With the sheer number of cryptocurrency exchanges on the market today, it’s hard to know where to start. There are a lot of options available and if you’re new to the crypto community, finding the right place to begin buying, selling, and trading your favorite digital currencies can be a chore. Thankfully, those of us at Total Crypto are here to help you sort things out with our Poloniex review.
While there are many exchanges that are reputable and reliable, like Binance and Coinbase, there are also platforms that are not as forthcoming with their policies. Some also don’t offer the support and help users needs when things get complicated or challenging.
Poloniex is an exchange that teeters on the edge between offering a solid user experience and not being as transparent with its customers as it should be. Let’s take an in-depth look into the Poloniex exchange so you can learn more about it and determine whether or not it’s the right exchange for you.
Who Are Poloniex?
While Poloniex doesn’t hold the same cache as Binance, Coinbase, or Bittrex, it’s still a well-known exchange in the crypto community. Based in the United States, Poloniex was established in 2014 and holds a substantial portion of the cryptocurrency market with its high volumes of altcoin trading.
Founded by Tristan D’Agosta, Poloniex initially resided in Wilmington, Delaware, in the United States. Recently, however, the site updated its address to show that Poloniex, LLC is now in Boston, Massachusettes.
A recent acquisition by Circle has seen the platform regain some of the luster it lost in previous years to other exchanges, along with opening up its services to those from around the world. Poloniex has also substantially expanded its support for cryptocurrencies, ranking as one of the top exchanges in this regard. Poloniex is ranked as one of the top twenty crypto exchange in the world based on overall daily trading volume.
Even though Poloniex resides in the US, it does not place geographical restrictions on its users. This is primarily because of the purely crypto design of the platform, which means Poloniex doesn’t have to abide by local finance and banking regulations as the site does not support fiat currencies.
Poloniex Accounts and KYC
In previous years, Poloniex has given its users the ability to create anonymous accounts which didn’t require any user information or identity validation. At the time, this was their first tier account level and many users chose to stay there. The first tier daily withdrawal limit was $2,000.
Now, however, Poloniex has made the choice to change its policy, much to the chagrin of its users. The platform decided that it will not support unvalidated accounts, making all users on their system to go through verification.
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This means that every trader on the Poloniex platform is now required to go through verification, putting them at a tier 2 account status, giving them a daily limit of $25,000. The problem, however, was the way in which Poloniex went about this change.
Users report Poloniex assuring them that funds in their accounts would be accessible if they were unable to get their accounts verified by the day of the deadline. Unfortunately, actions speak louder than words, and those same users stated that Poloniex did not give them access to their funds unless the proper documentation was provided.
What does this mean to you? It really boils down to how comfortable you are with providing a platform like Poloniex your personal information. While other exchanges do ask for KYC (Know Your Customer) and AML (Anti-Money Laundering) verification, most are upfront about the process.
The trading platform is an important part of any exchange. When using Poloniex, you have three different tabs that run across the top from which you can make your selection. You’ll see “Exchange”, “Margin Trading”, and “Lending.” For this section, we’ll discuss the Exchange tab.
While the Poloniex site could use some tweaking, it does function the way you expect it to. It’s a user-friendly platform that is easy to navigate, even for novice traders. When you enter the Exchange tab, the chart is the first thing you’ll see. Below that are your order forms, which give you the ability to place different types of orders (which we’ll get to later). The right side of the platform gives you the option to switch between markets based on what you want to trade.
You do have to scroll down to have visibility to the order books, market depth, and previous orders which can be a point of frustration. Due to this, the layout of the Poloniex trading platform isn’t very efficient for users.
If you’re the type of person who likes to perform technical analysis or needs advanced tools for trading purposes, Poloniex might leave you a little disappointed. The options available are very basic and only offer simple indicators. The most advanced features are Bollinger bands and moving averages.
Poloniex does not offer the option to complete chart drawings so you can identify replacement levels on the exchange. You can, however, zoom out and in as needed and adjust the time on the horizon. This helps you to achieve a better overall idea of how the market is behaving.
