In this Bitbuy review, we will take a look at a mid-sized cryptocurrency exchange based in Canada.
They offer a simple and effective way for Canadian users to buy and sell cryptocurrencies with their CAD. In the parlance of the cryptocurrency community, Bitbuy is a "fiat gateway" for access to a few of the most popular coins.
However, can Bitbuy stand out in an increasingly competitive market? Should you consider them as your exchange of choice?
In this comprehensive review, we will take a deep-dive on Bitbuy. We will go over their security, platform support, fees and technology. We will also gather the opinions of the Canadian crypto community on their experience with Bitbuy.
With that said, let's jump in.
Bitbuy Overview
Bitbuy has been around since 2013 but was originally called "InstaBT". It was founded by Adam Goldman and Ademar Gonzalez.
InstaBT was created as a way for Canadians to quickly and easily get their hands on Bitcoin. For those who can remember, 2013 was still a relatively new time in the crypto markets and exchanges to easily buy Bitcoin were few and far between.
As the exchange progressed, they decided to re-brand to Bitbuy and included a number of other cryptocurrencies on the platform. However, Bitbuy wanted to expand their offering dramatically and accepted an investment from a private equity firm in 2018.
After the investment, Gonzalez left Bitbuy and was replaced by Chris Ragobeer. They are also joined by Jordan Anderson as the VP of Sales and Marketing as well as Dean Skurka who heads up compliance.
The Bitbuy offices are located in Toronto, Canada. They are actually a subsidiary of the First Ledger Corporation which is a blockchain services company.
The primary operation of First Ledger Corporation is the Bitbuy exchange although they do offer other solutions. These include the likes of digital currency merchant solutions as well as blockchain consultation.
Bitbuy Fees
One of the most important requirements for regular cryptocurrency users is the fees that are charged by the exchange. These include fees that are charged when sending / withdrawing currency as well as the fees that one could be charged for merely buying and selling.
When it comes to exchange transaction fees, Bitbuy operates a simple flat scheme. They have two different rates for sell and buy orders on 'Express Trade'. When you are using this type of trade you will be charged 0.5%. According to feedback from BitBuy this fee will be reduced to 0.2% once they launch with their new user interface in the coming weeks.
These fees are currently slightly above average but they are made up for the lower fees that you will pay on withdrawals / deposits.
If you are trading on the "Pro Platform" (explained below) you will be charged according to a maker / taker fee schedule. If you are a taker you will be charged 0.20% whereas if you are a maker you will be charged 0.10%.
Simple Explanation 👨🏫: Makers are those who provide liquidity on the books by placing limit orders. Takers remove that liquidity by placing market orders
Deposit Fees
If you were to fund your account in Cryptocurrencies, then you would not pay any incoming fees. However, if you were to send CAD to Bitbuy then you could incur the fees below:
So from the above it seems as if the most affordable method for you to fund your account is with a good old wire transfer. You are likely to get them on the exchange in about the same time as a standard Interac funding will take.
While you can opt for the express Interac transfer, we are of the view that it not really worth the fees that are charged. It merely requires you to carefully plan your deposits such that you are getting the most bang for your buck.
Withdrawal Fees
When it comes to withdrawal of cryptocurrencies, Bitbuy says that these are free. This is true but only on the exchange side. They are still likely to apply a network or miner fee to your transaction so you should keep that in mind.
If you were going to be withdrawing your funds in CAD then the following fees would apply.
These fees are actually quite reasonable and are below the rates that are charged by some of the other Canadian exchanges. For example, their Interac e-transfer withdrawal commands a fee that is less than that which is charged by Coinsmart for example.
Therefore, if you are withdrawing Canadian Dollars that is less than $3,000 then the Interac e-Transfer is perhaps your best bet.
Note that Bitbuy is fully transparent regarding their fees, so you can always have a look at this page to verify the current fees.
Is Bitbuy Safe?
One of the biggest threats to exchanges and their users are hackers. We know all too well about the damages that can be caused when a hacker is able to penetrate an exchange's system. Hence, exchange security is a key consideration for us.
When it comes to security at Bitbuy we were able to glean the following information from their site:
Exchange Side Security
Bitbuy says that they operate a policy of 95% cold storage of coins. This is the standard among cryptocurrency exchanges and protects the bulk of user's assets from hackers.
For those who are not familiar with the concept of cold storage, it is the practice of taking a wallet off line and storing it in an air-gapped environment. It really just means that the exchange is making sure that the private keys of their wallets are inaccessible from digital threats.
Bitbuy also says that they complete daily encrypted and distributed backups of the data on their servers. This will help them should they ever come under any sort of Dedicated Denial of Service (DDoS) attacks.
User Side Security
While exchange security is a priority, the user is often the weakest link when it comes to crypto theft. Therefore, Bitbuy has instituted the best practices in user protection on their systems.
The first and most important thing that we will check for is secure SSL encryption on an exchange. Bitbuy has this as you can see from their SSL padlock in the browser. It is also critically important that you make sure that this is visible when you visit the exchange.
If you ever visit Bitbuy and you do not see the padlock then it is likely that you are on a phishing site and should leave it immediately. However, even if a hacker is able to get access to your password, two factor authentication is likely to protect you.
Bitbuy requires all of their users to enable two factor authentication by default. Whenever you log into your account or try to initialise any sort of withdrawal then you will be asked to complete this. You can either use it as an SMS based 2FA or you can sync it with Google Authenticator.
Proof of Reserve Audit
Bitbuy has recently also completed a proof of reserves and security audit. This is particularly relevant in the fallout from the QuadrigaCX collapse.
Bitbuy employed the services of CipherBlade which is a US based blockchain forensics firm. The key findings from the report are as follow:
- Fiat Holdings: All fiat holdings at Bitbuy were verified by bank statements and are well reflected in their back-end systems.
- Digital Holdings: The sum of the digital assets held in their hot and cold wallets matched user account balances 1:1.
- Background Checks: Bitbuy and its operators also passed a number of background checks. They also audited their cold storage management process to make sure it was above board
It is also important to note that this is not a once-off report. Bitbuy has agreed with CipherBlade to conduct these security checks and audits on an ongoing basis.
It is great to see an exchange engage in such transparency and the ecosystem would do well if more exchanges followed suit.
First 1:1 Insured Bitcoin Platform
In May 2020 Bitbuy partnered with Knox to offer fully-insured cold storage of Bitcoin holdings for all Bitbuy users. Bitbuy was the very first Canadian exchange to offer such cold storage and insurance to their clients, marking a significant positive development for the Canadian cryptocurrency industry.
The move was made by Bitbuy as part of their commitment to best practices in the cryptocurrency exchange industry while awaiting greater regulatory clarity in Canada.
The insurance policy from Knox covers both theft and loss of customers Bitcoin holdings up to the full value of the holdings in cold storage, subject to the full policy terms, conditions, and exclusions.
Supported Coins
Currently, Bitbuy supports seven cryptoassets. You can buy Bitcoin, Bitcoin Cash, Litecoin, Ethereum, EOS, Stellar Lumens and Ripple.
Therefore, Bitbuy has not ventured into the territory of a number of other altcoins that are being offered by Canadian exchanges. However, given that EOS and Stellar Lumens are relatively recent additions, it does show that they are willing to add further coin support. Hopefully we can see another altcoin in their offering soon. They have promised AAVE and LINK are coming soon, so it does look like the number of choices is improving.