FTX was first launched in May 2019 and is the most recently established exchange of the ones that I regularly use. It is without a doubt the exchange launching the most innovative and creative trading products at this time.
I knew from the start that it was likely not going to be a flash in the pan moment. This was mainly due to being backed by Alameda Research and the founder of Alameda and now CEO of FTX, Mr. Sam Bankman-Fried.
Now you might be asking yourself, what is Alameda and what significance do they have in the crypto world? The majority of traders probably are familiar with the company from the infamous BitMEX leaderboards.
They currently have one account that’s public on the leaderboard with 5244 BTC gain. In other words, these people know what they are doing.
This is perhaps not surprising by a former employee of Jane Street, a notorious quantitative trading firm and liquidity provider. Now that you understand why I had high expectations for the exchange from the launch, let us dive into the tutorial and my thoughts about FTX.
Creating an Account
The registration process is straightforward, click register and insert your information to create an account as displayed above. You can choose between the old form or the new one, if your browser has any issues with the “I am human” captcha, use the old form instead.
If you want to receive a lifetime 5% discount on all your trade fees, feel free to register by clicking the button below.
Unfortunately, you can only trade a restricted amount without providing more information due to the exchange being KYC (Know your customer) compliant. This is similar to what you find at other exchanges such as Binance and CoinBase.
If you only register your email address, name and country of residence, you will have a $2 000 daily limit, but this can be adjusted based on your trade volume. I suspect that for traders with smaller accounts, this will suffice.
If you want to trade with unrestricted size on the exchange, you will be forced to jump through the traditional KYC hoops. Which includes submitting official ID, proof of residence and personal photo with a note.
There are four different KYC levels on the exchange, take a look below. Note that conditions 1 and 2 will be the most popular ones for the average retail trader.
Before you can deposit, you will need to activate 2FA (Two-factor authentication). This can be done through one of the many 2FA apps such as Authy, Google Authenticator or Duo Security. Honestly, this should be one of the first steps to secure your account, whether the exchange forces you or not.
When you are ready to deposit, click your account name and choose what you want collateral you want to deposit. You can use Bitcoin (BTC), USD and FTT, the latter being the FTX exchange token, much like what BNB is to Binance.
I find being able to deposit USD stable coins and immediately trade with USD as my collateral no matter the USD or perpetual trading product to be one of FTX’s most significant advantages towards its competitors.
Sure, there are other exchanges that have USDT as the only option to BTC collateral, but these tend to be very subpar in terms of liquidity in comparison to other tradings products. That said, they are steadily growing and becoming more popular. On FTX however, I can access their most liquid products while using USD as collateral. Note, FTX offers USDT, but I would not prefer it over USD as of this time due to the above reasons.
A great thing about depositing and withdrawing with FTX is that they will pay your blockchain mining fee for you, which is something most exchangest won’t do. On the other hand, they may apply an 0.10% fee if your withdrawal/deposit volume exceeds your trading volume. They will only do so after reaching out to you, and not something I have had issues with, fortunately.
Deposit via Credit Card
It is also possible to purchase crypto directly on the site through a third party system run by Simplex. When you click deposit on Bitcoin, you will have an option at the bottom of the window to “manage crypto purchases via credit card.”
The charges seem to vary depending on the amount, so double-check if you think the quote you get from Simplex looks fair. In general, on all exchanges, credit card purchases come with a premium price tag for convenience. If you were to buy $1 000 worth of bitcoin, you would pay around $75 fees based on the calculations I did on my quoted price.
All assets in your wallet have an alternative to convert to another asset. The most popular option is to convert from Bitcoin to USD when you want to hedge your exposure, and then convert back to Bitcoin when you are bullish and want to increase your long exposure.
The above gives you a mere indication of how many different trading pairs there are, and more importantly, there are trading products that you are unable to find on other exchanges.
It doesn’t show you the complete picture because each category of trading products has all different subcategories, as shown by Bitcoin below which has the most amount of different trading products.
BTC-PERP being the most popular and liquid one, as usual. I would strongly recommend anyone to anyone to read what FTX has written in regards to leveraged tokens or other trading products which you may, or may not be familiar with so you understand what you are trading and the risks involved.
