Category: Exchanges

The world of cryptocurrency derivatives exchanges has become incredibly crowded over the past 18 months. This increase in the amount exchanges has inevitably lead to an exponential increase in competition.

This has benefited traders who now have multiple avenues and platforms to trade with thousands of products. This however has made it increasingly difficult for new exchanges to get on the map and make a name for themselves.

Can CoinFLEX standout from the pack? In this review we hope to answer that question.

Review in Summary

In this review of CoinFLEX we will assess the exchange based on 4 key criteria. Safety, Security, and Regulation. Trading Fees. Markets and Standout Features, and finally Ease of Use. We will finish by giving our conclusion and score rating.

About CoinFLEX

Founded by Mark Lamb and Sudhu Arumugam, CoinFLEX launched in 2019. Mark has been in the cryptocurrency space since 2012 previously co-founding Coinfloor a UK based cryptocurrency exchange.

Sudhu has spent 20 years in various roles for banks and hedgefunds. Dealing with a variety of markets and trading products. From options, and stocks, to fixed income products.

Two other significant members of the team are Leslie Tam, Chief Strategy Officer. And James Cunningham, Chief Operating Officer. Leslie Tam previously worked at crypto giant Binance working on account coverage and OTC trading. He also previously worked in the traditional finance at Bank of America and Merill Lynch.

James Cunningham before joining CoinFLEX came from a quantitative and high frequency trading background. Working on UBS’ algorithmic trading desk and was a founding member of IVC Capital’s high frequncy trading hedge fund.

Safety, Security, and Regulation

Account Security

CoinFLEX has industry standard support for Google 2 factor authentication (2FA). 2FA enables users to add an additional barrier of protection. Ensuring that should an attacker have access to both your email and password they still would not be able to access your account funds.

Platform Security

In terms of platform security CoinFLEX discloses very little. This is done on purpose. CoinFLEX explicitly state on their security page that they purposely do not disclose the full extent of their security measures.

All CoinFLEX states is that they use multiple security systems and services to monitor potential exploits. These include hacking attempts, as well as denial of service attacks.

In terms of the teams track record it is strong. The team has over 7 years of experience in being a cryptocurrency custodian without a breach.

The custodian (who holds funds for CoinFLEX) for the exchange is Bitgo one of the major cryptocurrency custodians. Each Bitgo wallet also has $100 million in insurance coverage so there is some claw back should the worst ever happen.

KYC and AML

Because CoinFLEX does not deal with actual US Dollars its KYC and withdrawal restrictions are more lenient than other cryptocurrency trading platforms. Just by signing up to CoinFLEX users can withdraw up to 10000$ a day.

Users can then choose to complete KYC and withdraw over 10000$ a day. This can currently be done by emailing the CoinFLEX on-boarding team.

Regulation

CoinFLEX does not accept users from or residing in the United States of America.

CoinFLEX is registered under Liquidity Technologies Ltd incorporated in the Republic of Seychelles. This may be a red flag to some but is common practice among cryptocurrency exchanges. Cryptocurrency giant BitMEX is also registered in the Republic of Seychelles

In order to be a competitive exchange in the cryptocurrency space it is almost required that you register in jurisdictions where financial regulations are more lenient. Jurisdictions such as the EU and the USA make operating a cryptocurrency derivatives exchange almost impossible.

CoinFLEX Trading Fees

In terms of trading fees CoinFLEX is very competitive and beats out some of the largest cryptocurrency exchanges. CoinFLEX also its own exchange token FLEX. Holders of this token can get cheaper fees based on the amount of FLEX they hold. But even without holding any FLEX CoinFLEX’s fees are very cheap.

Deposit and Withdrawal Fees

CoinFLEX does not charge fees on deposits or withdrawals. Withdrawing or depositing coins will only incur network fees.

CoinFLEX Fees in Comparison to the Competition

We have made the statement that CoinFLEX’s fees are very competitive. Well how competitive you may ask. The tables below shows CoinFLEX’s fees in comparison to 3 top cryptocurrency exchanges. BitMEX, Binance, and FTX. Each exchange has their own fee structures based on trading volume and whether you hold their token or not so we are assuming the lowest fee level and holding 0 exchange tokens.

Out of these major exchanges CoinFLEX comes out significantly better. The only exchange that comes close in terms of fees is BitMEX and CoinFLEX still has a 0.015% cheaper taker fee.

Markets and Standout Features

Trading Pairs on CoinFLEX

CoinFLEX has what you would expect from an exchange in its infancy in terms of trading pairs. Currently there are 14 markets on CoinFLEX. Perpetual swaps, spot markets, futures, spread markets, and repo markets for a combination of BTC, ETH, USDT, and FLEX.

CoinFLEX’s Repo Markets

Repo markets in traditional finance are a form of short term borrowing. They are typically used to increase short term liquidity. Repo markets are often used by central banks to control the supply of money within an economy.

Repo markets work something like as follows: Seller A holds 100,000 government bonds valued at 1$ each. Seller A needs some short term liquidity. So he sells these bonds for 100,000$ to Buyer B. 24 hours later Seller A buys his bonds back for 100,500$. The additional 500$ on top of his 100,000$ payment represents the overnight interest rate. In this scenario both parties win. Seller A got the short term liquidity he needed and Buyer B earned 500$ on his spare cash.

CoinFLEX’s Bitcoin Repo works in a similar fashion. If you buy you are willing to supply your dollars for a Bitcoin. If you sell you are wanting dollars for your Bitcoin.

Buyer A has spare dollars sitting on CoinFLEX so he decides to buy 1BTC (10000$) on the repo market. Here he will lend 10000$ to the seller and receive 1BTC. Seller B now has 10000$ in short term liquidity. After 24 hours pass Seller B will buy back his Bitcoin for 10010$. The additional ten dollars again representing the short term interest rate.

