update 19 August 2021

What is Bitfinex Exchange? – An Easy to Follow Review for New Users

Bitfinex is one of the oldest and most respected blockchain-based exchanges in the world. This platform was built to provide digital asset investors trading services when the market was still in its infancy stage. In this way, Bitfinex introduced a true peer-to-peer experience to the market years before most people even knew about Bitcoin.

As one of the pioneers in the spaces, Bitfinex has seen significant success. Today, it’s one of the world’s top exchanges. Specifically, the platform is considered among the longest-running and most liquid major cryptocurrency exchanges available. Impressively, Bitfinex serves 52 countries at this time. Reports have stated that the platform accounts for 1% of the total volume in the crypto sphere.

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Bitfinex has seen its share of controversy since it entered the market so long ago. The platform suffered multiple hacks resulting in hundreds of millions in lost crypto. Additionally, the group took heat for its close association with the world’s top stablecoin provider, Tether (USDT). Despite these challenges, this veteran exchange continues to dominate the space.

Benefits of Bitfinex Exchange

In its early days, Bitfinex didn’t have any competition. Despite this open market, the platform’s developers never skimped out on features, security, or ingenuity. Here are some of the top benefits of using Bitfinex today.

  • Experience

It would be impossible to find an exchange with more market experience. Bitfinex has seen all the highs and lows of the crypto market. Impressively, the team demonstrates a pioneering spirit with each new product and service they add to the platform. Today, Bitfinex offers a full suite of blockchain investment services.

  • Flexibility

Bitfinex’s pioneering spirit translates over into more functionality and flexibility for users. For example, Bitfinex allows fiat currency deposits in USD, EUR, GBP, JPY, and CNH. This flexibility saves investors and simplifies the investment process significantly. 

  • Security

Every hack has made Bitfinex stronger. The platform now features some of the most advanced security protocols available. You gain access to features such as two-factor authentication, lock withdrawals when a new IP address, withdrawal confirmation phrases, the ability to disable withdrawal addresses, and PGP email encryption.

  • Liquidity

Liquidity is the main draw for Bitfinex. Traders are sure to meet their orders when using this popular exchange. At the time of writing, Bitfinex ranks fifth in market capitalization with a 24h Trading Volume of $527,871,588.

How Does Bitfinex Exchange Work

The Bitfinex ecosystem relies on various state-of-the-art services and technologies to provide users with a top-level experience. The platform offers all the basic exchange functionalities you would expect alongside a plethora of new and exciting features. Specifically, Bitfinex integrates six core features:

  • Exchange Trading

Primarily, Bitfinex is a digital assets exchange. The platform features order books for the spot trade of digital tokens. From here, users can deposit, trade, and withdraw digital tokens. Bitfinex supports 165 coins and 313 trading pairs at this moment.

  • Margin Trading

Another feature that helped Bitfinex secure its position in the market is margin trading. This feature is only available to qualified users. These investors can trade with up to 5x leverage. Notably, this funding is provided via a peer-to-peer financing protocol.

  • Margin Funding

Users gain the ability to earn rewards for lending out their crypto within the Bitfinex ecosystem. The platform introduces a P2P financing market that enables anyone to earn interest on their digital assets via smart contract powered lending protocols.

  • Over The Counter Market (OTC)

Another unique feature that makes Bitfinex special is its OTC services. Bitfinex’s private OTC Market allows large traders to conduct multimillion-dollar trades securely and in a personal manner. 

  • Derivatives Trading

Bitfinex is one of a few exchanges to offer the trading of derivatives. Users can trade with 100x leverage using these services. Of course, you will need to receive verification to qualify for these services. Interestingly, Bitfinex chose to utilize iFinex Financial Technologies Limited to bring this feature to the public.

  • Paper Trading

Paper trading is one of the best ways for you to sharpen your investment skills. Users can test and experiment in a simulated market to see how they would fare in the real situation. If you are new to the crypto market, this is one of the best ways to gain experience. Best of all, the service is free and requires no deposits to use.

3 wallets

Bitfinex relies on three wallets to keep its ecosystem functioning smoothly. Each of these wallets plays a significant role in helping investors to monitor and maintain their investments.

  • Exchange Wallet

The exchange wallet is where you store your crypto when you are buying and selling on the exchange. This online wallet is centralized. Consequently, you must never leave too much crypto in your wallet at one time to limit exposure to online threats. 

  • Margin Wallet

The next wallet is for investors who are trading on margin. This wallet differs from the exchange wallet in that it provides relevant margin trading information. Such as your leverage.

  • Funding Wallet

The Funding wallet is used by investors when providing financing for other margin traders. This wallet also displayed helpful information such as how much crypto you have lent out and your profits and expected rewards. 

History of Bitfinex

Bitfinex is headquartered in Hong Kong and registered in the British Virgin Islands. The platform is owned and operated by iFinex Inc. The exchange entered the market in December 2012 as one of the first peer-to-peer Bitcoin exchanges available to the public. 

In May 2015, Bitfinex suffered its first of a series of high profile hacks. In this incident, 1500 Bitcoins were stolen. A year later, in June 2016, the firm was ordered to pay a $75,000 fine for offering illegal off-exchange financed commodity transactions by US regulators. In August of the same year, another hacker made off with $72 million in Bitcoin. Despite these losses, Bitfinex repaid its users and continues to operate as a stable in the community. 

How to Use Bitfinex Exchange

Using Bitfinex is easy. The developers made the account signup process as easy as possible. However, to meet regulators’ requirements, you will need to complete full KYC/ AML compliance. For these reasons, it takes 2-3 days on average to get your account operational.

Bitfinex Exchange – Still a Champion in the Market

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Like a fine wine, Bitfinex continues to get better. The platform now incorporates so many services that there are unlimited reasons why an investor would choose to utilize it. You can expect Bitfinex to continue to hold a spot in the top ten exchanges globally for years to come.

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