Your success as a crypto trader and investor will depend not just on your trading skills but on the platform you use and the opportunities it offers you.
This is why I make it a duty to introduce you to the best cryptocurrency exchanges out there.
As well as show you both their good and bad sides so that you can choose wisely based on your unique requirements and risk appetite.
In this post, I will be introducing you to FTX and everything there is to know about this top 3 cryptocurrency exchange.
But first, let’s take a quick look at its pros and cons.
FTX exchange review: Pros and Cons
Pros
- FTX offers multiple (up to 7 different) trading markets and investment opportunities.
- Highly liquid. FTX records large daily trading volume across both spot and derivatives markets. Its volume is second only to that of Binance.
- Hundreds of listed coins and thousands of trading pairs especially on is derivatives market. You will most likely find your favourite coin and trading pair(s) on FTX.
- FTX offers trading products suitable for both institutional, professional and first-time traders.
- Fiat on-ramp. You can deposit and withdraw with over 10 different national currencies (fiat) on FTX.
- Excellent support. FTX provides extensive support services via its website, email, and chats on over 5 different social media channels such as Telegram, WhatsApp, Twitter, Skype, etc.
- FTX charges zero withdrawal fees except for ETH, ERC-20 tokens, and BTC withdrawals of less than 0.01 BTC.
- Competitive trading fees, as low as up to 0.000% for makers and 0.040% for takers.
- FTX is backed by a highly experienced and competent team with deep pockets. They have everything required to make the exchange successful.
- FTX has 7 different order types to help manage your trades like a pro.
- Available on both mobile and web apps with robust API service.
Cons
- FTX has a relatively complex user interface.
- US traders have no access to the full range of FTX markets and products.
- KYC is required to buy crypto, deposit or withdraw with fiat, and enjoy unlimited crypto withdrawals.
What is FTX?
FTX is a cryptocurrency exchange with a wide range of trading markets including futures, spot, stocks, leveraged tokens, volatility indices, prediction markets, and fiat.
According to CoinGecko, FTX is the second-largest cryptocurrency exchange in both the derivatives and spot market, just behind Binance.
FTX boasts of deep order books and liquidity, thanks to its backing by Alameda Research (a quantitative crypto trading firm and liquidity provider).
Thus helping it to consistently provide tight spreads even with large size orders across all markets.
The FTX team
FTX was co-founded by Sam Bankman-Fried (CEO) and Gary Wang (CTO) and became operational on May 8, 2018.
Prior to founding FTX, Sam was a trader on Jane Street Capital’s international ETF desk and also designed their automated OTC trading system. While Gary was a software engineer at Google.
Other members of the FTX core team include Nishad Singh (Head of Engineering), Dan Friedberg (General Counsel), and Jen Chan (Chief of Staff).
More so, the exchange is partnered with several leading cryptocurrency firms including but not limited to Binance, Circle, Alameda Research, True USD, Paxos, Proof of Capital, Consensus Lab, Bitfinex, FBG Capital, etc.
FTX not only has a team of highly experienced and skilled professionals and businessmen, but it is also equally backed by a strong network of partners.
FTX Exchange core products and features
FTX offers 7 different trading markets which are:
The exchange also offers other investment opportunities and features such as staking, NFTs, initial exchange offerings (IEOs), and FTX Pay.
Below we discuss the various core products and services of FTX and how you can take advantage of each of them to build your wealth.
1. Futures
FTX exchange offers both traditional, perpetual, and index futures contracts with up to 101x leverage.
However, the maximum allowable leverage could be lower for large positions.
Some characteristics that make the FTX futures contracts unique and different from its competitors include:
- Futures contracts are settled in stablecoins. This means that you deposit stablecoins as collateral for all of the futures contracts and your profit or loss is settled in stablecoins as well. You can equally use the base currency and a number of other support assets as collateral if you so wish.
- The exchange maintains a backstop liquidity provider program that helps users whose account is in danger of bankruptcy to avoid clawbacks.
- FTX futures have careful and measured margin calls to avoid large price dislocations.