Spread Market

Spread markets like repo markets are popular in traditional finance. CoinFLEX’s spread market is however the first of its kind in the crypto space.

Spread trading is essentially trading the difference between the current price of Bitcoin and the future price. The formula for CoinFLEX’s spread market is as follows: [Quarterly futures price] – [Perp price]

Spread Market Specifications

To understand this we must have a basic grasp of futures trading. Futures contracts are agreements to buy and sell a particular asset at a predetermined date. So when you are trading a futures contract you are trading the future price rather than the current price. This leads to a discrepancy in price and is the basis of spread trading.

Spread trading is often an expression of market sentiment if investors expect Bitcoin to soar then the spread between the futures and spot will too. You can read further about futures trading strategy’s in our article on futures arbitrage, alternatively you can read CoinFLEX’s contract specification page.

Despite only launching recently CoinFLEX’s spread markets has seen huge volume. Doing over 100 million dollars in trade volume which goes to show trader interest in spread markets.

Trading Competitions

One feature that CoinFLEX is hoping that will onboard new users is trading competitions. CoinFLEX has done competitions based on a variety of rulesets. The most previous one involved using CoinFLEX’s new bracket orders. There is currently plans to allow users to run their own trading competitions.

CoinFLEX Trading Competitions

There is also official CoinFLEX competitions based around its spread market planned for the near future.

Liquidity on CoinFLEX

In terms of liquidity CoinFLEX is doing well for a newly revamped exchange. With data provided by Skew we can see how volume on CoinFLEX has progressed.

As you can see the launch of CoinFLEX’s spread market brought a big boost to volume noted by the large uptick after the 20th of July as we have mentioned bringing over $100 million in daily volume.

CoinFLEX’s perpetual contract market also has decent liquidity. Where CoinFLEX falls short is in its spot markets so traders may want to look to other avenues.

Ease of Use

In terms of ease of use CoinFLEX is what you would expect from a derivatives exchange. After you go through the process of creating an account and depositing funds the trading experience is like that of any other exchange.

In the top left hand corner you have a list of available markets. Below that you have all your market information. A price chart, depth chart, orderbook, and a order entry tab.

Down the bottom is where you can view your positions, active orders, and trade records. At the very right then is the contract details for the market you are trading.

Conclusion

Now that we have assessed CoinFLEX on all our key we can finally give our conclusion and final score

Even though CoinFLEX is just after completely revamping the exchange it is still bringing exciting new trading products to the cryptocurrency space. Its Repo and Spread markets are the first of its kind in the cryptocurrency space.

Trading fees are also some of the lowest we have seen. Being more competitive than some of the largest platforms despite not having the same economies of scale.

Creating an account is also clear and straightforward. The daily withdrawal limit of 10000$ a day without KYC is also significantly higher than than that of other derivatives exchanges such as FTX.

Liquidity is good for a newly revamped exchange. But on the more niche markets it is very low. The huge volume the newly launched spread market received is an encouraging sign but this needs to continue. What will determine CoinFLEX’s success going forward like every other exchange is their ability to onboard new users.

So can CoinFLEX standout from the pack? Yes, as long as it continues innovate, and in doing so attract new users.

FTX.com has made a name for itself in recent months. Its extensive range of trading products, brand new features, and a smooth sleek trading experience has enticed many traders to sign up for the exchange.

Due to the stringent nature of US financial regulation US users can not sign up for FTX.com and so FTX.US was born. But can it live up to reputation that FTX.com set? Keep reading and find out.

In this review we will assess FTX.us on 3 key criteria. Safety, Security, and Regulation. Trading Fees. Markets and Standout Features. We will conclude by giving our conclusion and score rating.

Use the contents table below to navigate to the section most interesting or relevant to you.

1. About
2. Safety, Security, and Regulation
3. Trading Fees
4. Markets and Standout Features
5. Conclusion

About FTX.US

FTX was originally founded and launched by Sam-Bankman Fried and Gary Wang in 2019. Both founders graduated from MIT. Sam progressed on to join Jane Street a quantitative trading firm based on Wall Street. While Gary became a software engineer at Google aggregating prices for their Google flights service.

Their combined knowledge in both pricing systems and quantitative trading is what brought them both into the cryptocurrency realm. In the midst of the 2017 bull run they founded their own quantitative trading firm known as Alameda Research which set out to employ quantitative trading methods in the cryptocurrency market. This firm grew to become one of the largest trading firms in the cryptocurrency market. Currently Alameda does over $600 million in trading a day.

In an interview with Venture Coinist Sam outlined that it was the launch of Alameda Research which triggered their inspiration to launch their own cryptocurrency exchange. Subsequently launching FTX.com.

It was from the launch of FTX.com that FTX.us arrived. Hoping to take market share from already established US exchanges.

Safety, Security, and Regulation

Account Security

Like most other exchanges FTX has support for standard Google 2 factor authentication (2FA). 2FA enables users to add an extra layer of protection to their account. When you login with 2FA enabled you will be asked to enter a 6 digit pin generated on the Google Authenticator App. This ensures that even if your accounts email and password to FTX is compromised your accounts funds will still remain secure.

FTX also has support for withdrawal passwords. When this setting is enabled users will be asked to enter an additional password if they wish to withdraw funds. Again adding an additional layer of security to your funds.

Platform Security

Since launch FTX has not had a breach in either customer funds or data.

FTX uses cold storage to ensure the safety of user funds. Cold storage is where the keys to coins are kept offline which in theory can prevent hackers getting access. A smaller portion of coins are kept in a hot wallet which facilitates day to day transactions such as withdrawals.

