FTX is one of the recently established cryptocurrency derivatives exchange platforms but is seeing rapid growth despite its youth.
In this FTX review, we’ll look into the platform, its numerous trading features, and its pros and cons.
What is FTX?
FTX is a crypto exchange platform formed in 2018 by its current C.E.O, Sam Bankman Fried, and current CTO, Gary Wang. The former was a trader on Jane Street Capital’s EFT desk, while the latter was a Google Software Engineer.
In 2017, the pair had formed Alameda Research Ltd, a cryptocurrency liquidity and leading quantitative trading platform. The foundation was bound to assist FTX in maintaining deep order books and 24/7 OTC activities.
Alameda Research incubated the now newly-formed FTX platform by funding it a total of $8m to facilitate its growth. From 2019 to early 2020, FTX was receiving support from numerous investors, some of them which include :
- FGB capital
- Greylock Partners
- Proof of Capital
- One Block Capital
Around March 2, FTX was already attracting other high-value investors like Liquid Value Capital. Later on, FTX realized success and more support to venture into the crypto business. Investors pumped its trading volumes and formed a network that FTX could rely on for growth. The FTX managerial team is pretty straightforward, and the members have made their social media profiles public!
FTX’s mission is to provide a versatile cryptocurrency platform for traders. It seeks to achieve this by providing a world of innovative crypto-trading products like volatility products, leveraged tokens, and more.
FTX aims at developing a more robust platform that suits the needs of both professional traders and first-time users.
Now, FTX is owned by FTX Trading LTD. FTX offices are located in Hong Kong.
Before we get to anything else, let’s see how you can get yourself on the platform.
How do you Sign Up for FTX?
Signing up on FTX is very easy and straightforward.
Click here to access FTX, then hit the ‘Register’ section in the top right corner. There are different security clearance options/levels before you can access the services of FTX, and it all depends on the account type.
Let’s look into the different account levels within FTX.
Level 0 can be taken to be the ‘Basic Plan’ of the FTX platform. It has the least signup requirements, as you only need to have an Email address and a strong password. However, there’s so little to earn from this level, and it’s recommended that you try a higher-level plan. Well, you can deposit and participate in trading activities and withdraw, but everything is pretty much limited for you. For instance, in withdrawals, you’re only entitled to a lifetime withdrawal of $1,000. That’s so little!
On Level 1, FTX allows you to withdraw a daily maximum of $2,000 or $9,000 if you’re trading on high volumes. That’s a massive improvement from the $ 1,000-lifetime withdrawal maximum on Level 0. Moreover, to sign up for FTX’s Level 1, you are required to provide, aside from a verified Email address, your name, and country. If they all match FTXs specifications, then you’re good to go.
Level 2 on FTX requires identity verification, which includes these details :
- Your full name
- Place of birth
- Home address
- A valid government identity card
- Your picture, holding your national ID and a paper written ‘FTX’ and the date.
Upon verification by FTX, you can now trade and withdraw unlimited crypto. However, for unlimited fiat withdrawals, you’ll need to advance to level 3.
Level 3 is the highest level on FTX. To complete the verification for this level, you need proof of your residence address and bank statement. Again, upon verification, you are entitled to unlimited cryptocurrency trading and withdrawals.
FTX Key Features
As an emerging cryptocurrency platform, FTX has been offering pretty much its features. It has outdone several other cryptocurrency derivatives exchange platforms by giving a wide array of trading options and products.
Again, FTX has launched several innovative and unique trading products that attract traders and make it stand out against competitor platforms. Examples are Leveraged Tokens and MOVE contracts.
FTX also tries to make your experience easy by offering low service fees, an OTC desk, TradingView Charts, and tight spreads. Moreover, FTX has developed mobile Android and iOS apps to allow traders to access it via mobile.
Other features that make FTX stand out include;
- Up to 101× leverage on stakes – FTX offers a handsome leverage multiplication aimed at maximizing your output as a cryptocurrency trader.
- Fiat Currency Transfer – Traders can use popular currencies within their trade expeditions. Some currencies supported are the AUD, CAD, EUR, GBP, and USD. Moreover, FTX accepts deposits from credit cards. So that’s pretty much versatile!
- Easy Conversions – All currency transactions have been decentralized into one place. You can convert currencies and trade within your preferred markets, all from one wallet.
- Extensive Customer Support – FTX is ready to help you when you need it the most. It disposes of a range of resources and features aimed at helping traders navigate the platform seamlessly. Again, FTX provides chat groups in different languages.
