CEX.IO is a solid cryptocurrency platform. But watch out for its high fees when buying and selling bitcoin.
If you’re looking into using bitcoin to send money to someone, you will need a cryptocurrency platform.
CEX.IO might be on your list of candidates — it’s a London-based exchange founded in 2013 that lets you buy, sell and trade cryptocurrencies. In a sea of competitors, CEX.IO’s claim to fame is that it allows withdrawals to credit cards.
The question, of course, is whether CEX.IO is a good choice for buying cryptocurrency. Let’s find out.
|Product Name||CEX.IO Cryptocurrency Exchange|
|Fiat Currencies||USD, EUR, RUB, GBP|
|Cryptocurrencies||BTC, BTG, BCH, LTC, DASH, ETH, XRP, ZEC, XLM, GUSD|
Bank transfer (SEPA)
Instant buy: 7%
VISA & Mastercard: 3.5% + $0.25 USD, 3.5% + £0.20 GBP, 3.5% + 3.5% + €0.24 EUR, 5% + ₽ 15.57 RUB
Bank transfer: None
Crypto Capital: None
- No commission for bank deposits and competitive fees for withdrawals
- Exchange rates typically within 0.5% to 2% of mid-market rate
- High maximum transfers with verified account
- Supports US dollars, euros and rubles only
- Bitcoin-based money transfers can be complicated
- High fees for buying and selling Bitcoin
- Bank withdrawals can be expensive
How are CEX.IO’s exchange rates?
Exchange rates on CEX.IO are based on the platform’s market activity. Traders on CEX.IO buy and sell bitcoin; at the same time, the exchange rate will fluctuate.
Though the exchange rate can change, you’ll typically find that it’s within 0.5% to 2% of the mid-market rate.
What is the mid-market rate?
The mid-market rate is what your money’s actually worth on the global market compared to another currency. It’s the midpoint between worldwide supply and demand for that currency — and the rate banks and transfer services use when they trade among themselves.
Use the mid-market rate as a baseline to compare against the rates provided by your bank or transfer service. With it, you’ll discover which companies offer the best rates.
Overall, CEX.IO’s exchange rate is reasonable compared with other bitcoin exchanges. It’s more important to look at CEX.IO’s fees for buying and selling bitcoin, which are quite high.
How much will I pay to send money with CEX.IO?
You first need to deposit fiat currency — government-issued money like Australian dollars or euros — onto CEX.IO. Here is what you’ll pay to buy bitcoin.
|Credit card||3.5% + $0.25|
|Bank transfer||No commission|
|Crypto Capital (for bitcoin)||No commission|
Next, you need to purchase bitcoin. Buying bitcoin comes with a 7% transaction fee, and you may lose a bit of value on your fiat currency from the exchange rate.
Sending the bitcoin to your recipient
Next, you’ll transfer the bitcoin to your recipient. To do that, you can use CEX.IO’s voucher system at no cost.
Selling the bitcoin
When your recipient sells the bitcoin, they’ll be charged a 7% transaction fee. They may also lose a bit of value on their bitcoin from the exchange rate.
Withdrawing the fiat currency
Now that your recipient has sold the bitcoin for fiat currency, they need to get the money from CEX.IO.
Here are the fees for fiat currency withdrawals.
|Mastercard||1.2% + US$3.80|
How do I send money through CEX.IO?
A bitcoin-based money transfer involves a series of steps.
- You use fiat currency to buy bitcoin.
- You send the bitcoin to your recipient’s bitcoin address.
- Your recipient sells the bitcoin for fiat currency.
- Your recipient withdraws the fiat currency to their bank account or credit card.
Here’s a hypothetical money transfer through CEX.IO for sending $1,000 to someone in Germany. According to the mid-market rate at the time of this writing, US$1,000 is worth about 0.78 BTC.
