Even as they understand the risks involved, many people are interested in starting a part-time career in Bitcoin trading. We can’t blame them, either, considering the ROI that some people have made after some real moves. However, buying Bitcoin, a Blockchain-based cryptocurrency isn’t something you can or should randomly do. It would be best if you had a Bitcoin exchange.
The first thing you must do is find the right trading platform for getting some Bitcoins to begin with. There is Binance, Gemini, Monero, Kraken, Bittrex, among others. Now, talking about cryptocurrency exchanges, Coinbase and Bitfinex are two of the industry’s most established names. So, it is natural that you may be a little confused about making the right pick.
Well, a coin-toss isn’t going to help you, of course. However, a brief comparison of both exchanges will! To make things easier, we have precisely done that in this article. We have compared both Coinbase and Bitfinex based on aspects that matter when buying a Bitcoin (BTC) or altcoins such as Bitcoin Cash (BCH), Ethereum (ETH), Tron (TRX), Ripple (XRP), Litecoin (LTC), and stablecoin such as Tether (USDT).
We’ll start with a basic introduction to both services.
Coinbase vs Bitfinex: Credibility
Founded in June 2012, Coinbase has its headquarters in San Francisco. One of the go-to names for crypto trading allows users to trade cryptocurrencies. Since then, Coinbase has built a reputation for being the beginner’s place for all things cryptocurrency. As of 2019, this company had a total revenue of more than $1 billion.
Bitfinex also made its debut in 2012, but the company is headquartered in Hong Kong. Having said that, it has a registered office in the British Virgin Islands. However, compared to Coinbase, Bitfinex had a not-so-stable growth due to several issues, including instances when money was stolen from customers’ accounts. It has, however, managed to retain customers by offering a specific set of features. Nevertheless, Bitfinex has been trying to improve its characteristics over time.
Coinbase has had a pretty decent history as an early cryptocurrency exchange. Since its launch in 2012, the firm has seen an increasing number of customers, thanks to the intuitive User Interface, among other things. There were a few allegations about how the company had violated thousands of customers’ piracy, but Coinbase had denied all the allegations, saying that no data was lost. The exchange has also been criticized for taking a massive commission from trading transactions.
Bitfinex had faced even bigger problems from the beginning, though. First of all, Bitfinex is not a transparent company when it comes to numbers. Because it is headquartered in Hong Kong and all the legalities come under HK jurisdiction, we cannot be sure about the exchange numbers. Furthermore, Bitfinex has been subjected to several hacking attacks, where vast sums of money were stolen by attackers, putting several things at stake.
Here are some things you should know about the hacking that Bitfinex was subjected to.
When did the hack occur?
The event in question occurred in 2015 when customers of the exchange faced the attack. In this attack, hackers stole Bitcoins worth $400,000. The more significant attack happened in 2016, which witnessed the loss of $73 million from customers. The second attack had a noticeable impact on the trading price of Bitcoin as well.
When did they return the money to investors?
Something that made people trust Bitfinex is that they managed to return every penny that was stolen. The hack occurred in August 2016, and the paid back all of its investors their dues in September 2016. It, too, had an impact on the trading volume and price figures of Bitcoin and USD.
How many Bitcoins were stolen?
In a major attack, hackers stole 120,000 units of Bitcoin from Bitfinex customers. Back then, the coins were valued at around $72 million. Although Bitfinex reimbursed some of the stolen Bitcoins, most of them are gone with the wind.
Coinbase is a US licensed company, and it has its headquarters in San Francisco. It also means that the firm faced no trouble onboarding customers from the United States. It means that customers from the US can access Coinbase without any trouble.
Bitfinex has, on the other hand, a complicated relationship with US licensing. The company has even exited a few markets like Washington because it could not obtain a license. Due to this, Bitfinex does not allow users from the United States to access its crypto exchange and trading services.
Coinbase vs Bitfinex: Features Comparison
Now that we know enough about both Coinbase and Bitfinex, shall we have a look at the features that the firms have to offer? Sometimes, you may have to pick one over the other for the sake of features.
Fiat Currencies/Bank Transfer/Cryptocurrency Options
Because Coinbase is very beginner-friendly, making payments on the exchange is easier. You can purchase Bitcoins from Coinbase using other cryptocurrencies, credit/debit cards, and direct bank wire transfer. By the way, if you live in the UK, EU, or the US, you can connect your Visa Fast Funds-enabled credit and debit cards for instant card withdrawal as well. Coinbase takes up to 1-5 days, 1-2 days, and one day to get the money to the US, EU, and UK customers’ bank accounts, respectively.
