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Choosing a platform

Would I use Coinhako as a Singapore crypto investor?

27 Aug 2022

Coinhako is one of the most popular cryptocurrency exchanges in Singapore. We take a look at how safe and reliable the platform is, and if you should be using it.

Coinhako review

TL;DR

  • Coinhako is one of the most established and popular cryptocurrency exchanges, with over 300,000 registered users in Singapore. 
  • It was the first to receive in-principle approval from the Monetary Authority of Singapore for a digital payment token (DPT) service license.
  • We like its clean and intuitive user interface, making it easy for beginners to get started. It is also simple to transfer funds into the platform. 
  • However, experienced investors and traders may find limitations on the range of cryptocurrencies and functions offered. It also has higher fees compared to other exchanges. 

Coinhako review – An introduction to Coinhako

If you are into crypto investing, you would probably have heard of Coinhako. It was also the first crypto exchange that I was introduced to when I bought my first Bitcoin.

Coinhako is a popular Singapore cryptocurrency exchange that started in 2014, back when there was much less attention paid to Bitcoin or cryptocurrency. 

In other words, this would be the period when bringing up Bitcoin in a conversation would likely earn you puzzled looks.

According to the company, it currently has over 300,000 registered users in Singapore with an average of 150,000 monthly active users. 

What we find interesting is that Coinhako received in-principle approval from the Monetary Authority of Singapore for a digital payment token (DPT) service license just last year. 

This essentially made it the leading Singaporean native exchange in the race for the fabled license. 

As of 6th May 2022, Coinhako has officially been licensed under the Payment Services Act to offer DPT services.

You might then be wondering, what exactly are the key features of Coinhako? These include:

  • Allowing users to deposit SGD from their banks directly onto the exchange and withdraw SGD from the exchange to their banks.
  • Allowing purchases using credit cards and Grabpay, with additional processing fees
  • Directly swapping one cryptocurrency to another (eg. exchange BTC for ETH)
  • Staking cryptocurrencies to earn interest through their ‘Coinhako Earn’
  • Available on desktop and mobile app (iOS and Android)
  • Curate news from various crypto news platforms 
  • Ability to set price alerts
Source: Coinhako

Coinhako review – What are its fees?

Now I know what you’re thinking, a review wouldn’t be complete without looking at one of the more important things we retail investors care about—fees.

Deposit of SGD via Fast TransfersFree
Deposit of SGD via Xfers Direct0.55% (max SGD 20,000 per transaction)
Withdrawal of SGDSGD 2 per transaction
Buying/Selling of Crypto1% default/ 0.75% (after coupon*)
Swapping of Crypto-to-Crypto1% default/ 0.75% (after coupon*)
Withdrawal of CryptoDependent on respective crypto and their network fees
Eg. BTC = 0.0005 BTC / ETH = 0.008 ETH

Source: Coinhako

In this case, Coinhako is one of the more expensive exchanges to trade on, with a 1% fee per transaction.

There is also a huge spread between the buy and sell prices offered as compared to other crypto exchanges (~0.3%). Yikes!

Lastly, there is a high forex spread of about 0.35% between the SGD and USD.

But what exactly does this mean?

Basically, all of these fees make it unsuitable for traders who do multiple small short-term transactions, as their profits will be eroded quite quickly.

The withdrawal of SGD is very reasonable, considering it is a flat SGD 2 per withdrawal, regardless of the amount. It is one of the only few local exchanges that offer direct cash withdrawal to banks, hence making it very convenient to use.

The withdrawal of crypto is not as competitive as other exchanges, such as FTX or Gemini (which offers 10 free withdrawals per month). Some crypto can also be costly to withdraw, depending on the network fees.

Pro tip: Login to Coinhako everyday to earn points, which you can redeem coupons for trading fees discount (25% off) or exchange for free cryptocurrencies (DOGE, MATIC, etc)

Source: Coinhako

Coinhako review: What are the cryptocurrencies available?

As of March 2022, Coinhako offers around 60 different types of crypto on its platform.

It’s a modest number to be sure, but one that provides more than enough options to beginners who are new to cryptocurrency investing.

Typically, the first few cryptos that a beginner will buy are the ‘large caps’, usually with a market capitalization of >USD 10 billion. For the uninitiated, you can refer to Coingecko for the market capitalization information.

However, please be mindful if you are intending to transfer the crypto out from Coinhako to another platform or wallet!

The vast majority of the cryptocurrencies are ‘trade-only’, meaning that you will not be able to transfer out or transfer in. Put differently, your trades will be limited to the Coinhako platform.