I prefer to trade all trading products as perpetual futures (PERP), which is what most traders are familiar with. This is similar to what you can find on the other popular derivative exchanges. Keep in mind that there are some differences as to have funding is calculated and methods of auto deleveraging and liquidations.
Based on statistics, FTX has on average good liquidity, consistently being placed in the top 5 in terms of open interest despite lacking in volume compared to the other exchanges. Take a note of the sheer amount of trading pairs available on FTX, which is constantly changing.
It is essential to note that I’m fairly critical of exchanges in general when it comes to providing liquid trading products. I am far too familiar with the issues and costs of trying to trade illiquid products with size. This is why you must consider the size of your trades when choosing the different products.
Having many innovative and a large selection of products is a double-edged sword. On one side, we have a great selection and one of a kind products to trade. On the other hand, we have a lot of assets that are not liquid enough to trade with any size.
This is why it is crucial, no matter the exchange, to adjust your trading size according to the trading product’s liquidity.
Types of Trading Products
You have two different types of futures products available on FTX, the most popular one being “PERP”, it is a perpetual future contract that has no expiry or settlement. Meaning you can hold your position as long as you want, given you are position does not get liquidated.
The other will usually have a few numbers in the name such as “BTC-0925”. The first two digits indicate the month, and the second two the exact date the contracts are going to expire and settle. In this instance, the BTC futures contract will settle on September the 25th. The exact expiration time and date are always clearly given when you click on the product. This is referred to as a traditional futures contract.
Besides the standard future contracts we are accustomed to, they have also launched some unique and exciting trading products.
Let’s say you are bullish or bearish on specifically the majority of low cap coins (as an example), instead of picking out or one-two you somewhat reduce your risk by using the index contracts instead of buying specific ones. The risk is reduced because you don’t have to rely on a single coin performing, as long as the majority of low cap moves in your direction, you will profit.
This is because diversification will lower your systematic risk, but please bear in mind, I strongly suspect the Beta (measurement of systematic risk) of the different coins in the index contracts are pretty strongly correlated. This means the effects of diversification or not great, but still present, and thus the index futures make for a great trading product nonetheless.
Presidential Elections Futures
As another example of FTX’s creative trading products, they have a presidential futures product. This means you can purchase for instance, Trump contracts for around $0.43. If he wins the reelection, the value of your contracts will expire at $1, in other words a 132% increase in value. If he loses on the other hand, your contracts will expire at $0. I think it’s interesting to bring these types of products into the crypto exchanges, it broadens the usability of the exchange in many ways.
Options have increasingly become more popular in the cryptocurrency space, much due to the influx of more traditional traders. Options can be a powerful tool to control your downside, but if you are not familiar with options it’s certainly something I would recommend reading and educating yourself thoroughly about before diving into, as with anything that could potentially lose you money.
FTX offers traders to buy and sell BTC options. An option is a contract that gives the holders the right but not obligation to buy or sell something at a specific date and price.
To illustrate quickly how this works, let’s say you were to buy a call at $9 000 with expiration time on December the 31st 2020 at 05:00 UTC. If you were long 1 call contract, that would give you the right to buy at the given price on the expiration date. If the price ended up being $9 800, you would have the right to buy 1 bitcoin valued at $9 800 for $9 000.
You will also find ample of trading products on FTX that go under the category of leveraged tokens.
One of the more common once being BULL and BEAR, the former being equivalent to a 3X long on Bitcoin and the latter a 3X short on Bitcoin. Leveraged tokens allow you to get leveraged exposure to whatever underlying asset you are trading without maintaining collateral, worrying about funding rates or liquidation. Keep in mind that since these tokens are leveraged, there will be higher volatility than what is found in the underlying assets.
FTX Move Contracts
Move contracts are yet another innovative trading product from FTX. You can choose between daily, weekly, monthly or quarterly contracts.
What is unique about FTX move contracts, is that it’s the volatility that’s of interest, the total amount, for example, Bitcoin has moved. It is not important whether the price of Bitcoin as gone up or down, the only important thing is how much has it gone up or down.
