HitBTC Review – A Sketchy Crypto Exchange With Better Alternatives
As so often happens in cryptocurrency trading, HitBTC is a formerly solid digital asset exchange that has decayed into something of use to no one at all. While HitBTC is still up and running, rampant complaints about lost or stolen funds are filling up cryptocurrency forums day after day. We’ll do our best in this HitBTC review to show what HitBTC once was, but we can only recommend that today’s users get their funds out ASAP, and for new users to stay away entirely.
We’ll also do our best to outline a reliable alternative to HitBTC: eToro. eToro isn’t a conventional exchange like HitBTC, but it does offer users the same profit potential, without requiring them to deal with confusing exchange mechanics, horrible customer service, or (we’re sorry to say) outright fraud.
What is HitBTC Exchange?
At its best, HitBTC was an intuitive and reliable exchange, allowing users to trade some of cryptocurrency’s most popular assets (Bitcoin, Ethereum, NEO, and many many more). HitBTC was founded in 2013 and went into public operation the next year. For the next couple of years, things went smoothly for the most part.
HitBTC is a European crypto exchange, and for a few years played an important role in this market by accepting fiat payments and transfers. HitBTC even accepted fiat payments from some non-European countries, offering access to a host of new users who were not served by HitBTC’s well-known competitors.
Within the past months (late 2017 through Q1 2018), a change is being observed in HitBTC. The once-responsive customer service is giving people the run-around, or ignoring questions and comments entirely. Deposited funds are failing to appear in user HitBTC wallets. Withdrawals are being indefinitely delayed.
After reviewing many exchanges, these problems don’t sound so unusual to us (unfortunately). As with Russian crypto exchange YoBit, HitBTC’s formerly reliable service has devolved into a model with all of the earmarks of a common scam. Angry users are many, and HitBTC can’t be seen as an option for crypto users.
Whether HitBTC will be able to turn around has yet to be seen, but we recommend that everyone go to other exchange, like Binance, which can be trusted with their money.
Why is eToro a Good Alternative to HitBTC?
So if HitBTC isn’t usable, what are some good alternatives?
Fortunately, there are plenty of good exchange in cryptocurrency today. The industry has become so popular that crypto users have a lot to choose from in this regard. However, crypto’s ongoing popularity has also introduced its share of scams and fly-by-night services. So while there are excellent exchanges like Binance, Bittrex, Coinbase, etc., unscrupulous actors have introduced fraudulent exchanges as well, like HitBTC and Yobit.
It’s also important to point out that even among the highest-quality exchanges, there are problems for the new user. Trading crypto is challenging for newcomers. Simply navigating a complex trading screen can befuddle even the brightest newbies, and once the purchase has been made the problems are only just beginning.
When you buy coins, you have to store them in a personal digital wallet. This is a piece of software you download separately from the coins you buy, and from the exchange you used to buy them. Just like with exchanges, some wallets are scammy and you could lose your funds if you choose the wrong one.
Coins that you own have to be sent to the correct address if you hope to keep them safe and secure. Crypto wallet addresses are long alphanumeric codes. If you miss one letter when you’re sending your coins from exchange to wallet, your coins will likely be lost forever. Similarly, if a hacker uses software to replace your wallet address with their own wallet address, you’ll be inadvertently donating your funds to these thieves.
These issues are not insurmountable, but they are definitely more confusing that many new users are willing to tackle. That’s why alternatives like eToro give users a much easier way to profit from cryptocurrency investment.
eToro doesn’t require users to face the challenges associated with cryptocurrency ownership. With eToro, there are no wallets, no complicated addresses, no chance that you could lose all of your money by making a simple mistake or by getting hacked by some cyberpunk jerk.
Instead, eToro sells contracts, not crypto. When you “buy” $1,000 in Bitcoin with eToro, you’re not buying Bitcoin itself. Instead, you’re buying the right to profit on $1,000 of Bitcoin. The distinction is important. Say you “bought” $1,000 of Bitcoin on Tuesday with eToro. On Friday, Bitcoin has jumped up 12%. If you “sell” your Bitcoin contract on eToro, you’ll have made $120 in profit, just like if you bought Bitcoin on Coinbase and sold it 4 days later.
The difference is that, with eToro, no coins actually change hands. eToro is a financial services company. They keep track of the coin contracts in your portfolio, and agree to give or take money depending on the real world price action of those assets. But users like yourself don’t have to store, move, or otherwise worry about the underlying asset. You don’t actually own anything!
And that’s a good thing, because this way there’s nothing to lose. For crypto investors, there is basically no difference in the experience, except that it’s easier. You can still make money, just like with normal Bitcoin ownership, but there are many fewer changes to screw up and lose your wealth.
Why Have Exchanges Like HitBTC Started to Suck?