Platform Stability

Before signing up to an exchange platform stability is always something to keep in mind. Nobody wants to trade on a platform that is going offline. It can cost traders time and money.

FTX’s platform stability has been overall very good. The platform had some minor teething issues when starting out but these have largely been resolved.

On what has been coined Black Thursday where on March 12th Bitcoin crashed by over 50%, FTX, along with every other major exchange had issues with downtime. FTX went temporarily offline for spots throughout the day and had other issues where orders were not going through. However overall it did better than average on perhaps the biggest stress test in crypto history.

KYC and AML

FTX’s KYC system is similar to that of other US based exchanges. There are 4 levels of KYC. By providing more documentation you increase your KYC level and unlock extra features. For example, increased withdrawal limits.

When you first create an account on FTX.us you will be at level 0. At this level you will have a have a life time withdrawal limit of 10,000$.

To get to level 1 you must submit basic information such as your name, state, and address. You do not have to provide any official documents at this level. By doing this you will gain the ability to withdraw up to 10,000$ a day as well as get to use ACH bank deposits.

To get to level 2 you have to provide a picture of your passport, as well as a selfie of you holding your passport.

Finally to get to level 3 you have to complete all previous levels as well as provide proof of address and a bank statement. This will remove any withdrawal limits, you will gain full wire transfers, and essentially full access to what the platform has to offer.

Completing the KYC is straightforward once you have the relative documentation at hand. Simply navigate to the KYC tab within settings. Once your application has been submitted FTX staff will review your application within 24 hours.

Regulation

Currently FTX.US does not accept users from the states of New York or Washington

FTX.US has done the utmost to be regulatory friendly with US financial lawmakers. This exchange has been built from the ground up to essentially be just that: A US based exchange so I am confident that it will stay on the good side of US financial regulations.

This does come up at cost when compared to FTX.com but we will address this later.

Trading Fees

Trading fees on FTX.us are tiered based on how much you trade. So the more you trade the less you will pay in fees as a percentage. Below is a table of the full fee schedule.

Withdrawal and Deposit Fees

FTX does not charge for deposits or withdrawals with cryptocurrency. FIAT deposits made via ACH transfers also do not incur any fees.

When using wire transfers there is a 1% fee up to a maximum fee of 35$ and a minimum fee of 5$.

FTX Fees in Comparison to the Competition

Due to the tiered nature of FTX’s fee schedule it is hard to make a direct comparison to that of other exchanges as the fees you pay are based off your trading volume. For simplicity in the table below we will assume tier 0.

As you can see from the table above one of FTX.US’ main competitors is charging much lower fees than them. At the first tier Binance.US’ taker fees are 0.3% cheaper.

One interesting point is how much more expensive fees are on FTX.US than FTX.com. The maker fee is 0.08% more expensive and the taker fee is 0.33% more. However as you go up in 30 day trading volume the fees become rather similar.

CEO Sam Bankman-Fried went on Twitter to state that this was due to the increased cost of business within the US.

Markets and Standout Features

Perhaps the largest discrepancy between FTX.com and FTX.US are the unique features and variety of markets. FTX.us is completely stripped down when compared to its sister site.

Currently there are only 6 available cryptocurrencies on the platform. BTC, ETH, BCH, LTC, PAXG, and USDT. Wiht both a USD and USDT pair. This is compared to FTX.com which has over 100 markets.

But some might say that comparing it to an exchange operating outside of the US is unfair which is true. However, if we compare it to Binance.US it still comes out well below par, with Binance.US having 3x more tradeable markets.

In terms of features on FTX.US there are very few. On FTX.com there is leveraged tokens, options trading, prediction markets, and Quant Zone. However, on FTX.US none of these are present.

However that is not to say that it is all poor for FTX.US. They’re offering up to 10x leverage on a US based exchange, they have a solid mobile app for trading on the go, and it is easy to get orders filled. The fundamentals are definitely present.

Stringent US regulatory policy may be what is holding the exchange back. We have seen this with other US based exchanges where they are incredibly reluctant to launch new markets due to the fear of catching the eye of regulators.

Conclusion

FTX’s move into the US market is a positive for the cryptocurrency market. The more competition the better off the consumer. Increased cryptocurrency business within the US may also encourage regulators to loosen the financial regulation surrounding cryptocurrency.

However, in FTX.US’ current state there is not much that would entice me to sign up to the platform. Other US based platforms currently have a clear advantage. Both in terms of fees and platform features.

That is not to say that FTX.US’ current state will be all that it amounts to. The exchange is brand new, there is still huge room for improvement and the FTX team have already demonstrated their ability to create a great platform once. Why could they not do the same again?

FTX has made waves within the cryptocurrency industry in recent months. Its vast array of products and features in combination with its deep liquidity have enticed many cryptocurrency traders to sign up for the platform.

In this article we hope to answer the question; is FTX the best up and coming exchange? And if so should you sign up for it?

Review in Summary

In this review of FTX we will assess the exchange based on 4 key criteria. Safety, Security, and Regulation. Trading Fees. Markets and Standout Features, and finally Ease of Use. We will conclude by giving our conclusion and score rating.

You can use the contents table below to navigate to the section most relevant to you.

1. About
2. Safety, Security, and Regulation
3. Trading Fees
4. Markets and Standout Features
5. Ease of Use
6. Conclusion

Founded by Sam Bankman-Fried and Gary Wang. FTX launched in 2019. Both founders graduated from MIT. Sam progressed on to join a quantitative trading firm known as Jane Street. While Gary became a software engineer at Google aggregating prices for their Google Flights service.