If you are long on FTX move contracts, you are positioning yourself that the market will be volatile, and Bitcoin will move a lot, regardless of direction. If you are short on FTX move contracts, you are positioning yourself that Bitcoin price will trade in a range without any significant volatility.
If you want more information, take a look at the official FTX move contracts youtube video.
FTX allows you to create subaccounts, which means you can have independent balances, margin and conduct different trades on each subaccount. Each subaccount can also have its unique API, so if you need to separate your algorithms, this is very convenient.
Remember when you adjust your leverage, if you do, to do so only in the accounts you wish this effect to take place. If you do not desire to use any leverage, you don’t have to do anything set on 1X as standard.
This is an exciting new feature, and FTX is the first exchange I have seen that has implemented its solution to let users develop and create algorithmic strategies.
With algorithmic trading gaining a lot of interest in recent times, FTX has created a service for the demand. However, it’s not a complete drag & drop service, which I believe will scare a lot of users away.
The features which I think will be far more popular, which are coming soon, are the options to either sell your algorithm to other traders directly on the platform or subscribe to the highest returning algorithms in the Quant Zone.
As with all derivatives exchanges, FTX is also able to offer more than enough leverage with leverage up to 101X. Meaning you can trade with 101 times the size of your account, which I would never recommend. I know that people have different trading systems and strategies, so I can’t talk for everyone, that said, I never surpass 5X leverage personally.
Most exchanges let you adjust the leverage on the fly when buying orders, however on FTX you click your account name and then go into the settings to change it. You will be able to adjust your leverage when buying orders up to your account set leverage, but never above.
“We’ll make sure to keep building our engine as we grow to stay ahead of the game; right now our peak latency is < 200ms”Sam Bankman-Fried (CEO)
The trading engine has appeared to be pretty stable compared to a lot of its competitors in periods of extreme volatility. As shown above, the CEO of FTX is aware of the importance of a robust trading engine and the ambition necessary to have a competitive platform.
I have experienced the inability to conduct manual trades in a short period once. A period where other exchanges were also struggling, however, all my trades through the API have never failed me.
As for specific numbers, each subaccount can handle 30 calls per second, which means that each account is likely to be able to handle far more than you find necessary to throw at it.
FTX has implemented impressive security standards, I would even go as far as to say that they are above the majority of competitors I have seen.
Like the majority of other serious exchanges, they are storing the majority of their client’s assets in cold wallets. They also have it stored in hot wallets for several important reasons, such as being able to process live exchanges between fiat and cryptocurrencies being one.
The great thing about FTX’s hot wallets is that they are entirely backed by outside capital. In other words, customers don’t need to worry about something happening to their personal assets as FTX can cover any losses at any given time.
They also have other measures, such as working together with Chainalysis, a well-known company focusing on analyzing blockchain and cryptocurrency transactions. The company has a history of aiding companies and government agencies tracing stolen/hacked funds.
Chainalysis’s role with FTX is to provide software to monitor any suspicious transactions on the exchange in real-time. This is further combined with a manual review of deposits and withdrawals cements FTX as the exchange with one of the best security protocols in the industry.
The user interface is pretty neat and it comes with the option of toggling the visual skin between night and day mode, the former being the preferred option for most. The interface is not as sleek as some others, and the standard color might look a little dated. Still, I understand it can be challenging to look super elegant when trying to display a lot of information and customizable options to the user.
My favorite part about the interface is the available customization options for the user. The blocks of information are easily movable with drag and drop so each trader can fit the visual information to their preferred needs.
There is undeniably a lot of options and it might look complex first time logging in, but you will quickly get a grip and understand that it’s not that complicated. I have been using FTX for a while and I must say they have made a bunch of small interface improvements over time to make your life easier.
I used to have a specific interface related mishap, where I would go through my subaccounts from the account menu, and from time to time, when looking at charts it would be easy to place orders from the wrong accounts, which was rather frustrating. As you can see above, they have done their best to combat this by giving us a visible account bar, making it very easy to switch between the different subaccounts and monitor the positions.