Of course, this doesn’t mean you can’t send or receive cryptocurrencies at all on Coinhako. Certain cryptocurrencies such as Litecoin and Zilliqa, for example, have transfers enabled.

Pro tip: Always check if the cryptocurrency that you intend to buy in Coinhako is supported for transferring out to other platforms. The ‘send’ button should not be greyed out.

Source: Coinhako

Coinhako review: Is it easy to use?

We would say that Coinhako has a very clean and intuitive UI, making it very easy to use for beginners.

Once you have SGD/USD available on the platform, it becomes a straightforward process to buy and sell crypto.

That being said, it differs from the other exchanges in various ways:

  • Users are buying from Coinhako directly, not another market participant (own liquidity pool)
  • There is only a ‘Market Order’ option available (buy and sell at the current market price)
  • No ‘Limit Order’ nor ‘Stop Loss’ options (cannot buy and sell at predefined prices)
  • Price will be fixed for 15 seconds upon entering the amount to buy/sell

Naturally, this is less than ideal for users looking for more advanced trading features (stop loss/take profit at a certain price).

Imagine being able to sleep soundly at night knowing that your position will be protected if a certain cryptocurrency falls by more than 20%…

But it is nonetheless extremely easy for beginners to buy and sell since there are no complicated steps to set before making a transaction.

Pro Tip: Enable biometric authentication for easier and quicker confirmation of the transaction on the mobile phone.

Source: Coinhako

Coinhako review: Is it safe and secure?

Coinhako stores most of the crypto assets on cold wallets, which is a type of wallet that is not connected to the internet and thus is less susceptible to being compromised. A popular hardware wallet is the Ledger.

What does this mean?

This means that they are less susceptible to being hacked, except those the liquidity pools that are meant for daily transactions, which will be stored on hot wallets.

A hot wallet is a type of wallet that is connected to the internet and enables sending, receiving, trading and storing of crypto.

It is more susceptible to security attacks as it is always online, compared to a cold wallet.

You may have heard of popular hot wallets such as Metamask, which is widely used as a plugin for web browsers like Google Chrome.

Now this means that your crypto assets are stored in the wallet itself, or as some might describe it, keeping money in a Google Chrome extension.

This opens up another possibility of being compromised.

For this reason, Metamask has implemented several good security practices, including a ‘Real-time password scanning’, address whitelisting, usage of two-factor authentication and IP whitelisting.

There was one such cyber attack back in February 2020, where several users lost their funds in their wallets, but they had been promptly reimbursed.

You might be wondering, what happens when there’s a hack… do you get your money back?

Well, if an exchange gets hacked, they may choose to reimburse their users in order to retain their trust.

However, if your phone/email/password has been hacked, there is still a possibility of losing your funds inside Coinhako.

For this reason, you should practice basic cybersecurity measures to safeguard yourself.

For example, upon purchasing any cryptocurrency, you should consider transferring them out and storing them in a cold wallet (eg. Ledger) for peace of mind.

Coinhako review: Should I use Coinhako Earn?

Now let’s take a look at a popular feature in the world of cryptocurrency and decentralised finance—staking.

DeFi, or Decentralized Finance, is a broad term that encompasses financial services provided using blockchain technology, thereby eliminating intermediaries and presenting a radical shift away from Traditional Finance.

Coinhako recently introduced its own platform staking feature, which allows users to lock in their assets to earn interest.

This presents a very convenient option, particularly for long-term investors, who are looking to buy and hold crypto for an extended period of time.

Instead of letting the crypto sit idle, they can actually earn interest for you. Think of it as keeping your cash in a bank account, where the bank pays you interest for holding the cash in your account.

BTC earns ~2.45% per annum on Coinhako and has a short lock-in period of 7 days (you need to redeem and re-enrol again to earn interest).

This goes without saying but please note that DeFi can be risky and comes with its own security issues too! 

Pro tip: Check if your crypto assets are being offered in Coinhako Earn!

Source: Coinhako

Coinhako review: Should I use Coinhako?

If you’re just starting out to invest in cryptocurrency, we think Coinhako’s clean and intuitive user interface would make it easy for you to get started. It is also simple to transfer funds into and out of the platform. 

If you’re an experienced investor or trader, Coinhako may not be able to fulfil what you are looking for. 

This is due to its relatively high trading fees compared to other exchanges, as well as the limited range of cryptocurrencies and advanced functions supported.  

Keen to find out how Coinhako compare to the other crypto exchanges in Singapore? Check out our article reviewing the best crypto exchange here.

Disclaimer – We are not sponsored by or affiliated with any of the companies mentioned in this article. Information is accurate as of 25th April 2022.