Overview of bitFlyer Cryptocurrency exchange
After reading this bitFlyer review, you’ll be equipped with enough information on this cryptocurrency exchange to know whether this exchange is suitable for you or not.
bitFlyer is considered as one of the oldest cryptocurrency exchanges. Incorporated in Japan in 2014 and expanded it's operations in the USA and Europe in 2017. bitFlyer's is one of the most sought exchanges in Japan and since then they have acquired a significant market share in the country together with other crypto giants such as Liquid exchange and Huobi Global.
At the time of writing this article, bitFlyer is ranked as the 13th largest exchange on Coin market Cap with a traded volume of $383,681 in the last 24 hours.
Let's take a look at a number of key metrics to understand the size of bitFlyer.
They have approximately 4.46 million visitors a month, with the biggest chunk of visitors coming from Japan. This is followed by Slovakia and United states, which only make 2.59% and 1.2% of all their visitors.
This confirms our earlier statement - bitFlyer's main focus was Japan. Their marketing and customer acquisition targets were in relation to Japan, hence the reason that such a large exchange has never made a big hit in the US so far.
This will change in the coming weeks, as plans have been rolled out by bitFlyer to acquire a larger market share in other countries - mainly the USA.
It is important to note that bitFlyer conducts it's operations in a lawful manner as they are a fully regulated cryptocurrency exchange and has a number of licenses as follows:
- Payment Institution Licence from Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg Allows them to operate in Europe.
- BItFlyer was registered as a virtual currency exchange by the Japan Financial Services Agency.
- BitFlyer is licensed to operate in 42 states in the USA.
An overall score of 85% was given to bitFlyer after assessing all the key factors of a cryptocurrency exchange. As a leading exchange they have all the fundamentals in place.
bitFlyer achieved a very good score in 3 out of the 5 pillars making a robust cryptocurrency exchange and an average score in the other two pillars.
A lot of exchanges are hacked every year and this should be of concern for all crypto enthusiasts keeping their virtual assets online.
Liquid, another leading cryptocurrency exchange in Japan was robbed more than $90 million worth of cryptocurrency this week. This serves as a reminder that security should be of top priority to all enthusiasts.
All exchanges include Liquid state that they keep their funds in cold storage and have top notch security systems.
This is easier said than done.
We are not experts in this field and we don't know whether there are other loop holes that hackers can exploit.
All we know is that hacks still happen.
Keeping your cryptocurrency on any exchange carries a major risk, this is no different with bitFlyer.
However, we do understand that if you want to trade cryptocurrency on daily basis you'll have to keep a percentage of your cryptocurrency on the exchange, for you to be able to sell and re-buy as quick as possible.
Using exchanges such as bitFlyer, which so far had a bullet proof performance in terms of security gives you assurance that you are keeping your money in one of the safest places online.
Don't forget, bitFlyer has never been hacked during their 7 years of operations. It means that what they are doing, they are doing it right in terms of security.
bitFlyer is super user friendly
It is hard to find an exchange with a simpler layout than bitFlyer. Once you login you are prompted with the main dashboard which allows you to navigate through the platform without any complications.
It is a very common practice that cryptocurrency exchanges overload their users with a lot of information and complex products with the aim to engage their users. From experience this usually works the opposite - especially with beginners.
When beginners are overloaded with information they will end up quitting.
Usually beginner friendly exchanges come at a price and have higher than usual fees- this is not the case with bitFlyer as they managed to keep their rates very competitive.
bitFlyer’s trading fees are some of the lowest in the industry. As shown below, fees vary depending on the past 30 day traded volume, but still have low fees for small traded amounts.
Besides, bitFlyer fees vary according to your jurisdiction, meaning that bitFlyer Japan, bitFlyer USA, and bitFlyer Europe employ different fee structures.
bitFlyer Europe Fees
The European version of bitFlyer charges a fee for spot trading and withdrawing certain cryptocurrencies from their platform. There are also fees associated with making SEPA bank transfers when making EUR deposits and withdrawals.
