An exchange that dates back to the colorful early days of cryptocurrency, U.S.-based Poloniex has had a long journey to its current version.
Acquired in a $400 million deal by Goldman Sachs-backed Circle in Feb. 2018, it does not allow users to trade government currencies for cryptocurrency. But while less appealing for beginners today, early on it was the main differentiator for the exchange.
Not only was Poloniex one of the first to offer crypto-to-crypto trading, it made a business out of quickly adding any and all cryptocurrencies for more seasoned traders.
During that time it also established a reputation as an honest business, but ended up losting 12 percent of its bitcoins in a 2014 hack, only to repay customers in full later that year.
Today, Poloniex is part of a broader plan by Circle to enter the more regulated cryptocurrency exchange market that also includes Gemini, Coinbase and itBit.
How does it stack up on usability? Let’s dive in:
Head over to the Poloniex website and:
- Click ‘Sign Up’ and enter your personal information
- A confirmation email should be sent to you, just double check your junk mail should you not receive it in 5-10 minutes.
- Run through the process of entering your basic information such as name, date of birth, email and desired password.
Because Poloniex only offers trading in cryptocurrencies, its know-your-customer and anti-money laundering requirements are less onerous.
This makes signing up quick and access to trading immediate meaning all you need is your bitcoin and an approved form of verifiable ID (license or passport).
Note: Creating multiple accounts with the intention for sole ownership could result in a ban from the exchange, you may need to link multiple accounts together.
Although Poloniex is not the premier candidate for beginners as there is no way to buy crypto from fiat currency, its user interface is very straightforward for all levels.
To begin trading you will need to verify your account with a government-issued document/form of ID so that you may receive your funds that you send yourself.
- We used a driver’s license and the camera on our Macbook to take a picture of our ID before submitting it and waiting 10 minutes for the verification process to approve us.
- We then set up two-factor authentication to enhance our security even further, making it impossible to log into your account remotely without a code sent to your phone first.
- In the top bar along the menu next to your account settings there should be an image of a spanner, highlight that and then select “two-factor authentication.”
Now would be a good time to write down your 16-Digit Key in case you fail to log into your account using the 2FA method (its located just below the QR code, displayed in red font).
Download Google Authenticator and scan the QR code displayed on your screen, then enter the code your phone provided you onto the Poloniex website.
And there you have it, you are now ready to send crypto to your wallet.
- Highlight “Balances” in the top-right next to where you accessed account settings and then select “Deposits and Withdrawals”
- Select an asset you are wishing to send to this wallet address (in our case we used BTC) and choose ‘deposit’ from the corresponding list.
- The address provided will be your own unique ID
IMPORTANT: Send only BTC to this deposit address. Sending any other currency to this address may result in the loss of your deposit!
You can send funds directly to your Poloniex wallet so long as it’s a cryptocurrency on the approved list.
Placing a trade
The markets exchange page is where you can see the price chart, order book for both buy and sell as well as the list of assets with percentage changes on the right-hand side of the screen.
A notice board, quite unique to the exchange, details major crypto events of the day and exchange related news for quick decision making.
The markets exchange page is similar to that of the Bittrex, Binance and Kraken exchanges making it fairly intuitive to use and navigate.
Trading is relatively easy on Poloniex provided you have set up your funds through a deposit transfer and offers the standard stop-limits on all trades.
Adding a stop-loss or stop-limit adds a triggered event of either buying or selling an asset (depending on the option selected) allowing a trader to be away from their computer should price rise or fall from the chosen price level.
You can also partake in margin lending for residents outside the U.S.
When you lend to margin traders on Poloniex, you’re lending to people who are attempting to enhance their trading returns by using their existing Poloniex account balances as collateral to borrow more crypto.
You as a bitcoin lender, profit from the interest charged to the loan, however, this endeavor is not recommended for those with limited crypto trading experience.
Once you’ve decided it’s time to withdraw your funds and transfer them off the exchange to another wallet address, click on “Accounts” in the top right corner then select “Deposits and Withdrawals”.
From there, find your chosen coin and click “Withdraw” along the same line toward the far right-hand side of the page.
Fill in your private wallet address and the amount you’d like to send then hit “Withdraw” at the bottom in blue.
Pros and Cons
- World first to add crypto-crypto trading and supports a vast array of cryptocurrency assets on the exchange.
- Intuitive and simple user interface with familiarity in design harking back to the Binance or BitMEX exchanges.
- Poloniex only offers trading in cryptocurrencies, therefore, its know-your-customer (KYC) and anti-money laundering requirements are less onerous.
- Only trades in crypto-crypto pairs including USDC, subjecting users to additional counterparty risk and volatility.
- While Poloniex does offer margin trading for some users, it prohibited for users based in the US for the time being.
- Low liquidity. At the time of writing, only 7 of Poloniex’s markets trade with more than $ million in 24-hour trading volumes and more than 80 trade with less than $50k of 24-hour volume.