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Bitstamp

Bitstamp Review
Trader's rating 1
Editor's rating 3.9

Our Experience

We registered an account at Bitstamp and after confirming the ID, we decided to make a credit card deposit. What first stroke us, was the fact you can only directly buy Bitcoin via credit card, instead of simply transferring funds to your account. The purchase went fine, after dealing with an external payment services provider. We immediately sold the coins, in order to have a USD trading balance. At that point we realized the 8% fee on credit card transfers (at the time, now the fee is 5%) truly applies.

 

Later on, we traded with the platform and everything felt fine. While the speed of execution was slightly lower than the one provided by most forex trading platforms, it was still pretty decent. The order book seemed to have some trading robots, which moved the best bids/asks constantly, but this didn’t hinder trading at all.


We also made a SEPA Bank transfer to this exchange. The funds arrived less than 24 hours later and the only fees we paid were the ones charged by our local bank.

 

We ended up having some Litecoin, which we transferred to Bittrex, in order to continue our journey in the world of altcoins. Additionally, we left some Ethereum, which we sent to a newly created wallet at MyEtherWallet – a wallet, which allows users to control their private keys. All of these blockchain transactions, which are external to Bitstamp happened in minutes. We are yet to test the speed of bank transfer withdrawals, from this exchange.

 

Trading Accounts

Account type Minimum deposit Leverage Fee
Standard Undisclosed N/A 0.25%*

*Fees can go lower for bigger traders

 

Bitstamp is one of the few cryptocurrency exchanges which accepts deposits directly from traditional payment methods. In essence this service can be used to obtain Bitcoin (via a bank transfer or credit card) which you are then free to send.

 

The company, security of funds

Company Country Regulation
Bitstamp Ltd. Luxembourg CSSF

 

Bitstamp Ltd. is the company behind this project. They have offices in Luxembourg, London and New York. More importantly, this is the first fully licensed cryptocurrency exchange in Europe. It is regulated by the (Luxembourg Financial Industry Supervisory Commission, known as the CSSF). As we often warn against the risks involved in dealing with unregulated or off-shore forex brokers, it is nice to see a company in the cryptoverse, which is registered with a watchdog.

 

The CSSF Licensing ensures the company periodically files reports with the appropriate agencies. Bitstamp is registered as a “Payment institution”, which implies you can be sure about the real-money transfers you send to (and receive from them). That being said we don’t know if mandatory policies on fairness of execution are in place. No matter the case, this is much more than, what most other crypto-exchanges provide in terms of regulation.

 

Bitstamp was hacked in early 2015. Afterwards the company rebuild its entire trading platform. Nowadays they claim to store 98% of their client’s cryptocurrencies on cold storage, while only 2% are directly available on the exchange. This is a major improvement in terms of security.

 

Bitstamp partnered with Swissquote, in July 2017.  The Swiss bank and broker, decided to trust this company, in order to provide Bitcoin trading to its clients. This speaks volumes in terms of Bitstamp’s credibility. At the time of writing of this review, there is no integration with the MetaTrader4 (MT4) platform. Trading is instead done on the Swissquote’s website, with limited functionality. This is bound to change in the future. 

 

The user reviews for Bitstamp are fairly mixed. There are lots of satisfied customers and people claiming dissatisfaction with the support. Similarly to Poloniex, the company may be experiencing more significant traffic than expecting, but the negative comments are not that harsh. 

 

Trading conditions

 

Trading instruments (cryptocurrencies)

Bitstamp allows trading cryptocurrencies against the old-fashioned EUR and USD. On the other hand few coins are supported, namely Bitcoin, Ethereum, Litecoin and Ripple. If you want to dive into more exotic altcoins, you can use Bitstamp as a way to convert your cash into one of these three and then transfer it to a different exchange which supports your preferred altcoin.

 

Minimum initial deposit

There is no information on the minimum deposit at Bitstamp. While this is not that unusual, when dealing with cryptocurrencies, the company does accept traditional payments. There may be a level below, which they would not accept your transfer. We are used to forex brokers disclosing their minimum entry levels beforehand, like easyMarkets, who require $100.

 

Leverage

Margin trading is not available at Bitstamp. For those of you who do not know what margin trading is – this is a mechanism by which you trade with more buying power than the money you have in your account. When it comes to froex brokers, they allow substantial leverage levels, like 1:500, meaning you can trade with positions worth 500 times more than your investment. The catch is your account serves as a guarantee, and if you start loosing, there will be a point at which your positions will be closed (this is known as receiving a margin call, followed by a margin stop-out).