Their combined knowledge in both pricing systems and quantitative trading is what brought them both into the cryptocurrency realm. In the midst of the 2017 bull run they founded their own quantitative trading firm known as Alameda Research which set out to employ quantitative trading methods in the cryptocurrency market. This firm grew to become one of the largest trading firms in the crypto market. Currently doing over $600 million in volume a day.

In an interview with Venture Coinist Sam outlined that it was the launch of Alameda Research which triggered their inspiration to launch their own cryptocurrency exchange. Citing that trying to use these other exchanges was frustrating and tiresome and they thought they could bring something much better to the cryptocurrency market.

Safety, Security, and Regulation

Account Security

FTX has industry standard support for Google 2 factor authentication (2FA). 2FA enables users to add an extra layer of security to their account. After entering both their email and password users are asked to enter a 6 digit randomly generated pin from the Google Authenticator app. This ensures that should a bad actor have access to both your email and password he will still not be able to gain access to coins stored on the exchange. 2FA is compulsory on FTX.

FTX also supports additional withdrawal passwords which require users to enter an additional password to withdraw. This password is different from the one users use to log and adds an additional layer of security.

One feature which is absent on FTX but present on other exchanges is the ability to whitelist certain IP addresses. So you can only login from a certain IP. However this is not a deal breaker and may be only useful to a small percentage of users.

Platform Security

Since its foundation FTX has not had a breach in either customer funds or data.

FTX uses cold storage to ensure the safety of user funds. Cold storage means that the keys to the coins stored in FTX wallets is kept offline away from potential hackers. A smaller fraction is then kept in what are called hot wallets which are connected to the internet. These hot wallets facilitate day to day transactions on the exchange such as withdrawals.

Platform Stability

The stability of FTX has overall been very good. The platform had a few teething issues when first starting out however these have been largely ironed out. The platform like its competitors still goes down occasionally but these are rare.

KYC and AML

FTX’s KYC policy is similar to other platforms and easy to understand. There are four levels of KYC. You increase your KYC level by providing more verification and documents. By increasing your KYC level you will be allowed greater withdrawal limits, and the ability to deposit FIAT currency and buy Bitcoin directly through the exchange.

When you first register, create your account, and confirm your email you will be at level 0. This level gives you a lifetime withdrawal limit of up to 1000$. You will be unable to withdraw more once you reach this cap.

Level 1 requires you to provide your name, country of residence and your local province. FTX do not ask for documents at this level. At level 1 you gain the ability to withdraw up to 2500$ a day. However, if you trade more than the sum of all your deposits and withdrawals you can withdraw up to 9000$ a day.

Level 2 requires you to provide your full legal name, date of birth, proof of address, the source of your assets, passport or other government ID, and a picture of yourself holding your ID with the date and a piece of paper with ‘FTX’ written on it. Once completed you are allowed unlimited crypto withdrawals.

Finally, to complete level 3 you need to finish all previous levels and to now provide a recent proof of address and, to provide a recent bank statement. Once this is done you gain the ability to wire money to FTX and buy crypto directly on their FIAT markets.

Completing the steps is relatively easy once you have the documents for level 2 and 3 at hand. Simply navigate to the KYC page in your settings tab. Once your application is submitted FTX staff typically review your application within 24 hours.

Regulation

FTX.com does not currently accept users residing in the US. However the newly launched FTX.US does.

FTX is registered under FTX Trading LTD which is incorporated in Antigua and Barbuda. The registering of FTX here may raise some red flags to some but this practice is common in the cryptocurrency industry and some might say is necessary in order for an exchange to succeed. Strict regulatory guidelines in larger jurisdictions such as the US and EU make it almost impossible for exchanges to operate well and so a large percentage of companies register where financial regulation is more relaxed.

However there may still be some regulatory uncertainty’s with the platform. Earlier this year FTX launched a market which US regulatory boards may not approve of. The market in question is FTX’s crude oil futures market.

Back in 2018 the CTFC which regulates commodity trading in the US sued a cryptocurrency CFD platform which enabled users to trade oil and gold with Bitcoin. The domain was also seized by the FBI.

FTX has strict warnings that prohibit users trading oil if they are from a prohibited country. So I doubt the same faith awaits them as 1Broker but it is worth keeping in mind.

Trading Fees

Trading fees on FTX are tiered based on on how much you trade. The more you trade the less your trading fees will be. For example if you trade less than $1 million in 30 days your taker fee will be 0.07% while if you trade more than $1 million your taker fee will be 0.06%

See the table below for the full fee list. Maker fees represent what an order would cost if you used limit orders to fill your order. While the taker fee represents the fee if you used a market order.

FTX also has their own exchange token known as FTT. Holders of this token also get fee reductions based on how much tokens they hold. See the table below for the full benefit of holding these tokens.

FTX has a number of atypical trading products such as their leveraged tokens. We will address these products later in our review. These leveraged tokens have a creation and redemption fee of 0.10% and a daily management fee of 0.03%.

Using leverage of over 50x increases trading fees by 0.02%. Using leverage over 100x increases trading fees by 0.03%. These additional fees are paid to the insurance fund rather than FTX. Adding directly to the insurance fund is done to prevent socialized losses like what happened with margin trading on OKex in 2018.

Withdrawal Fees

Another factor to consider when using a platform is deposit and withdrawal fees. On FTX there are no fees for depositing or withdrawing money. If you decide to withdraw Bitcoin you will only have to pay network fees.

FTX Fees in Comparison to the Competition

Due to the tiered nature of FTX’s fee structure it is harder to make a direct comparison to another exchange which has a flat fee. But if we assume the lowest fee tier of less than 1m$ in trading volume FTX fees are by and large more expensive than those of their main competitor, BitMEX. However, If you trade more than $1 million in thirty days your fees will be lower than the example provided here.

