As the cryptocurrency market becomes one of the most coveted new instruments of the financial world, new trading platforms are popping up like mushrooms. FTX Cryptocurrency Derivatives Exchange is a new player on the market of cryptocurrency margin platforms, with some new features to offer. Through this detailed review, we will analyze the pros & cons, strengths, weaknesses, fees, security and usability of this trading platform.
|Available contracts||Futures and leveraged tokens|
|Trading Fees||0.02% maker, 0.07% taker|
|Available coins||15 perp. swaps, 45 leveraged tokens|
|KYC/AML||Required to withdraw $1,000+|
|Excluded countries||USA, Crimea, Cuba|
|Customer Support||Email and Telegram. Good Help Center.|
What is FTX?
FTX is a cryptocurrency derivates platform, made by traders, for traders. A high leverage token and index offer separate FTX from its competition and make this platform recognizable in the financial market.
FTX was established in May 2019. and is owned by FTX Trading LTD, a company incorporated in Antigua and Barbuda and operated by Alameda Research. However, FTX operations are based in Hong Kong.
Being operated by a high profile financial player gives FTX a certain level of reputation, but FTX still has a relatively small daily trading volume of $50 million, and is still far away from their direct competition, like BitMEX and Deribit. However, this is just a current state, and FTX is on an expansion route and in the future plans to be at least at the same level as them, if not bigger. thanks to the variety of options it offer
The main advantage of FTX is the fact it offers perpetual swaps for 15 assets, while BitMEX and Deribit offer only two. FTX also has a significant offer of tradeable indexes like altcoin index, and leveraged offers for almost 50 assets.
FTX trading experience
The homepage of FTX.com looks like small chaos of piled options, and it will take some time for new users to get used to it. However, more active traders prefer this type of interface, as it is quick and has an excellent overview of all trading options.
The adjusting of the leverage is simplified by using a field for entering a margin input, and the required leverage is automatically calculated. That’s a handy solution, which Deribit also uses in their interface. FTX has an option of 14 languages to choose from, as well as a day/night option of the page settings, which will be helpful to night-owl traders.
FTX KYC and Verification
FTX has a rule of verifying your identity in case you want to withdraw more than $1000, and that’s a practice that BitMEX and Deribit don’t have. This is a minus in the eyes of those who prioritize their anonymity while it can be a huge plus for traders who put regulatory transparency above their anonymity.
You will need to fill out a standard form to verify your identity, including your source of the funds, proof of residence, and a scan of your ID documents, like a passport or a driving license. Verifying these documents takes usually less than 12 hours and after that, you may proceed to deposit funds on your personal account, without any further restrictions.
FTX contracts and coins offered
FTX trading platform has one of the widest variety of trading options on the cryptocurrency market. Their trading options consist of:
- bitcoin options,
- MOVE contracts
- spot trading
- leveraged tokens
- OTC trading
The “futures” menu offers a plethora of perpetual swaps. The standard offering of popular coins (BTC, BCC, ETH, BNB…) is enriched by adding rather rare and unusual products, for instance, the “Shitcoin index (SHIT)”, or a US president 2020 option.
The default leverage of 10x is set on all accounts, but you can adjust it manually and slide it up to 101x leverage. Although tempting, this option is not recommended for beginners, as it basically equates gambling.
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FTX was one of the first cryptocurrency exchanges to offer Bitcoin options. Unlike Deribit, FTX doesn’t have an option order book. FTX uses a design solution, where the user chooses the exact option to trade, call/put, the strike price, the expiration date, the quantity, and whether he is buying or selling. After choosing all the options, the user requests a quote, and after 10 seconds, the offer for his design will appear, and he can accept or decline it.
With this solution, FTX can offer highly customizable options to fit every user’s preferences.
MOVE contracts are somewhat similar to futures; except instead of expiring to the price of a token, they expire to the amount its price moved. They basically represent the absolute value of the amount an asset moves in the set time interval. There are three types of MOVE contracts: daily, weekly, and quarterly. The MOVE contract value is determined by the absolute value of the BTC value moves, up or down.