 

Fees

The commissions, charged by Bitstamp go as high as 0.25% for cash to cryptocurrency trades (for the lowest volumes). As is the practice with most other exchanges, they go lower with bigger volumes. The unusual aspect of this offering is that there is no incentive for the market “makers” (people who place orders on the exchange, instead of aggressively buying from the ones which other traders have placed). Most cryptocurrency exchange provide an ever so slightly lower fee for traders who provide liquidity.

 

Comparing this to the spreads provided by forex brokers is rather hard, as we have mentioned in our general comparison of the two type of service providers. On the other hand, Bitstamp’s fees are in-line with what other cypto-exchanges are offering.

 

 

Trading platform

 

Bitstamp’s trading platform is web-based. This is the norm with most cryptocurrency exchanges, unlike the situation with forex brokers, where downloadable software (like MT4) is prevalent. At first glance Bitstamp’s trading platform looks solid. A big emphasis is placed on charting, with a nice package. It feels pretty similar to cTrader, although it lacks a lot of the functionality. Lots of technical indicators and tools are available, but most forex trading platforms still provide even more options. That being said Bitsatmp’s offer is better that what we have seen at a lot of other crupto-exchanges. Here is a preview of the charting (click to zoom-in):

 

 

The order book is located below the chart and is one of the best ones available (at such exchanges). Here is a screenshot (click to zoom-in):

 

 

It was clearly designed by someone with trading experience as the bid and ask price are next to each other, where the two tables meet (on the left). This allows for a quick and easy comparison of the market depth, although the size of the orders (outer columns) must also be taken into account.

 

Methods of payment

 

Bitstamp accepts payments via Bank Transfer, Credit/Debit Card and cryptocurrencies. There are some specifics regarding the bank transfers, with EU clients being more easily accepted via the SEPA System. While this system is relatively faster than traditional bank transfers, it may come at higher fees (depending on your bank). On the other hand Credit Card transfers, while instant, come with an 8% fee. That being said, virtually anybody can transfer fiat currencies to this exchange. This feature is probably their biggest advantage over others.

 

Conclusion

 

Bitstamp is the first regulated European cryptocurrency exchange. The company keeps 98% of customer’s coins on cold storage wallets, which is a pretty good security measure. Bitstamp is one of the relatively few exchanges who accept deposits by Credit Card and Bank Transfer. Three of the major coins are traded directly against EUR and USD. On the other hand the exchange offers few alternative coins. In essence this is a great gateway for those who are new to the world of cryptocurrencies. Here is a summary Bitstamp’s strong and weak sides:

 

Pros Cons
Luxembourg licensing Few altcoins available
Accepts Bank Transfers and Credit Cards Was hacked in 2015
Competitive commissions 5% fee on credit card purchases
Relatively nice trading platform  
98% of coins kept in cold storage  

 

Ethfinex

Ethfinex Review
Trader's rating 4.7
Editor's rating 3.8

Trading Accounts & Conditions

 

Account type Leverage Maker Fee* Taker Fee* Deposit Fee Withdrawal Fee**
Standard 1:3.3 0.0% - 0.1% 0.1% - 0.2% 0.1% for Bank Wire only 0.01 ETH

 

* Trading fees depend on users’ trading volume.

**Withdrawals in Status (SNT) & Golem (GNT) are free of charge.

 

As it name suggests, Ethfinex is a cryptocurrency exchange, which is heavily connected to Ethereum. Another thing one could tell by this venue’s name is that it belongs to a group of companies around one of the oldest and most popular exchanges, Bitfinex. Its parent company also runs the Tether.to platform.

 

Trading is live on Ethfinex for all existing Bitfinex users since December 29th. New signups will be available from January 15th. Currently still in beta, Ethfinex platform allows for trading in ERC-20 compatible tokens and Ethereum-based crowd sales with options for margin trading, as well as access to a peer-to-peer funding market. By the time of writing of the present review, the exchange is in the top 15 by trading volume at CoinMarketCap.


In addition, it offers a token of its own, called the Nectar token (or NEC). It is given for free to token market makers in proportion to the volume of trades they participate in on the exchange.

Ethfinex’s security is based on the expertise gained by Bitfinex’s team. The majority of system funds are stored in offline, in ‘cold’ wallets. Only around 0.5% of all crypto assets are accessible in ‘hot’ wallets for day-to-day platform operations. 