BitMEX has a flat fee regardless of trading volume of -0.025% for maker and 0.075% for taker. The negative maker fee means you will receive a rebate for adding liquidity. This is considerably better than FTX’s 0.02% fee. The taker fee on FTX however is lower by 0.005%.

The justification FTX makes for its higher fees is that if you widen the spread between maker and taker fees you will inevitably widen the spread between the bid and ask in the order book. They state that market makers will shift their positions to compensate for the spread in maker-taker. In summary you will either pay the fee in the spread on the exchange or in the fee charged.

FTX does want to incentivize people to provide liquidity–doing so means taking the risk that prices will move against your order.  But we want to make sure that we don’t make markets artificially wide, which is why our maker – taker spread is significantly lower than many of our competitors.

FTX

Similarly both BitMEX and FTX charge no fees for withdrawals or deposits.

Markets and Standout Features

Trading Pairs

FTX has the widest variety of trading pairs perhaps out of any derivatives exchange in crypto. Currently having over 50 trading pairs. Each of these trading pairs typically has both a perpetual swap contract, variety of futures contracts and a spot market where you can trade directly in US dollars.

In comparison to BitMEX which only has 8 trading pairs FTX is streets ahead.

Leveraged Tokens

Not only does FTX have a wide variety of pairs it also has unique products which are not available anywhere else. One of these products are leveraged tokens.

These leveraged tokens give exposure to certain cryptocurrencies with leverage of up to 3x to the upside or downside.

FTX gives three potential reasons as to why using leveraged tokens might be better than simply using leverage to buy or sell an asset:

The first reason is that leverage tokens make it easier to manage risk. Leveraged tokens give traders the opportunity to use leverage without paying too much attention to managing leveraged positions. This is because the leveraged tokens manage leverage themselves without the need for trader input. FTX gives the example below.

BULL/BEAR/HEDGE tokens will automatically reinvest profits into the underlying asset; so if your leveraged token position makes money, the tokens will automatically put on 3x leveraged positions with that.

Conversely, BULL/BEAR/HEDGE tokens will automatically reduce risk if they lose money. If you put on a 3x long ETH position and over the course of a month ETH falls 33%, your position will be liquidated and you will have nothing left. But if you instead buy ETHBULL, the leveraged token will automatically sell off some of its ETH as markets go down–likely avoiding liquidation so that it still has assets left even after a 33% down move.

FTX

The second reason is managing margin. Leveraged tokens will manage their own margin. You can simply buy $10000 of BTCBULL which gives you exposure to 30000$ of Bitcoin. If price sharply declines 33% chances are you might be liquidated, but your maximum loss can not exceed 10000$ and you did not have to worry about your liquidation price or collateral.

Leveraged tokens have gone to zero before where the automated system which maintains them could not catch up with an extremely sharp decline in price. But this is rare as the automated system typically can begin to sell off exposure before liquidation.

The final reason given by FTX as to why using leveraged tokens is beneficial is that they are ERC-20 tokens based off the Ethereum blockchain. This makes them transferable too. So you can keep them off the exchange in an Ethereum Wallet for example. It brings up an interesting use case where you could keep 30000$ of a Bitcoin long in an Ethereum wallet.

There are leveraged tokens for every market on FTX.

Indices

Alongside all the variety of tradeable markets on the exchange there are a number of cryptocurrency indexes curated by FTX themselves.

Some examples of these indexes are their EXCH-PERP, PRIV-PERP, and ALT-PERP. The EXCH-PERP is an index of exchange tokens such as Binances BNB, Huobi Token, and Bitfinexes LEO token and others. The PRIV-PERP is a basket of 9 different privacy coins like Monero, Komodo, and Zcoin. While their ALT-PERP is an index of a number of high ranking altcoins.

These index products are incredibly convenient for traders and investors who are bullish on certain sub sections of the cryptocurrency market to gain exposure. For example if I am an investor who is bullish on privacy coins I can gain exposure to all of them in one market rather than have to buy and manage them all separately.

Options

The demand for more complex derivatives in crypto has increased over the past few years and FTX is helping to fill that demand with its options markets.

Users can request quotes directly through the options market tab. Here users can request quotes for calls and puts or make bids on other users requests for calls and puts. There is also a convenient graph on how profit and loss for a chosen option will work.

Alternatively users can trade FTX’s volatility markets. There are currently 3 main types of volatility contracts. MOVE contracts, BVOL, and IBVOL.

Move markets for those familliar with options trading are essentially call straddles. This is a type of options trade where you buy a put option (betting price will fall) and buy a call option (betting price will go up). The result is that traders will profit from a volatile move in price as long as the move is sharp.

Move contracts work somewhat similarly where they will expire to the absolute value of the change in the price of BTC over a specific time period. That time period varies based on what move contract you choose. There are move contracts for the day, the next day, the week, and all the way up to a few months away.

There are also BVOL and IBVOL. Both are erc-20 tokens similar to leveraged tokens however they either track 1 times the the implied volatility of Bitcoin (BVOL). Or, -1 times the implied volatility of Bitcoin (IBVOL). Implied volatility is a metric which tracks the markets view of a change in an assets price.

Exotic Crypto and Non-Crypto Markets

If the previous trading markets were not enough FTX has also began to list markets which you might have not even considered. One of these is its new hashrate futures market.

Just launched before the recent halving, hashrate futures allow traders to long or short what they believe Bitcoins hashrate will be at a specific date. There are a variety of futures expiring from 6 months away to 18 months.

The futures contracts expire to the average difficulty value of blocks mined divided by 1 billion.