$1,000 to Germany
Step Result Deposit US$1,000 onto CEX.IO via bank transfer US$1,000 in funds on CEX.IO Buy US$1,000 in bitcoin Receive 0.72 BTC Send the bitcoin to your recipient via voucher No fee; your recipient receives 0.72 BTC Your recipient sells the bitcoin for euros Your recipient receives 810 euros Your recipient withdraws the euros from CEX.IO to a Visa credit card Your recipient pays approximately 4 euros in withdrawal fees, ending up with 806 euros
According to the mid-market rate at the time of this writing, US$1,000 is worth about 0.78 BTC.
Case study analysis
- In the case study, your US$1,000 buys you 0.72 BTC. That means you lose 0.06 BTC — about US$76 — from the purchase. Most of the loss comes from CEX.IO’s 7% transaction fee.
- According to the mid-market rate, 0.72 BTC is worth about 868 euros. But when your recipient sells the bitcoin, they receive 810 euros. Again, most of the loss comes from the transaction fee.
- After all is said and done, your recipient is left with 806 euros, which is about US$853. Throughout the complete money transfer, you’ve lost almost US$150.
Minimum transfer amounts and available countries
When buying bitcoin on CEX.IO, you need to purchase a minimum of 0.01 BTC with a maximum of 10 BTC. The limits are the same for selling bitcoin.
You can withdraw an unlimited amount in bitcoin — this means you can send as many bitcoin to your recipient as you’d like. The minimum transfer amount is 0.01 BTC.
For fiat currencies, there are different deposit and withdrawal limits depending on which type of account you have:
- Basic account. Maximum of US$500 daily and US$2,000 monthly
- Verified account. Maximum of US$10,000 daily and US$100,000 monthly
- Verified Plus and Corporate accounts. No limit
Because of these rules, the amount you can send to your recipient will be limited by the type of account you have.
CEX.IO is technically available to all countries. However, in some countries (for instance, Afghanistan, Iraq and Vietnam), credit card and bank-based transfers to the platform are restricted. This effectively bars many people from using CEX.IO.
What types of transfers does CEX.IO support?
- Bank transfers
- Credit card
- Crypto Capital
- Vouchers (for bitcoin transfers)
- Withdrawals to personal bitcoin wallets
What to look out for
- Bitcoin transfers can be complicated. Typical money transfer services handle all of the steps to send money. However, when you transfer money through bitcoin, you need to perform all the steps yourself.
- Losing money on the exchange rate. When transferring through bitcoin, you’ll lose money twice on the exchange rate.
- High buy and sell fees. CEX.IO charges a 7% transaction fee when you buy bitcoin. It also charges the same fee when you sell bitcoin.
- Opaque support centre. It may be difficult to find the answer you need in CEX.IO’s help centre because the search function often returns irrelevant results.
Benefits and drawbacks
|Global services||Open to all countries (subject to government regulations)||Credit card and bank-based transfers are not available in some countries|
|Transfer options||US dollars, euros, Russian roubles||Many currencies not supported|
|Pickup options||Bank transfer, credit card, Crypto Capital||No cash pickup|
|Competitive fees||No commission for bank deposits; reasonable fees for withdrawals||High fees for buying and selling bitcoin|
|Competitive exchange rates||Exchange rates based on market activity — often within 0.5% to 2% of the mid-market rate||Exchange rates may spike moment to moment|
|Minimum and maximum transfer amounts||High maximum transfer amount with verified account||Low maximum transfer amount with basic account|
|Convenient||Online-based platform||You need to complete all transfer steps yourself|
|Customer service options||Online ticket, email support||No phone support; help centre can be confusing|
To get started with CEX.IO, register for an account at the platform’s website. Consider using two-factor authentication with your account, which provides extra security.
After you’ve registered an account and confirmed your email, you can start your bitcoin transfer. Add a payment source and deposit fiat currency, then purchase your bitcoin.
CEX.IO is a solid bitcoin platform that can help you complete an entire money transfer. However, be careful of the fees you’ll pay when buying and selling bitcoin.
Frequently asked questions
Image source: CEX.IO