Spot trades are market matched orders for a specific asset. The most active spot trading pairs are BTC/USDT and BTC/USD, while less popular BTMX and PAXG are on the tail position.
The “leveraged tokens” tab also offers you a wide variety of trade options, with popular options like BTC/USD and ETH/USD making a few million in daily volume. Less popular options like Cardano (ADA), BiLira (TRYb), or BitMax (BTMX) have a low to none trading volume. Leveraged tokens come in different options you can toggle on the menu, and we will use Etherum (ETH) for an example.
- ETHBEAR – 3x Short Ethereum Token
- ETHBULL – 3x Long Ethereum Token
- ETHHALF – 0.5x Long Ethereum Token
- ETHHEDGE – 1x Short Ethereum Token
The over-the-counter option takes place on the FTX portal, and you can get instant OTC quotes for most of the major coins there. You use the same account as for the FTX futures, KYC approved, and you can start using their services. FTX OTC supports transferring the funds from the FTX wallet to the FTX OTC wallet, and vice versa.
This is a new trading option on the FTX exchange where you can trade OIL100-0525 contract that expire to the spot price of WTI oil. In particular, a contract expiring on day X will expire to the published Cushing, OK WTI Spot Price FOB here for day X, plus 100.
FTX adds $100 to each contract in case the spot price goes negative.
FTX trading fees
FTX has no deposit or withdrawal fees, as well as no fees on futures settlement, OTC trading, or conversions in your wallet. Other types of fees are based on the users 30-day volume of trade
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If you want to reduce the fees, consider purchasing the FTT coin, the exchange token of the FTX platform. The platform puts a lot of faith in the FTT coin and plans to make it a backbone of its ecosystem. You can check the discount available for the current FTT holders on this table.
The platform takes low creation and redemption fees of 0.10%, and daily management fees of 0.03% for leveraged tokens. By using the leverage of 50x, trading fees increase by 0.02%, and leverage of 100x or higher increases the trading fees by 0.03%. The fees gap is paid to the insurance fund. The amount of the fees for MOVE contracts depends on the price of the underlying index, not the price of the MOVE contract.
FTX maker-taker fees are among the lowest in the trading industry, in the same range as Bybit or Phemex.
Purchasing the FTT token will lower these fees even more, and give you certain privileges. You can also access their VIP program for high volume traders, and almost zero the fees.
FTX Token (FTT) is the native token of the FTX ecosystem. It is the core of FTx’s incentive scheme that aims to increase network effects and demand for FTT, and to decrease its circulating supply.
This is another great feature on the FTX exchange that alows you to create custom automated trading strategies using your own insights and indicators. You can also make a product out of your strategy and earn fees when other traders use it.
Is FTX trustworthy and legit?
Although one of the newest cryptocurrency exchanges on the market, the FTX has managed to build a reputation of a safe and trustworthy place to trade. The platform supports the two-factor authentification, but sadly, no IP addresses whitelisting, and that’s a downside. However, three major factors assure the stability and trustworthiness of the FTX platform.
The biggest credit for the FTX’s high level of trust goes to the fact the platform is operated by Alameda Research. The Alameda Research is an absolute authority trading firm that manages over $100 million in its digital assets and has a daily trade between $600 million and $1,5 billion.
The FTX team
- Sam Bankman-Fried: CEO and Founder
- Gary Wang: CTO and Founder
- Dan Friedberg: General Counsel
- Jen Chan: CFO
- Constance Wang: COO
- Darren Wong: CMO
- Michael Burgess: Head of Partnerships
The FTX team is composed of young and talented highly educated experts. Graduates from prestigious universities like MIT and Berkley, with large business names like Google, Facebook, Deutsche Bank, PayPal, and Credit Suisse listed in their CV’s, this team looks like it can handle any market challenge. Also, they have a high level of social conscience. In the last year, the FTX platform, its affiliates, and its employees have donated over $10 million to the charities and people in need.