These contracts can be useful for pure speculation. Or miners can use them to hedge. The market is in its infancy so it will be interesting to see how traders use them to their advantage.

FTX has also began to dabble in non-crypto markets. One of these non-crypto markets we have mentioned earlier and its FTX’s crude oil market. Previously we have discussed it in regard to its potential regulatory risk. However if you are in a jurisdiction in which trading crude oil on FTX is allowed it may be worth dabbling it.

Gold also has a market on FTX through its Tether gold perpetuals. Tether Gold (XAUT) is similar to USDT in that it is simply a token which is backed by a real world asset. In USDT’s case a dollar, in XAUT’s case an ounce of gold.

Traders can trade the price of gold through XAUT the same as they would on a traditional financial exchange. It being a token backed by gold also means that it is free of the regulation that FTX’s oil market is shrouded in. If you’re allowed sign up to FTX you can trade XAUT.

FTX has also began experimenting with prediction markets, launching for the 2020 American Presidential Campaign. Here traders can bet on who they believe will be elected.

Each presidential candidate has a market which varies between 0$ and 1$. If the candidate wins the contract expires at 1$ while if they lose it expires at 0$. The variance between 0$ and 1$ in valuation represents what traders feel the probability of a certain candidate being elected is.

If you’re informed on US politics you can imagine how the valuation of some candidates has gone.

Trading Competitions

FTX has also set its self aside from its competition by doing regular large scale trading competitions. These competitions often have large prize pools making them incredibly competitive.

As an example the current competition titled ‘Man vs Machine’ puts regular traders against quantitative traders to decide who is best. Regular traders must trade through the platform while quantitative traders must trade through the API or Quant Zone.

There are individual prizes top traders on both teams as well as team prizes for the winners.

Quant Zone

For those with an interest in programming or quantitative trading you may want to look into Quant Zone. FTX’s attempt at trying to make quantitative trading easier.

Quant Zone allows you to create trading algorithms directly on the platform, without the need for API’s. Within the Quant Zone interface users can create trading rules and actions. These trading rules and actions can then make up your very own quantitative trading strategy.

Your trading strategy can be as simple as shorting Bitcoin when it is over 10000$ or you can create something much more refined and sharp.

This is what is available now but in future iterations FTX plans to launch a number of new features. One said feature is the ability to create your own trading program and then share it with other users. When these traders then use your program you will earn a portion of their fees.

Mobile Apps

FTX has both an app for Apple and Android devices so users can monitor and manage trades on the go.

The app is not the most intuitive mobile experience but it does what it needs to do.

Liquidity

Liquidity is perhaps the most important force behind whether an exchange will be successful or not. Having no liquidity creates a sort of exchange death spiral. If you have no liquidity you will not attract users to sign up, and if you have no users you won’t attract liquidity. You can have the best trading platform in the world, but if you have no liquidity its nothing but a tech demo.

FTX however never fell into the liquidity death spiral that many other smaller exchanges fall into. From the get go FTX had the advantage of coming from Alameda Research, one of the largest liquidity contributors in the cryptocurrency industry. On day 1 the exchange had great liquidity.

Not only were Alameda providing liquidity but so too were other liquidity providers. FTX went out of their way to recruit other liquidity providers and trading firms in the crypto space.

Liquidity on FTX still remains very strong. On larger pairs such as Bitcoin and Ethereum you will typically have no problems with getting orders filled. Volume on FTX is typically lower than other large exchanges such as BitMEX and Binance but this is unlikely to negatively affect you unless you trade very large sizes.

As you go from Bitcoin and Ethereum down to the smaller altcoins volume begins to decline but this is the case with every exchange. However, again if you plan on trading altcoins with large size you may want to keep it in mind.

Ease of Use

Trading Experience

The trading experience on FTX is much like that of any other derivatives exchange. If you have used other platforms like BitMEX you will be right at home.

Even if FTX is your first experience with cryptocurrency trading it is all largely intuitive.

You can search through the markets in the markets tab and select the one you want to trade or alternatively you can use the search bar.

Once you have found the market you want to trade you can place orders using the orders box. Here you can select what price you want to buy or sell the asset at, what order type you want to use, and how much of the asset you want to buy or sell.

Once you have placed an order it will appear in your open orders tab at the bottom. It will give you the details of the order you just placed as well as how much of your order has been filled.

Once your order has been filled in your positions tab it will show you details like profit and loss, estimated liquidation price, and the notional size of your order.

One thing to keep in mind which might be different from previous trading platforms is that FTX only supports cross leverage. Cross leverage is contrasted against isolated leverage. Isolated leverage is what most people are use to and is the easier to understand. With isolated leverage if you get liquidated on a trade you will only lose the amount you put into that trade. So if you bought 10000$ worth of Bitcoin with 10x leverage you have put up 1000$ in margin. If Bitcoin falls 10% your position will be automatically liquidated and you will lose your 1000$.

However with cross leverage the assets of your whole account are used as margin. This typically means that you are less likely to get liquidated but when you do get liquidated assets in your wallet will be liquidated as well.

If you want to use isolated leverage on FTX there is a work around by creating a sub-account. Simply create a sub-account then transfer the maximum you want to risk into the sub-account from your main account. If you get liquidated in this case only your sub-account’s assets will be liquidated and the assets in your main account will remain untouched.

User Interface

Perhaps my largest albeit a relatively minor issue with FTX is its UX. From the home page there is drop down menus, hover menus, all directing you to an infinitude of different things. If I weren’t involved in crypto I wouldn’t even think based on the home page that it was a trading site.

If we compare it to BitMEX when you first login you’re immediately presented with a trading terminal, you can see price charts, trades taking place, markets, your orders and your positions. You immediately know you are in an environment where something to do with trading is taking place.

