Since the crypto market is heating up, I have decided to do a review of Binance Singapore and Coinhako. If you are thinking to buy some bitcoins, these are the two most popular exchange to look at in Singapore. I used to start out with Coinbase in 2017, but ever since they run into some issues with the Xfers thing, I stopped using it altogether. What is this Xfers?
Xfers is sort of like an intermediary between banks and crypto exchanges. You have to first transfer money from your local banks to Xfers, then link up your Xfers account to the crypto exchanges. That is how you buy crypto in most cases. Binance Singapore and Coinhako are doing that right now.
So which exchange is better? I have split this review up into five categories. The history of business, variety of offerings, regulations & security, costs & fees and lastly process of buying and selling. This would give you a better understanding of how Binance Singapore and Coinhako works.
1. History of Binance Singapore and Coinhako
Coinhako was founded in 2014 and they became an alternative exchange to Coinbase during the 2017 crypto boom. However back then, Coinbase was the leading exchange (It still is now) and most Singaporean investors chose Coinbase over Coinhako. Coinhako is relatively unknown still.
Coinhako business only started picking up when Coinbase announced that they would stop their Xfers service in Singapore. That means you can’t buy bitcoin on Coinbase through Xfers anymore. You can only do that by using debit/credit card. And their fees are crazy high (4%). If you want to buy $500 worth of bitcoins you have to pay $20 in transaction fees.
So people naturally hopped over from Coinbase to Coinhako. Because crypto is still relatively new, there aren’t much fiat-to-crypto gateway exchanges out there yet.
Binance was founded in 2017, right at the period of the crypto boom. They started off serving the China, Korean and Japan market initially. Everything was fine until China and Korea government came down hard and furious to ban cryptocurrencies. The crackdown is really tough. They raided all crypto exchanges and many businesses got shut down. The entire crypto market tanked and that was the trigger of the long bear market.
Binance as a business has been performing exceptionally well. They grew really, really fast and they are now one of the largest exchange in the world with the highest traded volume. That is important for an exchange business as volume and liquidity are what investors and traders look out for.
While Binance has been around since 2017, Binance Singapore came into business only around April 2019. It is interesting to note that Binance Singapore is owned by Temasek’s venture capital arm, Vertex Venture. Coinhako is backed by Tim Draper, one of the big VCs who have also invested in Baidu, Skype and Coinbase.
In terms of branding, I would say Binance is much bigger than Coinhako. They are the big boys in the crypto community and they serve an international market. Coinhako, on the other hand, is only well-known in Singapore and probably some other parts in Asia.
However, if you are comparing Binance Singapore and Coinhako, then Coinhako has been in the business longer than Binance Singapore. Its website has more features and functions and is probably more well-established than Binance Singapore. I prefer Coinhako’s customer support service and they have a lot more stuff like reward points, mobile apps and etc. Binance Singapore is still fairly new and they are still pretty much in the early phase of development.
2. Availability of Altcoins
Coinhako has 34 coins that are listed on their exchange and Binance Singapore only has 8 coins.
Because I am using the Brave Browser and I earn Basic Attention Tokens (BAT) for viewing ads, I am looking for an exchange that allows the buying and selling of BAT. Coinhako has it and Binance Singapore doesn’t have it. Do download the latest brave browser and check up the article I have written. Highly recommended!
This is important for me as you want to be able to sell your BAT to cash. The old method would be to sell your BAT into BTC, then sell your BTC to cash. However, with Coinhako, I can directly sell BAT into cash and withdraw out the profits to my bank account. This saves a lot of spread costs and transfer fees in between.
I also have some OmiseGO coins and Coinhako has it but Binance Singapore doesn’t. It all really depends on individuals and which altcoins you hold. If you are holding other coins like Binance Coin (BNB) and Chainlink, then Binance Singapore offers that. Each exchange stores different coins but generally Coinhako has a wider variety of offerings.
If you are just looking only at bitcoin or ethereum, then it doesn’t matter. Both exchanges have it.
Adding on to that, Coinhako also has a token swap feature that Binance Singapore don’t. This is very useful if you are looking to rebalance your crypto portfolio.
For example, if you want to swap OmiseGO to BTC, or Ethereum to Litecoin, you can do that on Coinhako’s platform directly. It allows altcoin to altcoin swap, altcoin to bitcoin or bitcoin to altcoin. All works fine.
More of such swapping services are coming up in the crypto space. Initially, Kyber used to be doing this but now is getting more common. Recently I just used coin switch (Swap NEO to ICX) and they worked seamlessly. Nevertheless, it is better that you swap the coins directly on the exchange platform rather than going through a 3rd party.
3. Regulations & Security
Generally, both Binance Singapore and Coinhako are trusted and secure. I have been using Coinhako for a couple of years and there are no security issues so far.
In Singapore, they recently enacted a new law called the Payment Services Act in 2020. Singapore classifies all these crypto coins as digital payment tokens. Both Coinhako and Binance Singapore has already applied for it and both exchanges work very closely with the local regulators.
Both Binance and Coinhako has been hacked before. In 2019, hackers have managed to hack into Binance and withdraw 7,000 bitcoins which is worth $40 million at that point. That is how the meme “Your Funds are SAFU” came about from CZ’s tweet. This was big news in the crypto space as Binance was thought to have strong security.
Note that this is Binance and not Binance Singapore. Binance Singapore is fairly new and so far no hacking incidents have been reported yet.
Coinhako’s hack was quite recent in Feb 2020. It suffered a sophisticated and coordinated attack but the damage was minimal as less than 20 users were affected.
Ever since Coinhako has asked all users to reset our passwords and enable two-factor authentication to enhance its security. This hack is much smaller in scale as compared to Binance. But security was still compromised.