FTX futures market fees
FTX maintains the following tiered fees structure for both its futures and spot markets.
Staking FTT will allow market makers to enjoy up to -0.0030% trading fee rebates. And it costs only 25 FTT to start enjoying 0 maker fees.
2. Spot
The FTX spot market has over 250 coins listed with more than 413 trading pairs and $1 billion+ trading volume as of July 14, 2021.
Thus, providing traders with a wide range of highly liquid altcoins and pairs to trade.
The exchange also gives you the power to efficiently manage your trades with its 7 different order types which include: Limit order, Market order, Stop market order, Stop limit order, Take profit order, and Take profit limit order.
These different order types are available across all markets and trading pairs.
3. Stocks
The FTX exchange is more than just a cryptocurrency exchange.
The exchange also offers both futures and spot trading markets for stocks such as the Grayscale Bitcoin Trust September 2021 Futures (GBTC-0924), Grayscale Ethereum Trust (ETHE/USD), Tesla (TSLA/USD), Amazon (AMZN/USD), etc.
There are about 100 stocks futures and spot trading pairs on FTX for traders looking to profit from the price movements in the traditional market.
4. Leveraged tokens
Trading the futures market exposes you to the risk of liquidations and having to actively manage your trade to maintain a safe margin.
If you want to enjoy the potential upsides of trading with leverage without worrying about liquidations and margin calls, then consider trading leveraged tokens.
Leveraged tokens are innovative ERC20 assets that can give you leveraged exposure to cryptocurrency markets, without all the nuts and bolts of managing a leveraged position ~FTX.
Leveraged tokens allow up to 3x leverage and automatically rebalance to avoid liquidations.
There are over 100 leveraged tokens trading pairs on FTX to choose from.
5. Volatility Indices
The FTX volatility tokens market offers 3 different trading instruments.
- Options
- MOVE contracts
- BVOL (BTC volatility tokens)
i. Options
Options allow anyone to request a quote to buy or sell the underlying asset (currently supports only BTC) at a specified date in the future and for a particular price.
Once you place a request, you’ll get a corresponding quote almost immediately which you can choose to accept or reject if you don’t think it favours you.
ii. MOVE contracts
The FTX MOVE contracts allow you to profit from predicting (trading) how much or how little the price of the underlying asset will move within a specified period of time.
Similar to futures contracts, MOVE contracts can also be traded (long or short) with leverage.
For example, if you long a MOVE contract, you’re expecting the price of the underlying asset to move significantly within the specified period of time.
And if you short a MOVE contract, it means you expect the price of the asset to remain relatively stable within the specified period of time.
You win if your prediction is correct and you lose if you’re wrong.
There are 3 types of MOVE contracts on FTX: Daily moves which expire every 24 hours, weekly moves which expire every 7 days, and quarterly moves which expires every 3 months.
iii. BVOL (BTC volatility tokens)
BVOL are standard ERC20 tokens that attempt to track the implied volatility of crypto markets.
They derive their values from the FTX MOVE contracts and BTC-PERP contracts.
A $3000 worth of BVOL tokens for example will contain $3,000 worth of FTX MOVE contracts and $3,000 worth of BTC-PERP contracts. Thus BVOL is 1x MOVE contracts and 1x BTC-PERP contracts.
Click here for a more detailed explanation of the BVOL tokens and how they work.
6. Prediction
The FTX prediction market allows you to predict the outcome of world events with leverage for a chance to profit if your prediction is correct.
They are futures contracts that expire to $1 if the event occurs and $0 if it doesn’t.
As of July 14, 2021, there are 3 different prediction markets on FTX which are:
- Olympics 2021 (OLY2021), which allows you to bet on whether the Olympics takes place in 2021 or not.
- Trump 2024 (TRUMP2024), which let you bet on whether Donald Trump will win the 2024 US presidential general election or not.
- Bolsonaro 2022 (BOLSONARO2022), which lets you bet on whether Jair Bolsonaro will win the 2022 Brazilian presidential election or not.
