In previous articles, we have written about Binance, Bitstamp and Coinbase. Now, we will be making a full Bitfinex review that would help you understand how this cryptocurrency exchange works. As the other exchanges, Bitfinex is known for having a large trading volume and liquidity.
The exchange is also known for offering several trading pairs and supporting the Ripple (XRP) digital asset. In this Bitfinex review, we will also share with you which are the benefits of using this platform. The article will also make a general overview of the services provided by this crypto exchange.
Bitfinex Review - Basic Information
The first thing to mention about Bitfinex is that it was created in December 2012 in Hong Kong. It started offering trading services to enthusiasts and traders from all over the world. The founders of the platform were Giancarlo Devasini and Raphael Nicolle.
At that time, there were just a few cryptocurrency exchanges and the industry was starting to move forward. Thus, Bitfinex played an important role in order to help cryptocurrencies reach new users. This decision allowed Bitfinex to become one of the largest and most recognized platforms to trace cryptocurrencies in the world.
One of the main characteristics of Bitfinex is the fact that it has a large number of trading pairs. This is very useful for individuals and enthusiasts that want to have a diversified crypto portfolio. Furthermore, this was very useful for traders and investors that enjoyed the Initial Coin Offering (ICO) boom.
This is one of the main differences that the exchange has with other platforms such as Coinbase or Bitstamp. However, this is very similar to Binance, which has also focused on adding a large number of trading pairs. This feature is usually appreciated by users that want to have a large number of coins to purchase.
Bitfinex is also recognized for being an old and established virtual currency exchange and platform. This can make users sure that their funds will be secure and that they will offer high-quality solutions. In the next sections of this Bitfinex review, we will be sharing with you which are the services they have.
As mentioned before, Bitfinex is offering basic cryptocurrency trading solutions. This is something that other exchanges in the market are already offering. However, the main goal of the exchange is to provide a large number of trading pairs.
Bitfinex is also related to Tether (USDT), the largest stablecoin in the world. This digital asset allows users to hedge against volatility in the market from traditional cryptos. Tether has a value of $1 and the company behind the exchange claims it is backed by different assets.
Thus, Bitfinex has a smooth integration with the largest stablecoin in the world. At the time of writing this article, Tether as a valuation of $4.64 billion.
Not only Bitfinex offers traditional crypto exchange services but they are also providing margin trading to traders. Margin trading allows users to trade with leverage up to 3.3x in this platform. In order to do so, users receive funds through the margin funding provided by the exchange.
Bitfinex Margin Trading
Margin trading is specifically useful for traders that want to increase their profits. Although this is highly risky, it can be very profitable for trading experts that know where the market is headed. When using margin to trade cryptocurrencies users should also use stop-limits orders to reduce their exposure.
In addition to the aforementioned services, users can also lend their virtual currencies. This will provide margin traders with some funds in exchange for a small interest. Lenders can offer their funds for any period they want and for the interest rate they desire. This can be a very good way to earn some extra income with funds that are stored in the platform.
It is worth mentioning in this Bitfinex review that the exchange has set up an over-the-counter market (OTC). This is a great solution for traders that want to handle large trades. This would reduce massive orders in the spot exchange, which could negatively affect volatility.
All the trades performed through the OTC market would provide access to larger liquidity. This is also a feature that is available for Binance traders.
Despite being one of the most popular exchanges, the platform experienced a hack in 2016. This resulted in the loss of almost 120,000 BTC from users. Nowadays, this would be worth around $1 billion. We recommended to store virtual currencies, specifically large amounts, in hardware wallets. At the moment, only Coinbase was not affected by a hack.
Bitfinex Ripple Integration
In this Bitfinex review, we will also talk about how the exchange integrated Ripple (XRP). Since early 2017, before the bull market in the crypto space, Bitfinex added XRP support. This allowed the platform to attract a larger number of users to trade virtual currencies.
This is in line with what other exchanges have done, including Binance, Bitstamp and later Coinbase. XRP is the third-largest cryptocurrency in the world in terms of its valuation after Bitcoin (BTC) and Ethereum (ETH). It cannot be excluded from large exchanges.
Although this is very useful for traders, there is no direct integration between Bitfinex and Ripple’s services. For example, Ripple is now offering a platform and network to make cross border transactions. Some crypto exchanges are working as liquidity providers for these transfers.
In the future, if the Ripple network and business expand, Bitfinex could play an important role. Nonetheless, this is just speculation considering there is nothing discussed on this matter.
In this Bitfinex review, we aimed at sharing with the reader some of the advantages and disadvantages of this exchange. As previously mentioned, there are many services offered by Bitfinex.
Bitfinex is clearly one of the most recognized exchanges in the world. It is offering a wide range of solutions and it is moving forward with the whole space. With its Tether integration and margin trading services, users will find in Bitfinex a great platform to handle digital assets.