The maximum amount of fee payable is 0.20% fee which is applicable to lightning spot.
bitFlyer USA Fees
The fee structure of the bitFlyer US exchange is relatively straightforward, similar to the one for Europe.
No fixed fees are charged if the exchange is used only to buy or sell cryptocurrency on the trade account or trade pro account.
The exchange makes money by charging for trading and exchanging cryptocurrencies on the Lightning Spot and also takes a fee for wire withdrawals (Fedwire).
The wire withdrawal fee is a little excessive and can be avoided by using ACH.
Average User Count worldwide
The more users a cryptocurrency exchange has, the more confidence and reputable the exchange is.
bitFlyer conveys confidence in Japan, in fact they are the second largest exchange in this jurisdiction, however this is still not the case in other parts of the world.
Although this is on the agenda of the exchange, we would like to see bitFlyer breaking the barriers in the US and Europe according to their plan.
This will show that the exchange has solid foundations across the whole company and not only in their focus market.
We would expect that an exchange of this size would have a good mix of cryptocurrency which their users can add to their portfolio.
At the moment bitFlyer only offers large market cap coins, so it leaves the user with little option to experiment with less known more risky coins.
One of the most common intermediate/advanced strategies used is to have a split between large market cap coins, medium market cap coins and low market cap coins.
This enables traders to diversify their risks across different virtual assets. Unfortunately, this is not currently possible with bitFlyer - this makes the exchange not suitable for advanced traders.
At the moment bitFlyer supports BItcoin, Ethereum, Ethereum Classic, Litecoi, Bitcoin Cash, MonaCoin and LISK.
A Step by Step Guide to buying Crypto on bitFlyer
Opening an account with bitFLyer
Creating an account with Bitflyer is very straightforward – usual process for opening any other account elsewhere. You have to provide your personal details and contact details including your e-mail and mobile number.
Once you open an account, you will immediately be given access to the basic type of account called ‘Trade account’. This account has a number of limitations and can be upgraded to ‘Trade Pro’ by providing proof of identification and residential proof.
The main differences between these two account classes are in relation to the amounts deposited and withdrawn. These are outlined in the table below.
For example. you can only do a maximum transaction of EUR 249.99 on the 'Trade account' whilst you have an unlimited maximum transaction value on the 'Trade pro account'.
bitFlyer rolled out an instant verification process called ‘Quick ID verification’, this allows new users to verify their account and start trading without limits in a few minutes.
This is a big plus to bitFlyer as the world of crypto is fast paced and doesn’t make sense for anyone to have to wait hours or days to buy the desired cryptocurrency.
In the bottom right corner, you can find the status of your account. Including details on
- Your account class. Between Trade or Trade Pro.
- Two factor authentication
- Personal Information
- Proof of identity
If you want to initiate verification process, you just must click on the ‘Not Submitted’ button and the process is initiated. Moreover, for safety reasons, we highly suggest that you enable two-factor authentication, this will protect your account from hacking or fraud.
Buying Cryptocurrency on bitFlyer
Buying cryptocurrency on Bitflyer involves two steps:
- Funding your account through 'Account Funding' Section.
- Use the funds deposited to buy cryptocurrency
Two options are currently offered to fund your bitFlyer account, either by doing a bank transfer or using Paypal. Visa and Mastercard top-up are currently disabled on the exchange.
Paypal is the easiest way to top-up your account. Paypal only works with a few reputable exchanges due to the risk that cryptocurrency entail and bitFlyer is fortunately one of them.
E-wallets such as Paypal are well known for convenience and if ease of use is your priority then Paypal should definitely be an option.
It is important to note that convenience comes at a prices and depending on your location the deposit fee for Paypal is a minimum of 4.9%.
In the 'Account funding' section, it is important to note the following:
- The fees for the payment method chose.
- Time it takes for the deposit to arrive on the exchange. They state that bank transfer may take up to 3 business days, however in most cases money arrives much quicker - especially when doing a SEPA transfer (EU).