7. Fiat
The FTX fiat market supports trading of a dozen pairs of national currencies such as EUR/USD. GBP/USD, BRZ/USD, CAD/USD, USDT/USD, TRYB/USD, etc.
8. NFTs
You can buy, deposit, withdraw, or display your NFTs in your personalized NFT gallery on FTX.
Some of the NFTs can even be redeemed for a good or service.
9. Staking
If trading is not your thing, you may want to consider staking the FTX Token (FTT) to earn regular, passive, and residual income.
10. Initial exchange offerings (IEOs)
The FTX IEO is an avenue to help new and upcoming cryptocurrency projects gain recognition, raise money for their project as well as get listed on FTX easily.
Similar to how every IEO platform works, only users who have staked a sufficient amount of the platform token (FTT) for a specified length of time are eligible to participate in the new token sales on FTX.
The specific conditions are on a project by project basis. So you will stay connected in their community and social media channels to know he the next token sale will be conducted and the unique conditions to participate.
12. FTX Pay
FTX Pay is a secure, low-fee payment processor that allows anyone to receive payments in fiat or crypto into their FTX account or an external wallet
The FTX Token (FTT)
FTT is the native cryptocurrency that powers the entire FTX ecosystem.
Holding and/or staking FTT on FTX will entitle you to:
- Discounted trading fees
- The opportunity to participate in new token sales (IEOs)
- Weekly airdrop of the Serum token (SRM)
- Increased referral rates: referrers that stake FTT are paid a higher fraction of their referees’ fees
- Maker fee rebates: stakers get maker fee rebates (in addition to the standard FTT fee discounts)
- Free swag NFTs: stakers can spin the non-fungible swag wheel for a chance to win a free NFT, redeemable for FTX-themed swag or resellable at the NFT marketplace.
- Bonus votes: stakers get bonus votes in our polls (in addition to the standard number of votes, based on FTT held and trading volume)
- Increased airdrop rewards: stakers get increased SRM airdrops (and potentially later other airdrops and yield)
- Waived blockchain fees: stakers get a number of free ERC20 and ETH withdrawals per day
Other tokenomics features of the FTT token include a weekly buy and burn program using 33% of all fees generated on FTX markets, 10% of net additions to the insurance fund (‘Socialized Gains’), and 5% of fees earned from other uses of the FTX platform.
Frequently asked questions (FAQs) about FTX
Is FTX exchange safe?
FTX is safe as it has never been hacked so far. The exchange employs several safety measures to protect investors funds on its platforms such as:
- Strong password and 2FA requirements
- IP and wallet address whitelisting
- Subaccounts management
- Constant transactions monitoring for suspicious activities by Chainalysis
- Manual review of large or suspicious deposits and withdrawals
- Backstop liquidity fund to protect accounts nearing bankruptcy
All serving to give users an extra layer of protection for their money.
Is FTX exchange available in US?
No. However, US traders can enjoy the basic cryptocurrency spot and OTC trading functionality of the exchange with FTX US (ftx.us).
According to the exchange, FTX US is an independent, fully regulated company that’s NOT owned by FTX.
Is FTX Regulated?
FTX is compliant with all international money laundering and KYC laws but it doesn’t seem to have any clear regulatory license or regulated by any known government entity.
The exchange is owned and managed by FTX trading Ltd —a company that’s incorporated in Antigua and Barbuda. However, its headquarters is in Hong Kong.
Interestingly, the exchange does not offer its services to residents and entities in its registered jurisdiction.
So the short answer is NO. FTX is not regulated.
FTX exchange review: Conclusion
FTX is one of the fastest-growing cryptocurrency exchanges, offering multiple trading markets to both institutional and retail traders.
The exchange is backed by Alameda Research which provides it with its deep liquidity, helping the exchange maintain tight spreads across all markets even with large size trades.
The exchange is not available to residents of certain countries such as the US, and even its own registered country. Which calls to question its license to operate.
However, the exchange is backed by a team of popular and visible individuals and a strong network of partners which gives it its legitimacy and the trust it enjoys.