Like we said earlier, HitBTC is far from the only cryptocurrency exchange to go south, often resulting in the loss of user funds. But why does this occur? Wouldn’t crypto exchanges want to keep their service quality high in order to get more business? Well, it’s not as simple as that, and there are more than a couple of reasons why an exchange like HitBTC might start to suck.
Lack of Talent – Engineers and computer scientists adept at blockchain-specific applications are few and far between. In fact, skilled technicians who know how to create and maintain these systems are highly sought after in this industry. We don’t know for sure, because HitBTC is not a publicly traded company, but HitBTC is likely suffering from insufficient staffing to fix its problems, at the engineering, management, and customer service levels.
Wild Growth Rates – One of the most difficult parts of doing business for all cryptocurrency exchanges is the sheer rate at which these exchanges have had to grow. Customer demand is intense, and unrelenting. Exchange giant Binance added more than 250,000 users in a single day last year! These astronomical growth rates have led to other exchanges, like Kraken and Bittrex, to temporarily stop accepting new users. For some exchanges, this ban has been ongoing for months. It’s possible that as HitBTC has grown, many more problems have surfaced, and individual user issues have started to fall through the cracks. Without good management, these problems will increase and HitBTC may not be able to recover.
Isolated Fraud – HitBTC has had a couple of scandals involving whistleblowers and reports of internal fraud. These events are not unique to HitBTC. Last year, Coinbase had its own major scandal involving insider trading. Just because one or two employees do something bad, doesn’t mean that a company is corrupt from top to bottom. But a company must act fast and fiercely to rid itself of fraudsters, actions HitBTC has not seemed to take part in.
Full Fraud and Exit Scams – Still other crypto exchanges and projects are scams from the beginning. Some try to be ongoing scams, staying active as long as possible before being forced to cease operations by authorities. Still others (Bitconnect, for example), just keep the platform up and running as long as it takes for them to make the money they want, then they close it down and take everybody’s money. It’s unclear yet if HitBTC is as bad as this. It’s entirely possible that their many problems are due to high demand, lack of talent, and a few bad apples. But if HitBTC closes operations in the coming days, as many are suggesting they will, we can quickly ascertain that HitBTC (at least at the end of its existence) was nothing more than a fraud for exit scammers.
How to Save Yourself From Crypto Exchange Scams
It’s important to point out that there is no financial service in the world which is completely trustworthy. As years go by, even the best banks and financial services get old, corrupted, or irrelevant. It’s up to the consumer to manage their funds carefully, even when using financial services like HitBTC and other crypto exchanges.
The first way to stay safe is to read reviews from diverse sources. Don’t just read large reviews from popular websites, as these reviews might be bought and paid for, with the writer having to say certain things to please the paying advertisers. In addition, look at forums like Reddit and Bitcointalk, to find out what real people are saying about services like HitBTC.
The other way that crypto users can keep themselves safe when using these companies is to never keep their coins on the exchange. And exchange is a place to trade crypto. It’s not a place to keep crypto secure. In fact, a major cryptocurrency exchange hack seems to happen once a month, if not more often.
Don’t let this happen to you. When you buy coins from a trusted exchange, send them to a high quality crypto wallet. Choose a wallet where you own the keys, and use cold wallet options like Paper wallets and hardware wallets whenever possible.
When we take the time to skillfully vet the crypto financial services we use, then take the time to carefully store the coins we own, we make it much less likely that (alleged) fraudsters like the ones at HitBTC will be able to make off with our wealth.
Final Thoughts on HitBTc
It really is a shame that a trusted service like HitBTC would mortgage its reputation to steal user funds. Even if the countless anecdotes about fraud are simply the result of incompetence on HitBTC’s part, it’s still a marvel that the company could so quickly burn so many of its customers as it has in recent months.
We don’t know why HitBTC has started to suffer, and we don’t know what’s going on within the company itself. But it’s clear that the issue has moved beyond simple negligence and that the company is not an active part in the restriction of some users’ access to their own capital.
This is a distressing development for a well-known, high-quality exchange, once known for its wide range of supported assets and ease of use. But this is one of the possible outcomes for a financial services industry that is not well-regulated, and which has so much money pouring through it at all times. There are simply too many reasons for dishonest exchange owners to funnel user funds into their own private wallets. We’re at a unique time in history where these bad actors may find that they escape notice and prosecution, because of a regulating body that is just not up to speed with how these technologies work.
Whatever the case, new users should stay well away from HitBTC. There are simply too many other services which out-class it in every respect, and will especially not steal user funds. That’s the end of the matter, really. We use these companies because we believe we can trust them with our money, to correctly account for and channel all funds to the correct destinations. When a company like HitBTC breaks our trust, they make themselves immediately irrelevant to the needs of the market. We urge you to boycott HitBTC. Only then can the better exchanges rise to their deserved level of prominence.
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