternatives, we rank the best platforms for U.S. users here.

Bitfinex Features