The same 'Account funding' section is also used for withdrawals. For security reasons withdrawals can only be initiated to bank accounts having the same name as the registered user.
From the Buy/Sell section is where you can buy/sell your cryptocurrency. On the top you can see the options of crypto offered.
What is bitFlyer Lightning Exchange?
Lightning Network is a Bitcoin technology making part of bitFlyer exchange which enables near-instant, near-free transactions between participating nodes. It has been proposed as an upgrade to Bitcoin's current peer-to-peer technology for securely setting up a network of participants which are able to transact with each other directly.
This network of participants, or payment channel, established by the Lightning Network can be used to make low-value payments which would normally be expensive and time consuming on the blockchain.
A party will send a transaction to open the payment channel and deposit the necessary amount. Another party will do the same from another node, establishing a connection between them. Both parties can send payments across this connection without having to broadcast anything on the blockchain except for opening and closing down of channels.
The same login details of the main account are used for bitflyer lightning. Lightning Exchange on bitFlyer is a service that allows you to trade Bitcoin (BTC) using Lightning Network(LN)
You can only use lightning service with Bitcoin (BTC). The BTC you have in your account will be automatically loaded into the lightning wallet when you execute a trade, and withdrawn back to your main account after closing a position.
The process is similar to that which happens for bitcoins deposited at the time of opening a position, but in the case of lighting, bitcoin are withdrawn from one's account.
You can deposit BTC prior to opening a trade. When you open a trade, the deposited amount of BTC will be locked into an LN node for future payment transactions.
After your lock-in is confirmed, you will be able to trade with another person.
The BTC that was already deposited and locked into an LN node before the trade opens remains there after the trade has ended. Your existing lock-in can be used again when you open a new trade.
You have access to your entire BTC balance on bitFlyer Lightning Exchange.
You can withdraw part or all of the BTC balance to your main bitFlyer account whenever you wish.
The minimum lot size is 0.01BTC (0.1mBTC). Please check the current market conditions and use your best judgement before executing, it is safe to say that bitFlyer lightning exchange is not suitable for beginners.
What is the difference between Lightning exchange and main account on bitflyer?
As explained in the previous section lightning exchange is used for trading. This involves determining were the market is going to make an extra buck, whilst the main account is a service for holding your bitcoin.
Wth bitFlyer's main account you can deposit, withdraw and transfer money. For example, you can use it to send a remittance payment to another person or exchange cash for digital currencies.
Conclusion on bitFlyer
bitFlyer cryptocurrency exchange is an excellent trading option for traders and investors seeking to buy and sell virtual currencies in a secure, easy and regulated way. The exchange offers excellent service for new crypto and intermediate users, as crypto can be purchased in a few steps.
Besides, bitFlyer has some of the lowest fees in the industry, in fact as highlighted earlier in the fee structure section, buying and selling cryptocurrency is free unless you use the lightning Spot for trading. This makes it a handy alternative for everyone who is looking for a quick, reliable, and inexpensive fiat gateway.
Going back to our initial question - Why bitFLyer is not yet popular in the USA?
After looking at the US market, it is obvious that US Crypto enthusiasts prefer to use exchanges such as Coinbase and Kraken. These two cryptocurrency exchange are big players in the US market and are considered the blue chip exchanges by the general public. It comes natural to US citizens to open an account with Coinbase or Kraken if they want to purchase cryptocurrency.
Don't forget Coinbase made headlines several times especially due to the fact that they were the first exchange to be listed on the NASDAQ stock exchange this year.
55% of the visitors on Coinbase are from the USA, it is obvious that their marketing efforts are focused on the US market. For bitFlyer to manage to get a good market share in the US is not going to be an easy task. Changing the public's perspective tends to be one of the hardest tasks for company, however the reality is that the services offered by bitFlyer is comparable to the one by Coinbase, so we believe that with the right efforts this could happen anytime soon.