 

Ethfinex Advantages

 

Hybrid decentralized exchange, part of a trusted group

Ethfinex is planned as a hybrid decentralized exchange. In the long term, the company plans to move towards a completely trustless exchange, steadily decentralizing ownership of the platform to its community of users. The company’s team has learned the hard way that running an exchange on a centralized server is dangerous. Bitfinex was hacked in 2016, and approximately US$72 million was stolen in the form of Bitcoin. Eventually, the company managed to pay back the money to all its clients.

 

On the other hand, decentralized exchanges do not store coins, funds, private keys or user information on centralized servers, thereby making it very difficult for hackers to compromise sensitive information.

 

Competitive fees

At Ethfinex market makers are charged up to 0.1% per trade, and market takers – up to 0.2%, which is in line with the average pricing in the crypto world these days. Those users who trade in large volume get discounts. By the way, Bitfinex has exactly the same trading fee structure.

 

Deposit and withdrawal fees by Ethfinex are also competitive. Deposits in digital assets are free of charge, while those in USD are charged with 0.1%. Withdrawal fees of this exchange are also in line with the average in the industry.

 

 

Leveraged trading available

Similarly to its older brother Bitfinex, Ethfinex provides margin trading. The maximum leverage level available at both exchanges is 1:3.3. If you want to speculate aggressively with the price of Bitcoin or Ethereum, there are some forex brokers that offer higher leverage ratios.

 

>>Forex brokers offering leveraged Ethereum trading<< 

 

We must mention that trading in volatile assets such as cryptocurrencies involves risk of loss, which are multiplied if you use leverage. So, be careful when trading on margin.

 

Many Ethereum-based coins available

Ethfinex offers trading in decent amount of Ethereum-based tokens, such as Ethereum, OmiseGO, EOS, Aventus, Status, Golem, and more. Although its crypto portfolio cannot be compared to the one offered by EtherDelta, the trading volumes at Ethfinex appear higher on most instruments.

 

Fiat accepted, bank wire transfers supported

This exchange accepts US dollars, one of the most popular “traditional” currencies.   This makes the services offered by Ethfinex more accessible to beginner traders, as it accepts cash payments via bank wire transfer.

 

Community vote for listing tokens

One of the biggest problems with most centralized exchanges is their reluctance to list tokens with a large community backing. That is why we consider Ethfinex’ decision to list new tokens after rounds of voting by the crypto-community as an advantage.

 

Ethfinex Disadvantages

 

No Bitcoin

As this platform is dedicated to Ethereum and ERC-20 tokens, you canot trade in Bitcoin on Ethfinex. However, you can always do that on the group’s Bitfinex platform. 

 

Registered offshore

While Bitfinex is operated by Hong Kong based iFinex Inc., the company operating this exchange, Ethfinex Inc., is registered offshore. According to its Terms of Service, the governing law is the one of the British Virgin Islands. Companies registered offshore generally do not inspire a lot of trust.

 

Dependent on the Ethereum network 

If there is serious backlog on the Ethereum network, the activity at Ethfinex will also become slow, as trading is done mostly against ETH.

 

Conclusion

 

Launched by an established group in the cryptocurrency world, Ethfinex seems like an attractive exchange, especially to fans of Ethereum and Ethereum-based coins. It is planned like a platform based on a hybrid decentralized architecture, that will allow decentralized exchanges to plug into it and trade with Ethfinex customers, as well as each other.

 

Now in beta, Ethfinex is accessible to Bitfinex account holders with competitive trading and transfer fees. There is a decent amount of altcoins available to trade at the exchange, and besides, cash is accepted. Similarly to Bitfinex, Ethfinex provides leverage up to 1:3.3, which is a nice extra feature that most exchanges do not offer.

 

Although little to no regulation is applied to the crypto-exchanges in most jurisdictions, we don’t like the fact that Ethfinex Inc. is registered offshore. As we mentioned above, some forex brokers offer CFDs on digital assets. For those ofyou who prefer to invest in regulated entities, we have prepared a list of well-regulated ones.

 

>> Regulated Bitcoin forex brokers<<

 

Here is our summary of this exchange:

 

 Pros

 Cons

 Hybrid decentralized exchange, part of a trusted group

 No Bitcoin

 Competitive fees

 Dependent on the Ethereum network

 Leveraged trading available

 Still in Beta

 Many Ethereum-based coins available

 Registered offshore

 Fiat accepted, bank wire transfers supported

 

 

 

Forex
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