Bitfinex vs Bittrex at a Glance
Despite its troubled history, Bitfinex remains one of the world’s largest crypto exchanges. A big part of Bitfinex’s popularity is the chance to boost returns through margin trades, or by loaning funds to margin traders. A strong lineup of altcoins, as well as fiat base markets, make Bitfinex a well-rounded exchange.
Americans, however, will need to look to Seattle-based Bittrex. This highly reliable exchange offers more than 190 trading pairs on its bitcoin base market alone.
Keep reading our comparison of Bitfinex vs Bittrex to learn whether these exchanges are good fits for your trading strategies.
Where Did They Come From?
Bitfinex regularly places among the top ten cryptocurrency exchanges on CoinMarketCap’s trading-volume rankings. The exchange’s success stems from the advanced trading features it has offered since its founding. At a time when most exchanges offered little beyond simple market trading, Bitfinex allowed margin trading through peer-to-peer lending.
Bitfinex’s history, however, has not been perfect. CoinDesk documented a series of systems failure in the exchange’s early years that earned Bitfinex the moniker Bugfinex. In addition, some crypto enthusiasts have questioned the exchange’s virtual structure. Although Bitfinex is officially registered in the British Virgin Islands, the exchange has no fixed office.
More seriously, American banks turned a skeptical eye on Bitfinex over the past several years and refused their customers’ wire transfer requests. The exchange is still unable to accept American customers.
The biggest embarrassment came in 2016 when hackers stole $65 million worth of bitcoin from Bitfinex’s hot wallet. This occurred months after the US Commodities Futures Trading Commission (CFTC) fined the exchange $75,000 for a number of violations.
Late last year, the CFTC began investigating Bitfinex again, this time for its relationship with Tether. The companies share a CEO and several executives. The CFTC issued a subpoena to both Bitfinex and Tether, but would not comment when both Reuters and Bloomberg asked for the reason.
Software developers who built their careers at Amazon and Microsoft decided to start Bittrex in 2014. Their expertise in enterprise-class software systems and cybersecurity led them to believe that the exchanges of the time would not be able to scale with cryptocurrency’s accelerating popularity.
Building Bittrex to run on the Microsoft Azure cloud computing platform gave Bittrex an advantage in 2017. When many exchanges struggled to keep their trading engines running, Bittrex was able to add more computing capacity to weather the storm.
Bittrex’s support and verification processes, however, were not cloud-based and soon were overwhelmed by the massive influx of new customers. Bittrex stopped letting people join the exchange in late 2017. By early 2018, a cooling crypto market and system upgrades allowed Bittrex to allow new customers again.
At the peak of the 2017 bitcoin bubble, Bittrex was clearing more than $3 billion in trades every day. Today, trading volume has declined to about $90 million.
Supported Currencies and Listing Policies
While leveraged trading has always been a key selling feature for Bitfinex, the exchange also built its business on having a healthy listing of altcoins with high trading volumes. Even today you will find more than sixty cryptocurrencies trading in the base markets for US dollars, bitcoins and ether.
Bitfinex also has a strong lineup of trading options in fiat currencies. Besides the US dollar base market, the exchange lets you trade select coins with the euro, Japanese yen and British pound.
Bittrex offers a much larger number of cryptocurrencies — more than 190 of them trade on the bitcoin base market. In the smaller base markets, customers can also trade altcoins for ether and tether.
In May 2018, Bittrex launched a US dollar base market with 3 trading pairs. At the moment, however, this market is only available to the exchange’s corporate customers in the states of California, New York, Montana and Washington.
|Bitcoin||194 trading pairs||64 trading pairs|
Bittrex has the same publicly-stated goals for new coins that most exchanges claim: a solid team with an innovative project. Beyond a simple FAQ for altcoin project teams, however, Bittrex does not provide much guidance for getting a coin listed.
At the same time, Bittrex aggressively reviews the altcoins on its exchange to make sure they still comply with its standards. The three-pronged approach Bittrex takes includes:
- Scam bounties – like the bug bounties paid to white-hat hackers, scam bounties pay those who find altcoins that aren’t on the up-and-up.
- Vetted coins – an expert reviews an altcoin’s code and certify that the code is valid.
- Regualr security checks – spot-checks ensure that altcoins can’t be double-spent and that prjects still comply with Bittrex’s standards.
With its smaller altcoin listings, Bitfinex provides about as much guidance to people seeking to get their projects listed on the exchange as does Bittrex. In addition to compelling technologies and convincing professional backgrounds, teams must show they have a large enough customer base to justify the listing and a strategy to support those customers.
Security and Hacks
As mentioned earlier, Bitfinex lost $65 million dollars worth of bitcoin in 2016. Bitfinex absorbed the losses, although not right away. First, the exchange slashed its customers’ bitcoin balances by 36% to reflect the loss of bitcoin. The exchange offered IOUs in the form of tokens linked to Bitfinex’s profits. By charging higher fees and riding the growth in bitcoin trading, Bitfinex was able to pay all of its customers back within eight months.