While when you first login to FTX you’re at minimum 2 clicks away from even getting a glimpse of a trading interface.

User interface is not the greatest concern when signing up for an exchange. FTX is still excellent once you get used to it. However, if FTX worked on crafting a good UI and UX it would make a great exchange even better.

Conclusion

Now that we have assessed FTX on all of our criteria we can finally give out conclusion and final score.

FTX although only starting to make its first trades just over a year ago has made massive leap forwards. In terms of the sheer number of features and markets on offer it is leagues ahead of the competition. No other derivatives exchange offers options trading, leveraged tokens, Quant Zone, prediction markets, a vast array of indices, spot markets, and trading competitions all in one package.

There are slight issues with regulation. Having an oil futures market puts them on the radar of regulators when they don’t necessarily need to be.

In terms of KYC and AML leniency FTX is not the best but it is not the worst either. On the plus side you can begin trading without having to submit any form of documentation. Once you confirm your name and country of residence you can withdraw 2000$ a day which is good. However, in comparison Bitmex, the largest exchange has no withdrawal limits with no identity verification.

KYC on FTX may be due to its spot FIAT markets which allow you to wire money to the exchange, but for some that benefit may not outweigh the drawbacks.

The user interface is also an issue we brought up however this is not exchange breaking issue and is something that FTX can fix in future iterations.

To conclude, we posed two questions at the start of our review. Is FTX the best up and coming exchange? And is it worth signing up for? To answer simply the answer to both questions is yes.

This review contains affiliate links. By using them you will receive a 5% discount on your fees. You will also help support our website. Although we receive commission through our affiliate links we remain as objective and honest as possible when reviewing. FTX did not contact or send us money to conduct this review.

Kraken founded in 2011 has today announced via email and blog post that it will be launching foreign exchange trading on its platform.

At launch 9 currency pairs will be available to trade. EUR/CAD, USD/CAD, EUR/CHF, USD/CHF, EURJPY, USDJPY, EUR/USD, and GBP/USD. With the company stating that they are open to adding more pairs in the future.

The markets will launch on the 12th of March at 14:30 UTC Time. In the blog post Kraken highlights as a selling point that the minimum trade size is 10 units. Stating that this is “Substantially lower than many leading FX Shops.”

Kraken says that the introduction of these markets within the platform will allow “clients to be more agile and sophisticated when trading across our markets”.

Below is the fee schedule that will apply to trading FX pairs

Traders will not be allowed to margin trade these new FX pairs like they typically are on other cryptocurrency based markets. Customers based in the US are also excluded from using these markets.

This continues the trend within the cryptocurrency industry of further integrating with what one might

One of the major players to emerge from the cryptocurrency industry last year was FTX. Launching in mid 2019 on the back of an incredibly successful quantitative trading firm Alameda Research they took the exchange industry by storm becoming one of the top 5 exchanges by volume in a matter of weeks.

One of major keys to success that allowed FTX to become so prominent so quickly was its heavy focus on innovation. Having new and unique trading products such as altcoin indices or leveraged tokens brought droves of traders to the platform. And this innovation looks like its going to continue with the launch of options contracts.

Options contracts are a somewhat complicated financial product and their complexity goes well beyond the scope of this article. In the most simplest of forms they allow someone to buy or sell a specific asset at a certain price within a certain time frame. Buying an options contract when you expect it to go up is a ‘Call’. This is opposed to a ‘Put’ which is a contract to sell an asset at a specific price. You can get a better understanding of options here.

Options trading is not new, already doing billions of dollars in volume on traditional financial markets. However their growth in cryptocurrency markets is. They were first popularly launched by Deribit in 2018. But remained relatively difficult for large players to use fully due to liquidity issues. However the final quarter of 2019 brought a lot more interest.

With this growth of interest more exchanges are launching options trading. OKex recently launched options on their platform. The giant that is CME Group also just launched options trading contracts based on futures. We wouldn’t be surprised to see other giants like BitMEX dip their toes in soon.

FTX Options Trading in its first day alone did 1700BTC in volume.

Options contracts aren’t particularly exciting in themselves. What is interesting though is what they represent. They represent the somewhat continued exponential growth of sophistication in cryptocurrency markets. Whether this increased sophistication is a good thing or a bad thing is for you to decide..

Crypto derivatives have seen exponential growth over the past two years. BitMEX still leads the charge. However many newly founded exchanges such as FTX and now BTSE Exchange are hot on their heels attempting to absorb market share. Each exchange has its own value proposition, it’s own selling point. So what is BTSE’s selling point? Let’s find out.

BTSE was founded back in 2018 with its markets officially launching this year. It is under regulations of the Central Bank of United Arab Emirates. The team hails from a strong combination of traditional financial and software backgrounds. Coming from giants like Goldman Sachs, IBM and Cisco.

Our ethos is to tailor BTSE towards fulfilling the needs of professional traders and institutional investors by providing usability and reliability on a platform with high liquidity and fast settlement, all in a trusted environment.

Futures 2.0

BTSE’s standout feature is what they like to describe as “Futures 2.0”. On traditional crypto derivative exchanges all trading is done through Bitcoin. Whether that be posting margin or settlement (closing positions). Futures 2.0 allows users to post margin and settle their trades in either a selection of cryptocurrencies or traditional FIAT currencies. Users can post margin with multiple currencies and coins simultaneously. With the ability to easily add and remove multiple collateralized assets on the fly.