If there is something you are very unhappy with regarding the interface, voice your opinion, because they have shown that they do listen to their users.
When it comes to different order types can choose from:
- Stop-loss limit
- Stop-loss market
- Trailing stop
- Take profit
- Take profit limit
It is important to note that all of these orders will not get executed until the price reaches your set trigger price.
FTX can offer all of the advanced orders alternatives we have grown accustomed to from serious cryptocurrency exchanges.
They do have one neat function that I have not seen that many places, a retry function for your stop-loss, take profit and trailing stop orders.
What retry does is it will attempt to execute your order until it is filled or closed if it did not manage to do so the first attempt, given the trigger conditions are met again.
If you would like to learn more advanced orders, please read our guide on advanced orders and functions. It covers most of the order types and different functions you might come across on the majority of crypto exchanges.
There is an entirely different approach to the fee structure on FTX than on other similar exchanges. There are both upsides and downsides in regards to how they have decided to approach things.
FTX has decided to incentivize frequent trading, preferably combined with large trades by creating a system that lowers your fees the higher your monthly volume on the exchange is. I’m fine with this and I understand as an exchange they want to incentivize active trading as they will make more despite the discounts.
The standard taker fee without any discounts is 0.7%, this is lower than their main competitors, which is excellent considering if you sign up with a referral, you will get 5% off from the start. Then you might get some more discount with holding FTT (FTX exchange token), which we will take a closer look at shortly, as well as some volume-related discounts. This all means the taker fee quickly becomes both impressively low and unbeatable amongst the top exchanges.
Now that we have established taker fees are amongst in the industry with the established exchanges, what about maker fees?
Well, it’s not that great for the average traders. The starting maker fee is 0.2%, which means even though you are making liquidity instead of taking, you will be charged with a 0.2% fee.
The norm is being paid a similar percentage in rebate for creating liquidity, so you can see there’s quite a stark contrast. This means if you are mostly using limit orders, FTX’s fee system is not suited for your trading style. On the other hand, if you are mostly placing market orders, FTX is the perfect spot for you in terms of fees.
They can do this because they don’t rely on retail market makers. They can provide special programs for substantial traders willing to provide backstop liquidation liquidity and those with eligibility to join their VIP programs. Perhaps most importantly, they are well known for being able to market make efficiently and provide liquidity as mentioned in the introduction, they likely don’t need assistance in this area.
FTX Token Fee Discount
The FTX token has a lot of the same properties as BNB (Binance exchange token) in regards to your encouraged by both exchanges to purchase the tokens for cheaper trading, and the circulating supply is slowly getting lower.
If you are actively trading on FTX, it is wise to purchase at least a small amount of FTT to unlock the first tier discounts. You will likely earn back the potential losses if FTT decreases in value through saved fees. The larger the size you trade with, the larger the reason to go through all options that can lower your costs. You can also choose to use FTT as collateral when trading.
Data regards to circulating supply, value and burn can be found here: FTT Data.
The first thing you need to know is that funding occurs every hour on FTX, unlike what we find most competitors, the more traditional every 8 hours funding. This explains why it always seems to be quite low.
Funding between different exchanges varies significantly, however the monthly average tends to even out.
If you are interested in the funding history for different assets on FTX, you can find that here: FTX funding history.
To withdraw, click “wallet” under your username, once in your wallet, you will find each asset has a clear withdraw label. Note, just as with depositing, there is no fee unless your withdraw/deposit volume exceeds that of your trading.
Out of all my regular exchanges, FTX undoubtedly has the fastest withdrawal times out of them, particularly compared to arguably the main derivative competition, such as BitMEX and ByBit. There are no fixed times to process withdrawals, this is rather done as soon as they can. They can do this due to the nature of being able to keep some funds in their hot wallet, which, as mentioned earlier, is backed by outside capital, causing no real security concerns for the users.
Unlike a few competitors, FTX does not provide 24/7 live support in the same manner. They have a telegram channel and email address for support, in my experience, the telegram channel’s admins are quite attentive and able to respond reasonably quickly.
They provide support through telegram for multiple languages if you would prefer support in another language than English.
