Poloniex Exchange Review – Buy Bitcoin and Other Crypto
If you’re here to read about Poloniex exchange, you probably already know at least a little bit about cryptocurrency. For people who already own “foundational” coins like Ethereum and Bitcoin, Poloniex is a great place to trade them for altcoins like Monero or Golem or whatever else.
Founded in January 2014, Poloniex is one of the older crypto exchanges. It is currently the 6th largest crypto exchange in the world by daily trading volume. Based in the United States, Poloniex serves crypto traders and investors all around the world.
However, Poloniex exchange has been having some problems lately, with poor support, dropped transactions, no Poloniex app, and other user complaints. So which is it? Is Poloniex one of the best crypto exchanges as its daily use would indicate, or is it on the decline? We’ll tackle all of the above below, as well as provide simple instructions on how to use Poloniex exchange for your own cryptocurrency trades.
What is Poloniex Exchange?
Basically, Poloniex exchange is a place to trade Bitcoin, Ethereum, Monero, and Tether for dozens of other coins. Poloniex exchange does not accept payments with fiat currencies like the Dollar or Euro. Instead, you have to buy one of the above currencies through another exchange (like Coinbase for Bitcoin or Ethereum), then transfer those coins over to your Poloniex wallet.
Poloniex exchange offers a lot of value when compared to competitors like Bittrex. For one, Poloniex’s user funds are stored in cold wallets. This means that your funds will not be online, i.e. no one will be able to “hack” or steal your coins. Poloniex only keeps enough coins online to make sure there is enough to go around while trading. This makes Poloniex exchange safer than most, though there was a noteworthy hack in Poloniex’s early days.
Poloniex also offers a variety of trade types (margin trading, stop-limit orders). One interesting feature which we’ll cover later is that Poloniex enabled margin lending. Basically, this means you can lend your coins to other users which they will have to pay back with interest. This means that you could make profit on Poloniex without ever making a trade. We’ll cover the details about trading types below, but these should be familiar to experienced traders.
Now for the bad news. Poloniex has had trouble handling the massive demand that has been pouring into the crypto industry. This problem is by no means limited to Poloniex; you’ll pretty much find it with all popular exchanges and currencies. Nonetheless, this has meant that some users have had dropped transactions or have been unable to withdraw funds. Read on to find out if this is a dealbreaker.
Learn the Details in the Rest of this Poloniex Review
What’s Unique About Poloniex Exchange?
Poloniex has a number of unique qualities that make it stand out from the crowd. Here are some of the most basic.
Cold storage of 90% of user funds.
Allows trading with 4 currencies, not just Bitcoin and Ethereum as is often the case. Monero and Tether users will be pleased.
Allows Margin Lending, in addition to margin trading and stop limit orders.
We’ve already covered the first topic, but what about the other two?
Why Does Poloniex Exchange Support Bitcoin, Ethereum, Monero, and Tether?
The simple answer is that supporting these 4 currencies makes Poloniex useful to a greater number of customers than offering just one or two. It’s expensive and time consuming to trade currencies like Bitcoin, which is especially troublesome if you only perform the trade so that you can buy something else. The added currency support makes things simpler for a segment of the Poloniex user base.
Poloniex also supports these 4 coins in particular because of their history of growth and relative stability. No coin in crypto can be described as truly stable (with the exception of Tether), but Monero, Bitcoin, and Ethereum have had such widespread adoption and such dramatic increases in value, that they can be considered as stable as it gets for such coins.
Tether is the notable exception. Tether’s value is linked to the US Dollar. This is because it takes a lot of time and money to “Cash out” of a coin like Bitcoin into US Dollars. However, the US Dollar is much less likely to crash in value than, say, Bitcoin or any of the other digital currencies. Sometimes traders want a safe haven to park their wealth, because they fear that a crash is going to steal their wealth.
Tether provides this shelter from the storm, so to speak. Its price never fluctuates much above or below $1 exactly. Users can buy Tether with USD or any other major currency (on other exchanges) so that they always have money to spend on cryptocurrencies, if a good opportunity arises. Similarly, Monero is stable because of its committed user and developer base, and because security and privacy are what it does best.
What is a Stop-Limit Order?
No Poloniex review would be complete without explaining order types that are more complex than simple market orders. Fortunately for beginners, Poloniex exchange offers only one: the Stop-Limit Order.
An investor would use a Stop-Limit order if they wished to buy a coin at a lower price than it was currently selling, but wanted to make sure they didn’t buy it during a price crash, thus rendering their new investment almost worthless.
The “Stop” in the Stop-Limit Order is the price at which the investor hopes to buy. For our purposes, the investor might want to buy Bitcoin, but only if it falls to $17,000. However, one of the events in which this price action might occur is during a Bitcoin crash.
During such a crash, the price of Bitcoin might fall $10,000 or even more, in which case the investor doesn’t want to touch it. Setting a “Limit” at $15,000 would prevent the trade if Bitcoin’s price went any lower, thus keeping the investor from buying a crashing coin.