Therefore, if charting is an important part of your trading day, then you have a few options. If you want to stick with Poloniex, then you should purchase some charting software to use outside of the exchange. Otherwise, you should seek out another exchange (which we would recommend) like Kraken for more advanced trading features.
When it comes to order functionality, Poloniex resides in the middle of the pack. The platform offers the standard buy and sell order options which allow you to set your price or trade at the current market price. Keep in mind that this will directly impact your fees as part of the maker-taker dynamic, which we’ll discuss later.
However, if you prefer to have a safety option like a stop loss order, you can place those as well on the Poloniex site. You have the ability to select a stop loss level which makes the order execute automatically once the price reaches the level you determine.
There are also limit orders, which lock in an order once the price reaches a certain point. These orders help to limit your risk, especially if you’re a day trader with a short-term horizon.
Unlike a lot of their competition, Poloniex does offer margin trading on its platform. Those using Poloniex can use a peer-to-peer option which allows them to borrow funds if they want to begin margin trading.
The platform allows users to secure the funds they wish to use for trading, while also taking advantage of a lending feature. This feature gives users the ability to lend funds to other traders using the platform. There are only a few exchanges which offer this option, and it’s a great feature for Poloniex as it serves to attract advanced traders to their platform.
Margin trading is analogous to leveraged trading as you are taking up a position that is bigger than your primary investment. Leverage options are overly high, as Poloniex will only let you trade on margin at 2.5x your investment.
While this might be a point of frustration for more savvy traders, if you’re new to margin trading, Poloniex and their lower leverage trading levels might be a good place to start.
If you like to trade altcoins, then Poloniex has plenty of options for you. Currently, there are over 99 markets available on the platform with trading tied to four base cryptocurrencies. These are Bitcoin, Ethereum, Monero, and Tether, which you can see in the image below:
Poloniex is a crypto-to-crypto platform with an option to store funds in Tether, which is a stablecoin which represents the United States Dollar. For reference, 1 Tether is equivalent to 1 USD. This might come in handy while you’re using the exchange as Poloniex does not offer support for fiat currencies.
A huge detraction from using the Poloniex platform is its customer support. There have been reports of unusually long response times when an issue has been reported and complaints that issues and questions might go unanswered for months at a time.
There are also concerns that withdrawals take longer than normal to process, which the exchange says is due to the sudden uptick in demand. However, when compared to other platforms experiencing similar demands, Poloniex falls short of the standard.
Slow or unresponsive customer service is a huge cause for concern with anyone wanting to use Poloniex, however, there are additional resources at your disposal. You can use a list of FAQs available on the site to find answers to questions you have.
You’ll also have access to a support center, which is more than likely going to have the answer to any question that comes up. This area covers everything from exchange fees to two-factor authentication and anything in between.
If, however, your problem is technical and needs the help of customer support, then you’ll find yourself relegated to dealing with exceptionally long wait times.
When using Poloniex, you can expect to incur both maker and taker fees. Maker fees are 0.15% per transaction, while taker fees are 0.25%. Additionally, Poloniex has a volume-tiered maker and taker fee schedule. If you’re unsure of your trading tier, check out the Tier Status page on the Poloniex site. If you decide to lend funds, a 15% fee is taken from any interest you earn.
Each transaction happens between a maker and a taker. The maker is the party who has the order on their order book before the trade occurs. The taker places an order that lines up with the maker’s order. When you trade on an exchange, you can choose to buy a cryptocurrency at the ower offer available or you can bid to purchase at another price you specify.
If you’re trading on the Poloniex exchange and your trading volume exceeds 24,000 BTC then you’ll be exempt from trading fees.
Is it Safe to Use Poloniex?
When you’re looking for an exchange to trade your cryptocurrency, an important item to consider is whether or not you can trust the exchange. Cryptocurrency exchanges are targets for those with malicious intents, which is something Poloniex knows about very well.
In 2014 Poloniex suffered a significant attack which resulted in the exchange losing over 12% of the Bitcoin held on the site. Based on the owner of Poloniex, the hacker managed to find a loophole in the code which gave them access to the funds on the exchange.