In both cases, users were all refunded. It was not like the classic Mt. Gox in 2014 where everyone lost thousands of bitcoins. Now exchanges have reserves from their profits to deal with such issues.
The general rule of thumb in crypto is “Not your keys, not your bitcoin”. No exchange is 100% fool-proof. If your crypto is in the exchange, they are not yours. You are just trusting that exchange to store your coins for you and it is sort of like the bank’s IOU. The amount you see just means the exchange owns you that amount of tokens you hold.
These are called “hot wallets” as they exist on the internet and are more susceptible to hackers or technical vulnerabilities on the exchange. The best practice is to store it in a “cold wallet” (offline) or buy a hardware wallet and store your coins there.
For more information on how to keep your crypto funds safely, do check out my article here. I recently bought a Ledger Nano S during the bitcoin halving promotion. The security cost is definitely worthwhile.
4. Costs & Fees
I did a comparison of how much bitcoin you would get if you spend $500.
You can see that the fees on Binance are slightly cheaper than Coinhako. Binance Singapore charges a 0.6% fee in contrast to Coinhako which charges a 0.8% fee.
On Binance Singapore, I can get 0.03972 bitcoin with $500. On Coinhako, I can get 0.03954 with $500. The difference, taking into account fees and rates, is only about $2.25. I would say the rates for Binance Singapore are better, but only to a slight extent.
This is quite common for new entrants as they have to compete for market share by offering more competitive rates. One good example is Gojek vs Grab. Binance Singapore used to offer super attractive referral rates of $20, but they have stopped now already.
5. Process of Buying Bitcoin
For the purpose of this article, I did a test to buy $100 worth of bitcoin through Binance Singapore.
First, I log in to my Xfers and click the top-up button for digital goods wallet. Take note you have to top up to your digital goods wallet if you want to buy crypto. The general wallet is for general retail transactions with merchants.
Then, it gave me the bank account details for me to transfer the $100. After I transfer this message pops up saying that the funds will be reflected in Xfers within 5 minutes. After 1 minute, I received it on Xfers.
Once your money is in Xfers, you are ready to buy bitcoins. But before that, you must first link up your Xfers account to the crypto exchange be it Coinhako or Binance Singapore.
Done. Pretty simple. Now let’s try on Coinhako. I sold my bitcoins on Binance Singapore immediately and buy them again on Coinhako to test out if there are any differences. This is what pops up next.
That is the downside if you are using Xfers on Coinhako. The minimum purchase to buy through Xfers is $550. Hence, I usually don’t buy using Xfers. I buy through the normal Coinhako wallet. What is the difference between this normal Coinhako wallet and Xfers?
In Coinhako, there are 2 types of wallet. The SGD Coinhako wallet (option 1) and the Xfers (option 2). I have been using option 1 all along because it is more convenient. The minimum purchase for option 1 is also lower at $30. That means you can just buy $50 worth of bitcoins if you want.
What I really like most about Coinhako is that this option 1 offers direct deposit and withdrawals to local banks. This means I can just transfer money from DBS to Coinhako. Or I can sell my bitcoin and withdraw out the profits directly to my DBS bank account. There is no need to create a new Xfers account and do all the KYC stuff.
However, the disadvantage for option 1 is the top-up only happens at 10 am and 4 pm on weekdays. If you make a deposit request during weekends, then you have to wait till Monday before receiving the funds.
Generally, both work fine. The main difference in the process is Binance Singapore involves an extra step of setting up Xfers. Coinhako allows you the option of transferring directly from your bank account to their SGD wallet. That’s about it.
Personally, I prefer to use Coinhako. It has more variety of altcoins, especially the ones I am holding (BAT & OMG). And also there is no need for me to manage a separate Xfers. I can just buy and sell crypto directly using local bank transfer.
Coinhako is able to consolidate all my crypto investments into one place, one account. And the user experience has been pretty decent so far. If you want to get started on Coinhako, do sign up here. For a more detailed explanation on the walk-through of using Coinhako, you can read up about the previous article which I wrote.
So why bitcoin?
Here is what happened to Lebanon’s fiat currency recently. Protestors attacked central banks and their currency just lost 50-70% of its value. It is a timely reminder that no fiat currencies can maintain its value in history.
Even Warren Buffet said it during today’s AGM, the US government won’t default on its debts, but the purchasing power of the dollar is in doubt with the printing of money. Ray Dalio also mentioned in his latest article “The Changing World Order”, in the end, central banks always print money and devalue.
In contrast with unlimited QE, bitcoin is going to cut its supply. The bitcoin halving event, which happens every 210,000 blocks (4 years) is coming in 9 days. After this halving, it would take miners even longer to mine bitcoin and the rewards are going to be reduced from 12.5 to 6.25.
This means the supply of bitcoin is going to become even more scarce and the history of halving events have all pointed to a bull run. Imagine what would happen to the price of gold if the supply of gold mine in the world got cut by 50%. It is the same analogy with bitcoin.
While the fundamentals and macroeconomics of bitcoin are bullish, the technical charts of bitcoin are facing key resistance around the 9k area. Bitcoin has rallied over the past few days already, so we might see a retracement. Remember to do your own research and make your own call. Anything can happen in the crypto world. It can burst upwards or dump downwards, but in the long run, it is still an attractive investment.
Hopefully, this review of Binance Singapore and Coinhako helps you to get started in your crypto journey. The upside potential in the crypto industry is huge. Don’t miss out on it!
*2021 Update: Do check out this new YouTube Video on the comparison of crypto platforms in Singapore as well as a tutorial guide on how to get started.