Today the exchange keeps all but 1% of its customers’ assets in cold wallets. Manual authorization from multiple managers is the only way to transfer funds into the Bitfinex hot wallets.
When it talks about security, Bittrex focuses on the experience of its founders. Bill Shihara, the company’s CEO, led the anti-malware team at Blackberry and managed security engineering at Amazon. Shihara’s co-founders are also enterprise security software developers with long careers at Microsoft and Amazon.
Availability and Identity Verification
Bittrex serves most Americans, including customers in New York. Although the State of New York has not granted the exchange a BitLicense, Bittrex’s BitLicense application grandfathers the exchange in.
Bitfinex sets policies that discourage first-time traders from joining the exchange. For a while, the exchange required an initial deposit, fiat or crypto, of $10,000 (since reduced). If that doesn’t make things clear, Bitfinex’s own support site tells newbies to “try another, more straightforward platform first and return to Bitfinex later.”
Bitfinex has also withdrawn completely from the US market, saying “Bitfinex is not based in the United States. Exchanges based in the U.S. are better positioned to properly service retail U.S. customers.”
The exchange’s troubled relationships with American banks are also part of the reason. As more and more US banks refused to pass funds back and forth with Bitfinex, the exchange gave its US-based traders a 90-day notice to close their accounts. Blaming the US market’s high regulatory cost and low trading volume, Bitfinex walked away from America.
Only Bitfinex traders who want to deposit or withdraw fiat currencies have to go through the exchange’s verification process. Even then, the information required consists of contact information, proof of identity, proof of residency, and a bank statement proving you can actually afford to do business on the exchange.
Bittrex, by contrast, has a tiered verification process. An email address is all that’s required to deposit cryptocurrencies and make trades. That verification level, however, does not unlock withdrawals.
Customers who verify their identity can make withdrawals, but are limited to a single bitcoin per day. You can bump up the withdrawal limit to 100 bitcoin per day by activating 2-Factor Identification.
Trading, Fees and Apps
The Bitfinex web app lets traders place orders and manage their risk through stop-limit and trailing stops. With margin trading, a long-time favorite feature on Bitfinex, you can borrow from other Bitfinex customers and place leveraged orders to maximize your returns.
Bittrex does not allow margin trading on its exchange, but it allows market and limit orders on its cryptocurrency exchanges.
In another move to discourage small-time traders, Bitfinex charges fees for all fiat and crypto deposits worth less than $1000. Withdrawals also get hit with fees.
Traders must pay for each trade they make. Bitfinex rewards market makers with lower fees (0.1%) than those market takers (0.2%) pay. Volume discounts do not kick in until traders’ 30-day trading volume passes the half million dollar level. You must conduct millions of dollars in trades every month to bring Bitfinex’s fees to their lowest levels.
Bitfinex also charges a 0.1% fee on the interest earned on peer-to-peer loans.
Surprisingly for an exchange that markets itself to advanced traders, Bittrex charges 0.25% for all trades. Nor does Bittrex reward market makers or high-volume traders.
Of the two exchanges, only Bitfinex offers mobile apps. While the Android version gets a 3.9-star rating, the iPhone app only gets a 2.8-star rating. A bad user interface and performance issues are common complaints that drag the reviewers’ scores down.
Customer Support and Community
Both exchanges offer self-directed knowledge bases and ticket-based support services. Bitfinex has begun experimenting on its moderated subreddit. Each week, the company’s moderators open a new post where customers can post their open support tickets. This does not get an instant resolution, but does flag the support ticket for more immediate action.
Bitfinex recently hired Peter Warrack to be the exchange’s chief compliance officer. A veteran of the Canadian banking industry, Warrack’s mandate is to ensure the exchange meets its regulatory obligations.
At the same time that Bitfinex was hiring a fiat-world insider to deal with regulators, Bittrex was hiring its own financial players. John Roth left his job as the US Department of Homeland Security’s inspector general to become Bittrex’s chief compliance and ethics officer. Prior to that role, Roth had headed up anti-money laundering activities at the US Department of Justice.
Roth and former Department of Justice Deputy General Counsel Kiran Raj, now Bittrex’s chief strategy officer, are spearheading Bittrex’s relationships with state and federal regulators in the United States. The two explained why they jumped from the fiat world into the crypto world:
“Our mission is to develop the most trusted cryptocurrency exchange in the world, and we believe the breadth of experience that these individuals bring will be critical to achieving that goal.”
Bitfinex seems to be trying to put its troubled past behind it by revealing more about its leadership team and hiring a respected compliance veteran. Though it still doesn’t accept American customers, Bitfinex offers crypto traders many attractive features.
Bittrex’s steep fees may discourage high-volume traders, but you will be hard-pressed to find an exchange with such solid systems and huge altcoin listings.