Since that time, Poloniex has not suffered another setback, however, the exchange only returned part of the monies to its users. This all begs the question, how secure is Poloniex now?
2FA, or two-factor authentication, is the minimum for an exchange to be considered secure. This added layer of security helps to protect the funds you keep on the exchange. With Poloniex, this is not the default setting, so you have to go into your settings and enable it. This is a great barrier to keep hackers from accessing your digital currency.
Regardless, if you do decide to use Poloniex, we recommend you enable 2FA so your funds are protected. Additionally, don’t leave large amounts on the exchange. Transfer them to a cold storage wallet or purchase a hardware wallet to keep them in.
Cold Storage and Site Monitoring
If you do decide to keep your funds on the Poloniex exchange, the site keeps them in cold storage so that they are in a secure environment offline. Poloniex also keeps some coins online available in hot wallets for a short period to limit the exposure of their coins to hackers and attacks.
Additionally, the exchange does their part to keep their eye on any suspicious activities that might result in malicious access to their platform. Poloniex monitors their exchange on a regular basis and any moment suspicious behavior rears its head, the IP address is blocked.
Even though the trading volume on the Poloniex exchange was worthy of being a top exchange on the crypto market, the platform has been plagued by continuous problems. The site has not been as transparent as others and provides little to no information about the organizational make-up, ownership structure, or top management employees.
Many pointed to the fact that the lack of a physical office led to distrust between the exchange and its clients. The expectation was that Poloniex should operate with more credibility and transparency.
The opinion of the site itself continued to degrade as negative online reviews grew while customer support for the exchange declined. Additionally, many users questioned the liquidity of the site as they encountered difficulties when attempting to withdraw their funds. Drawn out withdrawal periods made it near impossible for users to quickly liquidate their cryptocurrency and oftentimes, their funds were frozen while they awaited approval from the exchange.
As a result of all these problems, Poloniex lost a significant amount of market share to their competitors like Coinbase, Huobi, Binance, and others. The hope is that the acquisition of the exchange by Circle will start to turn things around, however, it might be too little too late for many users based on previous behaviors.
Things Not to Like
There are some items about this exchange that we believe you should know prior to making a decision about whether or not Poloniex is the right exchange for you.
- The site itself looked dated and there are no advanced tools or features available for traders who are more technically savvy. This could be a direct tie to why the platform has seen a significant decline in volume. At the same time, other exchanges like Kraken and Binance are taking the necessary stamps to update their outdated platforms.
- The site’s customer service is a huge problem. There have been reports for years that Poloniex does not provide the needed support to its users. The fact that the site locked users out of their accounts when moving to a new more secure system only exacerbates the problem.
- Lastly, the lack of support for fiat concerns could be a big issue for those who are new to cryptocurrency. Many exchanges like Binance, Bittrex, and many others are pursuing the option of allowing the purchase of cryptocurrencies with fiat currency.
Still Want To Go For Poloniex?
- Deposit methods: crypto only.
- Over 120 available trading pairs.
- Offers margin trading.
- Trade on the go with the Poloniex Android & iOS app.
Create An Account If You Are Convinced Poloniex Is The Correct Choice For You.
Even though Poloniex is still a very well-known platform, the problems associated with the exchange make it difficult to endorse. The site continues to lose ground to competitors like Coinbase and Binance as it refuses to make the changes needed to keep up with industry leaders.
The fact that the exchange has been willing to be less than transparent in the past gives us pause for concern, especially when it was willing to deliberately mislead its users and lock their accounts when they specifically stated information to the contrary.
Additionally, customer service with the site is, simply put, abysmal. Users consistently report having to wait days and weeks to find a resolution to simple problems or issues. There’s also concern over the amount of time it takes for users to liquidate their cryptocurrency especially given the fact that other exchanges don’t take anywhere near as long.
We here at Total Crypto can’t in good conscience recommend using Poloniex for crypto trading. You won’t have the tools you need at your disposal and it still remains to be seen as to whether or not the site will address the issues that plague it. For now, we suggest holding off on using Poloniex until we know for sure how much change happens as a result of the Circle acquisition.