FTX has few admins on telegram compared to the industry standard of having countless support members. It is possible to have some periods through the day where it may take longer to receive assistance than it would with other exchanges. In FTX’s defense, this was more prominent in their earlier days, going through the logs of their telegram, it seems they have a system to respond to inquiries quite quickly throughout the day.
The upside is the technical expertise and knowledge in the FTX telegram far outweigh what I have encountered with its competitors. It also seems like the admins in the FTX telegram are far more comfortable with typing in English than what I find with other exchanges, which is excellent because this avoids any unnecessary misunderstandings.
One of the greatest strengths of the FTX support is being able to communicate directly to FTX employees. From the top of the chain you can talk directly to the CEO who pops in quite often to answer some questions and help out, the CMO, President, Chief of Staff, Head Engineer, Development Manager and many more are available directly in telegram. I have not seen any other exchange that has made their staff so easily accessible for users, so it should come as no surprise that their ability to answer difficult questions is unmatched.
Mobile Trading App
FTX has its own trading app which is great for checking things on the go. Considering how complex and somewhat clustered the standard interface looks, I think they have done an impressive job making the mobile interface reasonably easy to use and navigate for all users.
The app is available for iOS and Android and you can download your preferred version from the links below.
FTX Review Summary
FTX is a serious exchange with an immense amount of different trading pairs and innovative products to capture the users curiosity and interest.
The ability to easily hold USD collateral with all the most popular trading products is a fantastic excuse to use the exchange. If you are already exposed to Bitcoin, you have effectively long exposure to the asset as any negative movement will cause your account to go down in USD value.
Most people in cryptocurrency tend to be bullish long-term on Bitcoin, which means most of us likely already have some exposure. If you want to be able to trade, and not necessarily increase your portfolio risk, trading with USD becomes an excellent method of precisely doing that. With the easy to use conversion, you can quickly gain Bitcoin exposure or reduce it as you see fit.
I believe that with new trading products, there will be ways to implement these into your system to offset risk or to tailor it more to your risk appetite. I do believe many traders will prefer the conventional perpetual contracts, which I understand since I do as well. However, I would be foolish to dismiss the opportunities new well-balanced products can bring. For example, during the last two months, traders shorting move contracts are arguably more profitable than shorting/longing Bitcoin directly. I do appreciate having trading products that can take advantage of non-volatility, which is historically a place where traders suffer.
The elephant in the room when it comes to FTX is that they are likely one of the best market makers in the game, in terms of profitability. In other words, they are one of the most efficient at making money from people trading. Meaning that on FTX, you will find a lot of smart people trading, with smarter people working to make money off that trading, like any exchange, the difference is I know they’re very good at their job.
I think it’s fair to briefly touch on that as so few people do. I’m not dependant on any particular exchange for my trading, in other words, if any exchange provides me with a poor trading service, they will no longer have my business.
There is a reason I still trade at FTX, because at the end of day I believe trading at FTX with USD is one of the best ways to reduce your exposure. The exchange itself works well, even though visually I would like to see an update. I do also thoroughly enjoy new trading products that can give me an advantage over users not having access or the knowledge on how to trade.
FTX supports so many trading products that it feels unfair to touch on the liquidity, nonetheless, there are indeed quite a few illiquid products. Having traded some of the higher volume alt perpetual contracts with a moderate size, I know how bad slippage can get. Despite a lot of the products being stellar and the convenience of using USD, users still need to gauge whether their desired product is liquid enough for their preferred desired trading size.
When it comes to technical support, it is above all others and I like that the FTX staff is so engaged with their core audience and present themselves to be very accessible. If you have any good ideas or suggestions for improvements, then you shouldn’t be shy because they are willing to listen.
You should consider trading at FTX if you find any of their trading products attractive, but most importantly, you have a desire to trade effortlessly with USD or other fiat and convert back and forth to Bitcoin to adjust your exposure to manually then this is the exchange for you. As of right now, I consider this to be the best USD/Fiat Bitcoin exchange.
All exchange reviews may be subject to change if the exchange becomes better or worse after the review has been published or the information becomes outdated.