Our Take On FTX.US
NOTE: FTX has filed for bankruptcy and is currently not processing user withdrawals.
THE BOTTOM LINE:
FTX was built “by traders for traders,” making sure they have the tools they need to execute leveraged trading strategies. While this site isn’t aimed at newcomers to crypto, it is set up well enough that crypto traders of all levels can use it to perform trades 24/7.
- Built for traders
- Low trading fees
- Great mobile app
- OTC market availability
- Site may confuse newer traders
- Fewer crypto coins than the main FTX
- No opportunity to stake crypto
FTX.US is a cryptocurrency exchange that allows users to buy, sell, and trade crypto. As you might imagine, it’s a spinoff from FTX.com. Just like Binance, FTX realized it had to create a dedicated US version to comply with the US government’s cryptocurrency regulations.
What is FTX.US?
FTX is a platform heavily focused on medium to advanced crypto trading, including spot margin trading and derivatives. The main FTX platform has a native token called FTT, but it is not available in the US version of this platform.
The site is designed to give established traders quick access so they can trade a wide range of crypto coins, as well as advanced tools to automate trades. This is a perfect option for people looking for an exchange for swing trading cryptocurrencies.
Please note: FTX.US is not available in New York (US), Ontario (Canada), Cuba, Crimea and Sevastopol, Luhansk People’s Republic, Donetsk People’s Republic, Iran, Afghanistan, Syria, North Korea, or Antigua and Barbuda.
How Does FTX.US Work?
FTX.US launched in May 2019 with the tagline that it’s made “by traders for traders.” It is a CeFi exchange that focuses on making it easy for traders to pull off their crypto trades consistently. In their own words, FTX.US wants to “grow the digital currency ecosystem” and give traders a reason to come back to the exchange over and over again.
To get started on FTX.US, depositing fiat currency into your account is required. There’s no need for any external or browser wallets — simply log into the website. Since it’s a centralized exchange, the exchange itself is responsible for holding crypto assets on your behalf.
When it comes to jurisdictions, FTX.US is aimed at US residents first and foremost, but residents in other countries can indeed sign up for an account. It’s important to note that US residents cannot enjoy this flexibility on the main FTX website. They must sign up for an account on FTX.US, and the main site will even redirect US residents back to FTX.US if it detects a signup attempt.
The main crypto assets offered on FTX.US include the following:
Non-fungible tokens are cryptographic records existing on a blockchain that no one can imitate. The records can represent ownership of unique items such as digital artwork. You can buy, sell, and mint NFTs on FTX US’s official NFT marketplace.
FTX US supports NFTs on the Ethereum and Solana blockchains. It charges $1 to mint an NFT and a 2% fee to buy or sell one.
One of FTX US’s top features is an over-the-counter market for trading cryptocurrencies. Over-the-counter implies traders dealing directly with themselves instead of routing their trades through a centralized exchange. On FTX US’s over-the-counter market, you can interact with other traders to buy or sell cryptocurrencies. You’ll get live quotes for any trade you want to initiate and execute the trade if you’re happy with the quote.
One of the main benefits of trading over the counter is privacy. Your OTC trades won’t register on an exchange, so other people can’t monitor your moves. This privacy aspect is mostly beneficial to big-volume traders “whales” whose transactions tend to affect market sentiment.
There’s no standard trading fee when you use FTX US’s over-the-counter market. Any associated costs are baked into the live quotes.
FTX US allows you to exchange one spot crypto asset in your wallet for another with ease. For instance, if you have 1 BTC that you want to convert to AVAX, you can head to your wallet, select “CONVERT”, accept the provided quote, and the equivalent of 1 BTC in AVAX will land in your wallet.
Conversion can be tricky. FTX US promotes it as having no fees, but it makes money by charging a spread on your conversions– your exchange rate will always be above the spot market rate. The “no fee” aspect is technically true but doesn’t paint the full picture.
The Quant Zone
Quant trading, or algorithmic trading, implies trading based on a pre-defined set of instructions. You can configure your FTX account to execute trades based on specific market conditions. For instance, you can configure it to automatically sell your BTC holdings once the price of 1 BTC tops $20,000. The idea of the Quant Zone is to clinch profits even when you’re not actively using the app.
You’re responsible for any trade executed by the Quant Zone on your account. You can’t dispute FTX US over the performance of your quant trading strategies. We recommend only experienced traders to use this feature.
FTX US added stock trading for users in July 2022. You can buy or sell stocks of popular companies like Tesla, Apple, Microsoft, etc. The platform offers nearly 1,000 stocks to users and continues adding more as time goes.
Stock trading is similar to crypto trading, but there are some notable differences. Stocks are less volatile than cryptocurrencies, and some stocks pay quarterly dividends to owners. Fortunately, this exchange lets users collect stock dividends, unlike some other trading platforms.
