Traders of cryptocurrency can choose from many exchanges: Binance, Kraken, Gemini, Poloniex, and Bitfinex are popular exchanges. Detailed reviews of every company would fill a book, so today we will only compare two exchanges: Bitfinex vs Poloniex. Let’s see whether one site or the other emerges as a clear winner.
Bitfinex is a cryptocurrency exchange for high-volume traders: users must have at least $10,000 USD in their accounts before they can trade. Those with less money should look elsewhere. In terms of trading volume, Bitfinex is a highly ranked exchange. Recent data shows more than 16,000BTC traded on Bitfinex daily, making it the dominant bitcoin exchange by trade volume.
Persons from the United States, North Korea, Bosnia and Herzegovina, Ethiopia, Iraq, Iran, Syria, Uganda, Vanuatu, and Yemen cannot trade on Bitfinex.
Bitfinex was born in 2012. Initially, the exchange was intended only to trade bitcoin. As more altcoins entered the market, Bitfinex expanded their crypto support to meet demand.
In May of 2015, hackers stole 1,500 bitcoins from Bitfinex. In a 2016 hack, $73 million in coins was stolen from Bitfinex’ customers. Even users whose funds were not directly stolen experienced a loss in value; Bitfinex issued these users tokens in exchange for the depreciation. These hacks, and some associated legal issues, led to the company being fined by the United States for trade violations. In 2019, Bitfinex was sued by the state of New York, and it was revealed that the company had lost a large sum of money to a Panamanian firm.
The company maintains a headquarters in Hong Kong but mostly operates out of the British Virgin Islands.
Despite previous security issues, Bitfinex takes safty seriously. User accounts are protected with two-factor authentication by default. Accounts can also be protected with Universal Second Factor (U2F) authentication, which requires a physical device such as a dongle. Furthermore, 99.5% of real funds are placed into cold storage in a distributed system, keeping funds secure by taking them offline. Bitfinex uses detailed analytics to look for suspicious usage patterns. They do, however, store a number of cookies on your machine and on their servers.
Bitfinex offers many useful features. First, users can purchase cryptocurrency with debit or credit accounts through third-party processors. This makes it simple to convert currency into altcoins. Bitfinex also supports margin trading and margin funding, opening up potential revenue streams to customers. Users can also trade on a typical exchange.
Bitfinex enjoys high liquidity and offers more than 100 trading pairs. Traders can reach customer support 24/7 via email, although many issues are discussed in depth in a knowledge base page on the website.
Bitfinex charges maker fees and taker fees based on the value of the trade. With 0.1% maker fees and 0.2% taker fees for trades below a $500,000 value, Bitfinex has lower trading fees than rival exchanges such as Binance.
Founded in Wilmington, Delaware in 2013, Poloniex quickly became one of the dominant companies in the cryptocurrency exchange business. Poloniex supports a wide variety of altcoins, including Bitcoin, Ethereum, and Tron. The exchange supports 308 unique trading pairs, although it has a lower trade volume than Bitfinex, as it has fallen out of favor in recent years.
After founding, Poloniex rocketed to the top of user lists to become a popular exchange. In 2014 Poloniex’ site suffered a major hack and lost 12% of their customers’ bitcoin. The company made right with their customers, and soon became the first major crypto exchange to list Ethereum. This decision was a winner, and as trading volume increased Poloniex enjoyed rising profits and liquidity.
In 2018, payment firm Circle acquired Poloniex. To comply with regulations, the firm delisted coins that could be considered securities and implemented “know your customer” (KYC) policies that verified traders’ identities. Poloniex was blacklisted by the United States in 2019 is also off limits in Cuba, Iran, North Korea, Sudan, and Syria.
Circle is improving the user interface of Poloniex to keep it relevant. Strict KYC measures are now voluntary. You can trade with little more than an email address.
Poloniex takes security seriously. There are a number of security features in place, including DDOS protection, cryptographic DNS cache protection, air-gapped cold storage, two-factor authentication, and detailed session logs.
Poloniex values privacy and treats user accounts with confidentiality. The ability to trade cryptocurrency anonymously means that your personal information is not sold to drive advertising. However, like many cryptocurrency exchanges, Poloniex is unregulated and users should exercise their own due diligence.
Poloniex is very friendly to novice traders. For those who do not own any bitcoin or other coins, Poloniex offers the ability to deposit funds directly using a debit or credit card. Trading your currency for altcoin is simple. User reviews mention that it is quite easy to view the various exchanges and to set up trading pairs.
Poloniex supports margin trading and margin lending for those who wish to trade in this way. This exchange can be accessed through a desktop website or through a mobile application. The software that underpins both interfaces is robust, secure, and fairly straightforward.
Poloniex charges 0.09% maker and taker fees for those with a trade volume less than $50,000 USD. Binance, another leading exchange, begins their fee schedule at 0.1%.
Bitfinex vs Poloniex: The Takeaway
Comparing these two cryptocurrency exchanges provides us with a lot of information, but is it enough to declare a clear winner? The answer depends on your needs. Small volume users, those who are speculating as a hobby, or those doing market research should consider Poloniex the winner for a number of reasons: inexpensive trades, decent security, a friendly page, and good ratings.
For those who have bigger needs – those who trade in bulk – will get more value from Bitfinex. The advanced security provides peace of mind. The ability to perform margin trades and lending can bring your game to another level. All in all, when comparing Bitfinex vs. Poloniex, we declare them both a winner.