- Institutional Grade Services – FTX offers top-notch features like OrderBooks, Deep Liquidity, a liquidation fund, Unlimited withdrawals, and an OTC desk.
How to Trade on FTX
As said earlier, FTX offers one of the most versatile cryptocurrency trading platforms you can get in recent times. These tradeable items include;
- Leveraged Tokens
- MOVE contracts
- Stock Trading
- Volatility Index Trading
- Prediction markets
- Futures Contracts
You can do Futures trading on over 20 assets and leverage on over 45 tokens. The overall design of the FTX trading platform is to engage the traders in more straightforward trading.
FTX has come up with an innovative asset for crypto traders known as Leveraged Tokens. Leveraged tokens are ‘cryptocurrencies’ that help you track a target asset’s performance with increased leverage. For example, you get maximum leverage of 101× on FTX, although they’ve set it at a default of 10× for security purposes.
FTX provides access to around 45 different leveraged tokens. That is a straightforward way for FTX users to get leverage. The BEAR and BULL tokens automatically manage how they’re accessed to maintain a balance within the platform and prevent liquidation. They act as ERC20 tokens and go either 3× long or short when trading with digital assets. Examples of leveraged tokens include;
- BEAR/USD Bitcoin token
- BULL/USD Bitcoin token
- ETHBULL/USD Ethereum token
- ETHBEAR/USD Eretheum token
There are no margin requirements needed from your account balance to participate in FTX leveraged tokens trading. The FTX leveraged tokens help traders with risk management. Their exchange automatically reinvests profits back into the traded item.
However, using Leveraged Tokens risks you to liquidation in case the market goes against your expectation.
FTX is also pioneering a new cryptocurrency derivatives market; the MOVE contracts. MOVE contracts depend on the value of BTC, and the contract expires within a set period.
MOVE contracts allow you as the trader to trade on whether the value of the BTC will have risen/fallen to a certain amount within a set time. Then, when the period is over, you either make a profit or loss from the value of the BTC against your prediction.
It is important first to study and analyze the volatility of the BTC before making your prediction.
You’re now able to engage in stock trading. You can buy stocks from popular organizations like Netflix, Amazon, Google, Facebook, and more right from the FTX platform. Then, later on, you can sell them when their value goes up.
However, unlike common stock trading, you can only trade stocks using cryptocurrency instead of fiat. Again, you can split the tokenized variants of acquired stocks into smaller units.
FTX also offers the option to trade cryptocurrencies on Options Contracts expiring in USD. Options contract works as ‘right to sell’ and ‘right to buy’ positions. In addition, just like in futures contracts, you can opt into long or short leverage.
For instance, you can trade on ‘the right to buy and sell’ underlying assets at a price by a set time or date. Moreover, FTX has made it possible for users to configure the contract settings to their liking. You’re even in control of the expiration time of your futures contract.
Volatility Index Trading
Just as the name states, you’re playing around with the volatility of different cryptocurrency assets in the FTX market. With FTX’s specialist volatility index, you’re able to track and measure the fluctuation in prices of various crypto-items in the market.
Traders can, after that, risk betting from the market volatility within their specified time frames.
Predictive Markets work pretty much like normal gambling, but you’ll be doing it with crypto this time. Here, FTX lets you predict future occurrences and win if your prediction comes true.
For instance, the most popular prediction market is the ‘Presidential Elections.’ Your prediction expires once the final result is reached.
FTX offers you futures contracts on more than 20 popular cryptos like ETH, LINK, BTC, and BNB. The Futures contracts tab also has Index Futures that allow you to navigate the crypto market seamlessly. Examples of these Index Futures include;
- Small-cap coins (SHIT-PERP)
- Mid-cap coins (MID-PERP)
- Large-cap coins (ALT-PERP)
Moreover, FTX users can trade regional baskets (DRGN-PERP), privacy tokens (PRIV-PERP), and exchange tokens (EXCH-PERP) by choosing an appropriate index.
The FTT Token
FTX has its utility token, the FTT token. FTT allows users to complete trading activities as well as receive benefits attached to the same. However, the token is not available to users in the US.