List of partnerships
The FTX platform is a partner or has collaborated with many respectable names in the cryptocurrency industry like Alameda Research, BUSD, Fenwick and West, CoinGecko, and many more. Partnership with this level of companies is a sign of high business quality and reassures the users that the FTX platform can be trusted.
FTX customer support
The platform has an excellent help center, with numerous FAQ articles and regularly updated blog posts. This level of dedication to the user’s needs is extremely rare in the crypto world, and something they should be proud of. Also, their Telegram community (11 languages supported) and direct support communication via email is quick and helpful. The average support response is usually less than a few hours. Just remember, they are situated in Hong Kong, so the working hours are different, and that is important if you are from Europe.
Does FTS support USA users?
FTX does not alow US customers to use their platform because of the strict financial laws in place in the USA. This is true with most cryptocurrency derivatives exchanges. USA traders should look into unregulated platforms like BitMEx, ByBit, PrimeXBT or PrimeBit if they want to play with leveraged and margin trading. Even better solution for the USA traders is to go to eToro, a regulated and well established financial broker that offers leveraged trading on cryptocurrencies.
How to start trading on the FTX
As we said, the interface acts as a bit confusing to the new users, but the registration part is as easy as it can be. Follow these steps and make your first trade in no time.
You just need to fill the forms for your username and password.
We emphasize that you should choose a unique and strong password, as well as for your other online activities. After signing up, the link will redirect you to the FTX.com homepage. For more serious users, that plan to withdraw more than $1000, a KYC verification is required.
FTX offers a variety of deposit options:
- stablecoins (TUSD, PAX, and USDC)
- Bitcoin, Bitcoin Cash, Ether, Litecoin, Tether, and all of its leveraged tokens.
- fiat currencies – USD, EUR, AUD, GBP, HKD, SGD, CAD, ZAR etc.
You can send your fiat currencies via bank wires or credit cards.
This variety of choices also separates FTX from BitMEX and Deribit, as they only offer deposits in Bitcoin and Ether. To make your first deposit, click the “wallet” section, and choose your preferred currency. Click “deposit” and a pop-up window will appear, with the required address. Depending on your currency choice, sometimes it takes up to 30 minutes for a change of balance to take place.
Choose your favorite option to trade. The options are almost endless, and the platform keeps adding new features to satisfy all the users’ needs. One of the newest and quite interesting options is the crude oil future contracts.
List of prohibited countries
- The United States of America,
- Crimea and Sevastopol
- North Korea
- Antigua and Barbuda.
The FTX platform has won us with innovative market solutions, as well as with a variety of trading options. There are few minor flaws to be fixed, but overall, FTX is a safe place for new and seasoned cryptocurrency traders to display their trading skills and earn money. Its surprising liquidity and constant growth make FTX one of the pretenders for the top positions on the market.
What are Bitcoin BEAR / BULL tokens
BULL and BEAR tokens are specially designed leveraged tokens that have 3X the normal exposure to the underlying asset (Bitcoin). In essence, this works so that a 1% increase in the price of Bitcoin will give a 3% increase in the Bitcoin BULL token. These tokens allow traders to increase their exposure to an asset without the need to take loans. BEAR tokens are the opposite, they would increase in value when Bitcoin decreases in value.
What are ETHBULL and ETHBEAR tokens
ETHBULL and ETHBEAR tokens are leveraged tokens that have 3X the normal exposure to the underlying asset (Ethereum). This works the same way as the bitcoin leveraged tokens and a 1% increase in the price of Ethereum will give a 3% increase in the ETHBULL token. These tokens allow traders to increase their exposure to an asset without the need to take loans. ETHBEAR tokens are the opposite, they would increase in value when Ethereum decreases in value.
- small fees
- large choice of trading options
- innovative market approach
- trustworthy level of security
- mobile app for both Android and iOS
- no reported scams or hacks
- UI is not user-friendly for new clients
- USA citizens not allowed
- no IP whitelist option
CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com