Spot Markets

Another item unique to BTSE is that they offer traditional spot markets. Users can deposit dollars from their bank account and buy Bitcoin or sell their Bitcoin for dollars. With previous derivatives exchanges this was not possible. It was Bitcoin exclusively. BTSE is also loyal to the cyberpunk philosophy surrounding cryptocurrency even though they offer FIAT deposits and withdrawals KYC is completely optional as long as you stick to cryptocurrency settlement and margin.

Liquidity

Liquidity is what makes or breaks an exchange. A new exchanges primary motive should be generating liquidity. An exchange which can not generate liquidity will not attract users to trade there. BTSE tackles this problem in a number of ways. The most exciting of which being its shared liquidity pool. BTSE’s all-in-one order book allows all users to share the same liquidity pool via ONE order book, regardless of currencies. BTSE has also tried to on board new users with promotions such as fee rebates and deposit bonuses. At the time of writing on a non volatile Sunday market BTSE has reported 37 million dollars in transaction volume on its Bitcoin pairs. Which is very good for a brand new exchange. However, they will need to keep the ball rolling in order to keep up with the competition.

Security and Network

BTSE employs industry standard security techniques such as 2FA and cold wallet storage. From a networking standpoint their exchange is secure as well. BTSE hosts their own servers so there is no reliance on company’s like Google or Amazon to provide hosting. Which has caused problems for exchanges in the past. For example, when Amazon Web Services went down temporarily an exchange called BitMAX had huge problems when a number of their coins lost 99% of their value due to data errors. Many exchanges also have to go through temporary outages in order to update and upgrade their systems. BTSE uses something known as ‘horizontal scaling’ which prevents this.

BTSE has the “typical” 100x leverage. With 5 main trading pairs Bitcoin, Ethereum, Litecoin, Ripple and Tether. All 5 having a futures and USD pairing.

Conclusion

In summary, BTSE Exchange is not revolutionizing cryptocurrency trading. However they are an improvement on whats already there. Whether these improvements can it lead to becoming one of the top exchanges is not for me to decide. But if their dedicated team can keep improving I do not see why not.

About

qTrade was founded back in April of 2018. Based out of the United States of America. Though the exchange was only founded in 2018, the team has been involved in the cryptocurrency industry for a number of years. In 2014 they created a profit switching mining pool, later expanding their technology to carry out currency arbitration and conversion for miners. Their teams base in the grassroots stage of crypto shows in qTrades overarching ideology. Their manifesto is very simple: To accelerate the adoption of blockchain technology around the world by reducing the barriers faced by innovative, new, and emerging technology. But can it live up to its promises? This is our qTrade.io Review.

What Differentiates qTrade From The Competition?

qTrade prides themselves on their support of new and emerging projects. qTrade wants to encourage the development of projects built from the ground up by. They do this by creating some of the cheapest listing fees in crypto. Binance, the largest altcoin exchange was quoted giving out a listing fee figure of 400BTC. This parasitic fee is obviously way out of the reach of smaller projects where every penny needs to be put into development. Without qTrade, coins like NYZO which we have previously overwhelmingly positively reviewed may never gain traction, even if there technology is world class. Instead being replaced by projects with deep pockets and large corporate financial backing, and as we have seen in the past with crypto, these deep pockets do not necessarily translate into quality projects.

The fee for listing on qTrade can vary from from zero to 2BTC this is obviously a lot more competitive than their larger exchange counterparts. This gives smaller projects room to breath. The listing fee is based off a number of basic and preferred criteria. The full list can be found here. But, to summarize. qTrade rewards projects which are original, have new technology, dedicated development teams, and active communities. By having more of these attributes the listing fee goes down. qTrade also frowns upon projects which have large premines or ICOs and takes these factors into account when deciding the listing fee. They also put an element of control into the users hands by allowing them to vote on which coins they want listed. The vote does not guarantee listing but rather shows the team at qTrade which coins people want listed.

Security

One of the fundamental questions one must answer when it comes to an exchange is its security. qTrade employs rigorous security techniques and technology. They build their own transactions to allow for easy off-site signing, ensure idempotency, and leverage cold wallet storage for additional safety. On the user side qTrade has the industry standard support for two factor authentication allowing users to add additional security to their account.

Fees

qTrades fee schedule is interesting for a smaller exchange. They offer a maker fee (adding liquidity to the orders) of 0% and a taker fee (taking away liquidity from the orders) of anywhere between 0.5% and 1.5% depending on the asset. A maker fee of 0% essentially means that you can trade for free if you use limit orders. While the high taker fee penalizes people who use market orders and take liquidity from the orderbook. This is overall a good strategy on behalf of qTrade to generate consistent liquidity. One of the problems facing all smaller exchanges. I would suspect qTrade will begin to move their fees towards a more common structure such as the flat 0.1% Binance employs as the exchange grows in size and liquidity.

qTrades withdraw fees are competitive when compared to their much larger competitors even while lacking the economies of scale.

Regulation

qTrade is based out of the U.S which has perhaps the most stringent regulatory framework when it comes to crypto. However, there still remains a large grey area within the U.S jurisdiction. qTrade has gone on record and stated that they are committed to complying with all current and future regulatory law. They have demonstrated their willingness to comply by refusing to list coins which could be deemed as securities under the Howey Test. However, I do feel that being subject to U.S regulation is something that will hold qTrade back. We have seen the flight of volume away from American altcoin exchanges like Poloniex and Bittrex, towards exchanges like Binance and Huobi who are regulated in much more lazes-faire jurisdictions.

Conclusion

I am optimistic about the future of qTrade and I truly wish for their future success. They are shying away from the predatory corporatism which is rife in the cryptocurrency industry in favor of a more grassroots approach. Something cryptocurrency was founded on. There are a number of issues with qTrade but they are all things that can be overcome, and if they continue on the path they are I have no doubt that they will.