Supported currencies on FTX
FTX supports a good number of currencies despite its youth. The Fiat currencies supported by FTX for deposit, withdrawal, and trading include :
FTX also allows you to trade with several cryptocurrencies that include :
- FTX token (FTT)
- Bitcoin (BTC)
- Bitcoin Cash (BCH)
- ChainLink (LINK)
- Binance Coin (BNB)
- Ethereum (ETH)
- Ethereum Classic (ETC)
- Tether (USDT)
- PAX Gold (PAXG)
- Tron (TRX)
- Tezos (XTZ)
- Huobi Token (HT)
- UNUS SED LEO (LEO)
- Dogecoin (DOGE)
- BitMEX Token (BTMX)
- Bitcoin Satoshi’s version (BSV)
- Algorand (ALGO)
- Cardano (ADA)
- TomoChain (TOMO)
- BiLira (TRYB)
- Cosmos (ATOM)
There are no deposit, withdrawal, and futures settlement charges on FTX. Trading from your wallet is also free as costs are deducted from the price you’re quoted. However, there are 0.10% redemption and creation fees on leveraged tokens. Moreover, there is a daily management fee of 0.03%
Trading fees increase with an increase in leverage. But, again, fees for MOVE contracts are dependent on the underlying index’s price and not the MOVE contract.
Is FTX suitable for Beginners?
When we look into the variety of products and services offered by FTX, it is clear that the platform may not be best for beginners. Aside from mastering the technical meaning of terms in the platform, trading BTC and other cryptos may require good prior knowledge. FTX might not be the best for traders who are starting their cryptocurrency trading journey. Here’s the reason;
Trading on derivatives is much more complicated than spot trading. If you indulge yourself in the business without mastery of the art, then you might tread on a rough patch. To avoid huge losses, it’s advised that you first learn the technicalities of the platform before you can lay hands on it.
FTX Customer Service
Nonetheless, FTX does a good job of helping you with the information you need on their platform. It provides several resources, including a blog, a Help Center, and a YouTube channel. Moreover, you can also search for articles and opinions from popular FTX forums. In addition, FTX has created different social media accounts to cater to their fanbase, including Facebook, Twitter, and WeChat. Finally, the FTX team also provides emails and Live Chat as customer support.
The diversity of FTX Customer Service is second to none, as it’s done in multiple languages. (Korean, Chinese, Russian, Spanish, French, and English). That ensures that all customers’ queries are attended to just appropriately.
FTX also exercises flexibility by providing a mobile app supported by both iOS and Android. With that, you can always monitor your FTX account day in, day out.
Is FTX a Secure Cryptocurrency Platform?
Security in cryptocurrency platforms is one thing all customers need to be assured of before indulging in anything. Traders want nothing less than an assurance that their invested fortunes are safe.
FTX has managed to avoid hacks and any other malicious attacks since its inception in 2019. The platform doesn’t say much about its security structure, but it’s pretty evident that it’s substantially solid.
However, we know that FTX uses full SSL encryption and two-factor authentication to help traders keep their accounts secure. In addition, users keep their accounts safe via SMS verification, Google Authenticator and Authy.
FTX has also incorporated a backstop liquidity provider system and a liquidation engine to help its three-step solution. The latter helps at limiting clawbacks and handling marginal calls. The liquidation engine manages liquidations of funds in the marketplace. It closes positions before they turn negative.
FTX also has an FTX Insurance Fund. It is meant to shield the customer from losses in case of uncalled-for market movements, which could cause the liquidation of the items on the exchange.
Anyone operating on 50× or 100× leverage options pays higher insurance fees such that in case there’s a rapid shift in the market, any unfair losses can be refunded accordingly. Moreover, FTX has set aside a portion of the non-FTX owned FTT tokens (around 5%) to pay traders if the insurance fund doesn’t cover all losses.
All in all, FTX is a secure platform, owing to its security structure and the insurance fund feature. Moreover, the platform’s founders acted as makers of OKEx and BitMEX and have a wealth of information and experience surrounding security.
Can we safely conclude that FTX is one of the most versatile cryptocurrency trading platforms out there? Yes. Moreover, it offers a handful of quality trading markets and features like Prediction Markets, MOVE contracts, Futures Contracts, among others. Moreover, its interface is pretty much easy to navigate.
You also get additional features like fiat transfers, deep liquidity, and unlimited withdrawals, which all work perfectly for retail and institutional traders. The mobile app also makes it easy to monitor your positions at any time.
FTX is growing fast, and its innovative structure poses a good gesture that it will soon be carving out its space in the highly competitive cryptocurrency sector.
Besides, the platform is secure. You can trust that your currency is safe, and in the event of extreme market volatility, the FTX platform has proven to perform well in those circumstances.
Bernard currently works full-time as a growth hacker and content researcher for HUSTLR. When he was studying in the US 2 years ago, he flipped Yeezys on eBay as a side hustle to fund his degree and living expenses. He’s currently working on his Amazon FBA business & dropshipping on the side.