Bitfinex allows users to deposit funds using fiat currencies and cryptocurrencies. As for trading pairs, in fiat currency, only a few like USD, EUR, GBP, JPY, and CNH are supported. You must also have a fully verified account, the process for which would take several weeks. Similarly, to withdraw money, a verified account is required, and the minimum value is $60. The withdrawal process may take up to 15 days. If you pay more, you can get the funds withdrawn within one business day.
Minimum Account Equity
Coinbase does not require minimum account equity. It means that you can get started with Coinbase even if you want to invest a meager amount.
Bitfinex, on the other hand, has minimum account equity of $10,000. Unless you have this amount, you’d not be able to use the platform for trading. It is a big problem for those who are just getting started.
Coinbase supports a vast number of cryptocurrencies and keeps the list updated. Some known ones are Bitcoin, Ethereum, XRP, Chainlink, Bitcoin Cash, Litecoin, EOS, Tezos, Stellar Lumens, USD Coin, Cosmos, Dash, Ethereum Classic, Zcash, Maker, OMG Network, Dai, and Kyber Network.
Bitfinex also keeps its pace when it comes to supported cryptocurrencies. You can buy Bitcoin and other cryptocurrencies like Litecoin, Ethereum, Ethereum Classic, and Bitcoin Cash. You may also be able to sell or purchase cryptocurrency tokens that you cannot find support for in Coinbase.
The fee structure on Coinbase depends on the method you use for the transaction. For instance, if you plan to buy cryptocurrency using a credit card, you can avail of 4 percent trading fees. However, if you plan to do the same via bank account, you will be charged 1.49 percent of the entire transaction. The prices do vary based on the country you are residing in as well. ACH transfer and Coinbase USD Wallet are the only options that can give you some discounts.
When it comes to Bitfinex, the exchange follows a maker-taker fee schedule, but the final fees you pay per transaction is low compared to those of Coinbase. For instance, when you buy or deposit using your bank account, you have to pay a fee of just 0.2 percent, which is very competitive. This is one reason why people consider Bitfinex, despite the several issues it has had in the past. You can always check out the fee schedule on the official website of Bitfinex.
Coinbase does not offer support for margin trading, which comes as a limitation for some people. They provided some margin trading processes in the past, but the features are being shut down. Also, the features were available in Coinbase Pro only.
Bitfinex, on the other hand, still offering margin trading options:
Is it possible to margin trade on Bitfinex?
Yes, users who have a verified account can start margin trading on Bitfinex. This option allows the customer to borrow money from peer to peer network funds and use it for trading. It is an excellent opportunity for those who want to step up their cryptocurrency trading game.
Coinbase offers a variety of ways to reach customer support. However, even before that, its coverage of FAQ and Knowledge Base will help you clear most of your doubts. However, if you still have queries, you can either use the ticket system or contact the support team via Live Chat. They do not offer telephone support at this point.
Bitfinex also employs a similar system for customer support. We noticed that the Knowledge Base and Help Center articles are detailed, providing enough information for the Pro users. If you can’t find what you are looking for, you can always exchange emails. We didn’t find an option for a live chat option on Bitfinex, though.
Coinbase has one of the uncompromised security systems compared to other crypto exchanges across the world. The company pays enough attention to ensure that the users have sufficient freedom while keeping things under a security radar.
In the case of Bitfinex, things are complicated again.
Is BitFinex Safe in 2021?
The last known attempt of hacking that Bitfinex saw was in 2016. However, the company didn’t have much success finding the hackers, although they did refund the stolen money. Even now, the company has put up a reward online to get the Bitcoins back.
Bitfinex claims to have improved its security after the event, which could be why we don’t get to hear about compromises on the system. Despite all these, we are not 100 percent confident that Bitfinex is entirely safe in 2021.
Bitfinex vs Coinbase Pro (GDAX)
When we compare Bitfinex with Coinbase Pro, the latter seems to be the definite winner. If you look at the sections above, you can see that the only area where Bitfinex succeeds is the fee structure. However, if you get Coinbase Pro, you can also avail 0 percent maker fee and a taker fee of as low as 0.3 percent. While Bitfinex may have a better trading volume, the problems with security persist.
Which Cryptocurrency Exchange Is Better?
Now that we have compared almost every aspect that you want to know about a cryptocurrency exchange, we can confidently say that Coinbase is the best. We have found that Coinbase offers a more secure, user-friendly, and competitive trading environment than the one we get with Bitfinex. Sure, you may be paying a higher fee to buy and sell Bitcoin via Coinbase, but there are no limitations like the ones we see on Bitfinex. In the end, Coinbase and Coinbase Pro are solid choices for beginners and experienced traders, respectively.