The performance of a stock is tied to the business of the underlying company. You can read financial reports for any publicly-traded company to guide your investment decisions.
Head to the “Stocks” section of your FTX US dashboard and you can see the list of stocks available to trade. FTX US doesn’t charge commissions for stock trading or accepts payment-for-order-flow from market makers like other no-fee brokers. The platform is using fees from crypto trades and other revenue sources to cover the costs of facilitating free stock trading, at least for now.
You can request an FTX-branded debit card that enables you to spend the balance in your FTX US account at different merchants worldwide. It works like your typical debit card but uses the funds deposited in your FTX US account.
It’s true that most merchants don’t accept crypto, but don’t fret. The FTX card handles the conversion to fiat currency that you can spend. The equivalent of any fiat amount you spend will be deducted from your FTX US account balance.
For now, the FTX card is only available to U.S. residents with a social security number. However, FTX has partnered with card network Visa to launch the card in over 40 additional countries starting in 2023.
Borrowing and Lending
FTX US lets you borrow or lend funds for margin trading. This feature works like a peer-to-peer system. You can lend out your funds at predetermined interest rates to users that want to trade with margin. Similarly, you can borrow funds for margin trading from other users and repay with interest.
Margin trading on FTX US is only available to users with at least $100,000 or equivalent assets in their account. Qualified users can trade with up to 10x leverage on the spot markets. If the value of your margin or collateral falls below 5% of your leveraged position, it’ll trigger a liquidation, so beware.
Margin trading can multiply your profits if you use it well. It can also multiply your losses, so beware. On the other end, lending out your funds for margin trading on FTX US is a good way to accrue passive income with fewer risks. You can lend out many tokens, such as BTC, BCH, and USDT, and fiat currencies, like USD and CAD.
How Much Does It Cost to Buy Crypto on FTX.US?
If you’re going to be trading on FTX, it’s highly likely that you’ll start with spot trading. Those fees are based on the past 30-day volume, as you can see in the chart below:
What are Maker and Taker Fees?
As you can see in the screenshot from the FTX.US fees page, FTX charges what are known as maker and taker fees. This is done to support the overall trading environment, keeping things in balance.
A trade is categorized in two ways: whether it helps make the market or if it takes from the market. Ultimately, liquidity is the measure in terms of whether a trade is making the market or taking from it. Let’s take a popular crypto asset like Bitcoin. If you’re putting in a delayed order (limit order) on a Bitcoin trade, that means you’re not acting right away. That means you aren’t taking liquidity out of the market but adding to it for other traders.
So, what about taker fees? Well, if a trade is seen as taking from the market, it means that they’re placing orders that need to be acted upon right away. That’s done through market orders, which are available right away, unlike limit orders.
Alternatives to Consider
Coinbase: A better selection of tokens
Coinbase is the leading crypto exchange in the U.S., although rivals like FTX US seem to be catching up lately. Coinbase offers a more vast selection of tokens and trading pairs. It supports over 100 tokens, whereas FTX US supports just upwards of 20. Yet, FTX US lets users buy stocks, while Coinbase doesn’t.
Coinbase has significantly higher fees than FTX US. It charges up to 0.6% on spot trades, whereas FTX US charges a maximum of 0.2%.
Crypto.com: Good for Budget-Conscious Traders
Crypto.com lets you trade over 250 tokens, much more than what FTX US offers. However, you can’t buy stocks on it, unlike FTX US. The main advantage of Crypto.com is its lower fees. Its highest fee for spot trades is 0.075%, less than half of FTX US’ highest fee of 0.2%.
Public.com: Better for stock trading
Public.com lets you buy stocks and cryptocurrencies just like FTX US. It offers just 25 cryptocurrencies, almost the same as FTX US. But, it offers over 9,000 stocks, compared to 1,000 stocks on FTX US. Public.com is the better option if your focus is on stock trading.
How Safe is Your Crypto with FTX.US?
One of the things that makes FTX stand out is its wide range of security features. While nothing is guaranteed in crypto trading, even perfect security, FTX has some interesting security protocols that work well together. Here’s a quick list:
- Strong password requirements
- 2FA required for all users before any trading can take place
- Separate password available for withdrawals
- Ability to create custom logins for trusted but separate secure access
- Whitelist — approve only certain wallet addresses to protect your account from malicious withdrawals
Final Thoughts on FTX.US
It’s clear from navigating the site that FTX was built for traders. Whether you’re interested in margin trading, options trading, or swing trading, FTX gives you the features you need. Being able to automate trades is a game-changer with the right strategy. While the US version isn’t as stuffed with crypto coins compared to the original FTX site, there are still enough trading opportunities to explore.