What is Margin Lending and Margin Trading on Poloniex Exchange?
Margin trading is easy to understand. Basically, it’s when an investor uses the balance of their portfolio as collateral to borrow even more money that they can use to trade for (hopeful) profit. Poloniex allows users to margin trade up to 2.5x their actual account balance (or the amount they are willing to lock in a contract).
Margin lending is a feature unique to Poloniex among all other crypto exchanges we’re aware of. Poloniex creates a peer to peer (P2P) market where some users lend their money to other users for margin trading. The lenders receive daily interest for as long as the money is borrowed, and can sometimes get impressive profits.
Poloniex Review Part 2: Buying and Potential Problems
So now you know what Poloniex exchange is and what it can do. So how do you sign up?
It’s pretty simple. Navigate to https://poloniex.com/ and click “Create your Account”. This will lead you to pages requesting personal information, like your social security number and pictures of your face and driver’s license. This might sound unusual, but it’s how Poloniex exchange stays secure and follows international regulations. Don’t worry, your personal information is stored even more securely than the coins in Poloniex’s cold wallets.
Poloniex may take several minutes to several days to verify your identity. They’re very busy and numerous users are applying at any given moment. Certain aspects of verification require one-at-a-time human effort, so be patient. Once you’ve completed level 1 Verification you’ll be able to trade. Once you’ve achieved level 2 Verification, you’ll be able to withdraw more than $2,500 each day.
Buying on Poloniex Exchange
Following your Poloniex login, buying coins on Poloniex is pretty simple for anyone with experience in crypto. Even for newbies, it’s not terribly hard. Simply deposit Bitcoin, Ethereum, Tether, or Monero from an outside wallet. Then use the symbols on the right side of the “Exchange” screen.
You can simply choose “Buy ETH” (in the example pictured. You can buy any of the other coins on the lists to the right.), which will sell you Ethereum at its current market value. The Stop-Limit order type will allow you to set your own prices. You also have the option to sell Ethereum, using the same parameters. Fees are pictured: 0.15% for market makers and 0.25% for market takers.
What Coins Can You Buy on Poloniex?
Poloniex currently supports 99 cryptocurrency trading pairs. These represent the following coins:
Just kidding. They’re real. And you can trade them all at Poloniex exchange.
Common Criticisms of Poloniex
Poloniex is a good cryptocurrency exchange with a long history, thousands of users, and a feature set that is both versatile and simple to use. However, Poloniex Inc. has not been without its recent difficulties. We’ll list the most common complaints about Poloniex Inc. and offer our perspective about whether or not these should be dealbreakers for new users like yourself.
Poloniex Exchange Doesn’t Have an App. You’re right. They don’t. The regular website works just fine on most phones, but it can be a pain to be without a dedicated app. Poloniex shows no sign of changing on this front. Several other large exchanges also lack dedicated phone apps.
Poloniex Has Terrible Customer Service. This is certainly the word on the street. When people have problems with their Poloniex login or Poloniex account, they often report not hearing back from Poloniex support. This is likely due to the fact that Poloniex has been growing so fast for so long, and Poloniex support hasn’t managed to keep up. Still, this is a problem. When users have money problems, they want them resolved fast!
I can’t withdraw my money! This is a complaint we see frequently on the forums, and we’re slightly baffled as to why it keeps occurring. Poloniex has taken the site down before during an Ethereum flash crash (the price crashed to $10, potentially selling off user coins for pennies on the dollar. Poloniex prevented this. Did they make the right choice?) and on other occasions, leaving their users without the possibility of withdrawing funds. It’s also possible the some new users haven’t verified their accounts, or haven’t reached Level 2 Verification enabling them to withdraw more than $2,500 daily. In any event, this is a problem we have not been able to replicate ourselves, and suspect it may be an issue experienced by a very vocal minority.
My transaction failed. This does seem to be a relatively common experience for Poloniex users. We suspect this is also related to the fast, constant rate at which Poloniex is being forced to expand their service.
With the exception of #2, all of these problems are related to problems of scale. This is an issue endemic to cryptocurrency in general, as all popular platforms have an influx of new users and are having trouble keeping up. Poloniex users have a right to be frustrated, but chances are they’d find similar issues somewhere else. We do hope that Poloniex improves matter, though, especially Poloniex support (or the lack thereof).
Final Thoughts on Poloniex Exchange
At the end of the day, we still think that Poloniex exchange is a useful service. Their support for numerous currencies, their ongoing security, and the ease of use for the features they offer to users all around the world ensure that they will continue to be used for months and probably years to come.
We hope Poloniex makes it through its current growing pains. In the meantime, we will certainly keep using it, and will keep our readers updated about any new events, problems, or features with Poloniex exchange.
Poloniex Exchange Review - Buy Bitcoin and Other Crypto
Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.
CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.
Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.
Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.