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Complete Bitfinex Review and Beginner's User Guide

Fri, 07/06/2018 - 12:43
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George Shnurenko
Bitfinex is a reputable trading platform that currently operates the biggest and the most liquid cryptocurrency exchange in the world.
Complete Bitfinex Review and Beginner's User Guide
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What is Bitfinex?

Bitfinex is a reputable trading platform that currently operates the biggest and the most liquid cryptocurrency exchange in the world. Bitfinex’s sudden rise is partially explained by the decision of the Central Bank of China to end no-fee trading that resulted in a major market shake-up and prevented main Chinese exchanges from reporting fake trading volumes. A large trading volume helps to reduce the difference between the buy and sell rates and increased the liquidity of a particular coin.

Trading Tools

It is worth mentioning that Bitfinex is more suitable for active traders than for beginners because it offers its users a great variety of trading tools as well as a big choice of altcoins and trading pairs. On top of that, Bitfinex is widely regarded to have the smoothest trading platform out there, since it rarely goes down even when the market reaches the peak of its volatility (BTC mooning/falling).

Bitfinex provides its users with an exchange service and a trading platform with an emphasis on leveraged trading. Basically, if you assume that Bitcoin is going down, it would be useful to learn
how to short Bitcoin on Bitfinex or how to short on Bitfinex any other cryptocurrency with the help of marginal trading. It also offers lending (not a single exchange apart from Bitfinex does it). If you have a substantial amount of BTC, any altcoin or even USD, you can lend it out to other traders.

Bitfinex Review

Cryptomarket is highly volatile and rather controversial. Cryptocurrency exchanges (in particularly, Bitfinex) are not immune to these controversies. Take into consideration the fact that every time you sell a cryptocurrency on this exchange you are getting a so-called ‘stablecoin’ Tether (USDT) instead of traditional fiat money. Tether is also the name of a corporation which has the same shareholders as Bitfinex. The 2015 NYT article confirmed that these companies are indeed closely connected.

US media reported in January about Bitfinex being scrutinized by American regulators. Despite the claims that Tether is backed up by the US dollar, there was no actual audit to confirm it. The majority of users do not have an issue with that since it is the biggest exchange in the world which is too big to fail, but make sure that you do your own research before reading
how to buy Bitcoin on Bitfinex. Besides, remember not to send or keep large amounts of coins on any exchange (use any cold wallet instead).

Mt. Gox’s example proves that even the biggest sharks on the market may not win a war with hackers. So,
how safe is Bitfinex? Bitfinex was also subjected to a huge hacking two years ago when about 120,000 BTC were stolen from the exchange, but, unlike Mt. Gox’s, managed to come back from the dead by repaying losses to their customers and improving its security.

How to Use Bitfinex?

The following guide is useful for beginners who want to find out how to use Bitfinex, how to trade on Bitfinex and how to exchange on Bitfinex.

open account
  1. The first thing that you have to do is to open an account and verify it. Those who are interested in additional discounts, may want to read how to get Bitfinex invitation code. If you are security conscious, it is strongly advisable to enable 2FA.

    sign up form

    NB! As mentioned above, Bitfinex is particularly aimed at skilled traders, so new accounts are not eligible to use all of its trading instruments.

  2. Once you’ve created an account, you can exchange your money or engage in trading. Beware of the fact that you have to undergo a confirmation process in order to be able to deposit or withdraw your money. The verification takes about 7-9 weeks. To be verified, one has to provide the scans of his ID and permanent address.

  3. How to buy on Bitfinex? Before buying any cryptocurrency you actually have to make a deposit by going to the upper-right corner and clicking the ‘Deposit’ button. Then you can choose any means of payment. Available payment methods include main cryptocurrencies and fiat money. Since April 2017, Bitfinex is no longer accepting wire transfers, but it can hardly be considered a big disadvantage because wire transfer tend to be expensive and take too much time to process a transaction.

  4. The most important part for traders is obliviously the ‘Trading’ section which displays all the assets that are available to trade. Before finding out how to buy IOTA in Bitfinex, pay attention to the fact that there is the minimum account equity 10,000 USD, so you cannot engage in trading until your account balance reaches this specific sum.

  5. When funds are deposited to your account, you can start trading. All of the assets available to trade are situated on the left side. In this section, you can choose your desirable trading pair. For example, those who want to know how to buy IOTA on Bitfinex, can simply choose IOTA/BTC trading pair and decide what amount of IOTA you would like to buy. Bitfinex uses charts powered by TradingView with very convenient indicators and variety of modifications that show how volatile the price of any currency is at a particular timeframe.

Types of Wallets

While making a deposit, you can choose among three major types of wallets:

Exchange Wallet

Used for purchasing coins.

Margin Wallet

Used for marginal trading.

Funding Wallet

Used for lending your funds to other traders.

Those who want to find out how to buy IOTA (Bitfinex) or any other altcoin have to consider using an exchange wallet which is the most common type of wallets.

Bitfinex Fees

One of the Bitfinex’s main advantages is its extremely low fees, but this is rather a typical situation for big exchanges that mainly focus on trade. They vary from 0.1% to 0.2% depending on your trading volume. If a user’s account exceeds $7.5 million trading volume, he isn’t charged any fees at all.

Bitfinex Withdrawal Limits

Processing a large amount of small transactions causes technical difficulties. That is why Bitfinex (like practically any other platform) comes up with the minimum withdrawal limit currently set at 250 USD. There is still a possibility to withdraw any amount of money that goes beyond this limit.

If you want to withdraw a small sum of money, you have to perform the following actions:

  1. Go to the ‘Withdrawal’ menu in the top right corner.

  2. Click the ‘Help’ button when filling in the amount of coins.

  3. Choose the ‘Request’ option in the new pop-up window.

NB! You are only allowed to make small withdrawals once a week. At the same time, normal withdrawals can be processed at any suitable time.

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About the author

George Shnurenko is a Bitcoin and cryptocurrency enthusiast, financial analyst and writer. He's majoring in history but he believes that the digital currency which has taken the world by storm will bring about change to all us humans.