Bybit Review: Cryptocurrency Derivatives Trading Platform

Bybit is an emerging Peer to Peer (P2P) cryptocurrency derivatives exchange that is looking to establish itself in the growing crypto margin/leverage trading sector. Despite only being founded in March 2018, Bybit is proving to be popular with the cryptocurrency trading community and is onboarding customers at an impressive rate.

The exchange allows traders around the world to engage in leveraged margin trading in a select range of crypto products, and digital assets such as BTC, ETH, EOS, and XRP can be traded using up to 100x leverage.

With its headquarters in Singapore, Bybit operates as a strictly crypto to crypto exchange, doesn’t require its users to perform stringent KYC verification, and currently generates close to $1B worth of daily trading.

Bybit also incorporates cutting edge tech, solid security protocols, and a dedicated customer support service that is aimed at helping the exchange rival the market’s leading derivatives trading service providers.

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Who is Behind ByBit?

Bybit was founded in March 2018 by Ben Zhou, and he previously established himself in the world of Fintech by working as XM’s China District General Manager for seven years.

XM is a leading provider of brokering services and Bybit’s core team come from investment banking, and the Forex industry, as well as being early blockchain adopters.

The exchange is registered in the British Virgin Islands, and has its headquarters in Singapore alongside supplementary offices in Hong Kong and Taiwan.

While Bybit goes by the official company name of Bybit Fintech Limited its registration number and incorporation details are not currently publically available, however, the team maintain a central address at  6 Shenton Way, #12-11/11A, Singapore, Singapore 068809, SG.

The team also provide the details of their publicly available LinkedIn page and in addition to Ben Zhou prominent members include Latica Qiu who also has experience of working for XM, while the tech team includes individuals with experience of working at leading companies such as Morgan Stanley, Tencent, Ping’an Bank, and Nuoya Fortune.

There are approximately 50 Bybit employees with public profiles on LinkedIn and anyone can go through the team profiles to get a better understanding of the people behind the exchange.

Bybit’s Main Features

As a P2P crypto to crypto derivatives trading platform, Bybit allows traders from various countries to participate in trading using up to 100x leverage.

Traders from a wide variety of countries (excluding the US) are catered for and Bybit incorporates a number of key features in order to provide its users with an efficient and responsive crypto trading experience.

These include a customer support service that includes a live chat function, and a Grey release feature which ensures that platform maintenance is conducted “on the go” which results in minimum downtime, and maintains around the clock access to live trading.

The P2P service also makes use of a pricing mechanism aimed to ensure a fair and transparent trading environment, and Bybit also integrates with TradingView, provides comprehensive API tools, and can be accessed via fully functional IOS and Android mobile apps.

Other key features include:

• 1 Click Coin Swaps – Users can easily swap between supported cryptocurrencies from within their accounts
• 100,000 TPS per contract – Which is 10x the industry average and results in no overloads
• Up to 100x leverage – Bybit’s generous leverage system allows for increased profit potential
• Cold Wallet Storage/Manual Withdrawals – Bybit employs cold storage and conducts three daily manual withdrawals to strengthen security
• Unlimited Withdrawals – Users of the platform are allowed to make virtually unlimited trades and withdrawals
• No KYC– Accounts can be opened and maintained with just an email address and username

ByBit currently specialises in leveraged trading and perpetual contracts, and allows traders to take up both long and short positions in a select number of cryptocurrencies.

Contracts have no set expiry date at which they will be automatically settled, and most importantly, it’s key to remember that as a derivatives trading platform, there are no physical transfers of Bitcoin taking place between buyers and sellers on ByBit.

Contracts are settled in each underlying asset, with prices/quantities quoted in a range of leading fiat currencies.

Bybit Account Types and Limits

Bybit users all gain access to the same range of features after opening accounts and can trade in perpetual crypto derivative contracts in Bitcoin, Ethereum, EOS, and Ripple in relation to USD.

All users conduct trades by entering into an agreement with the seller for the future price of a given asset in a P2P fashion.

Bybit supports the following leveraged trading pairs:

• BTC/USD: 1:100
• ETH/USD: 1:50
• EOS/USD: 1:50
• XRP/USD: 1:50

As a purely crypto to crypto exchange, Bybit is one of the easier platforms to get started with and you can create an account using only an email address.

There is an option to register with a mobile number and this requires you to fill in your country, and phone number, as well your password.

How to Open an Account on Bybit

You can get started by clicking on the “Register” tab at the top right of the page. From here you can select either Email or Mobile Registration and enter the necessary details.

When choosing to register with an email address, you will be sent a unique verification code number which will allow you to gain access to your new account.

Currently anyone signing up can earn a bonus of $5 for making a first deposit of ≥0.05BTC while a first deposit of 0.5BTC or more earns a $50 bonus.

From here you can navigate to your “Account & Security” settings in order to set up your account username in addition to two factor authentication (2FA).

When you have finished configuring your account settings you can begin to deposit one of the supported currencies by clicking on “Assets/My Assets”.

You already have full access to the platform and can begin to trade once you have deposited funds and converted them into the asset that you would like to trade.

Bybit Trading Arena

When we tested the trading arena out for ourselves, our initial impression was that the layout is extremely clean. The platform utilizes a dark background in a somewhat minimalistic look, with each segment of the trading screen organized clearly and neatly.

This includes the main chart area that displays green and pink candles, with the order book and recent trade segments listed just to the right. On the very right hand hand side you have the ability to set your trading parameters, which you can do across limit, market, and conditional orders.

Before your trade is executed, Bybit presents a full breakdown of your order. This is especially useful considering the complexities associated with derivative contracts.

In terms of chart analysis, Bybit allows you to fully customized your trading screen. Chart candle movements can be adjusted between 1, 3, 5, and 10 minutes, all the way up to 1 month.

You can also make changes to the scale of the chart. For example, you can include metrics such as left and right axis, percentages, indicator labels, and log scales. You can also customize the layout of the chart, including the colours and your preferred time zone.

All-in-all, while the trading arena offers a user-friendly platform to trade derivatives, Bybit have ensured that it is suitable for both novice and highly experienced traders.

So now that we’ve covered the main trading screen, in the next part of our Bybit review we are going to look at deposits and withdrawals.

Supported Currencies

Bybit currently only accepts a limited number of digital currencies including BTC, ETH, EOS, XRP, and USDT. Each currency can be both deposited and withdrawn but Bybit does not support any fiat currencies at this time.

However, funds are able to be displayed in the following currencies:

• GBP
• EUR
• USD
• AUD
• CAD
• CNY
• CHF
• HKD
• JPY
• KRW

Deposits/Withdrawals

There are no minimum deposit requirements; however, Bybit does enforce the following minimum withdrawal amounts.

Bybit processes withdrawals manually three times a day at 0800, 1600, and 2400 (UTC), and the cut-off time for withdrawals is 30 minutes before the scheduled withdrawal processing time. All withdrawals are credited to your wallet 1 to 2 hours after a review.

ByBit Fees and Charges

Bybit does not charge any deposit or withdrawal fees, although a miner’s fee applies to all transfers. You can adjust fees when making a deposit, however, with withdrawals; the following fixed miners’ fees are applied regardless of the withdrawal amount.

Every executed order on Bybit incurs a trading fee which is deducted from the account balance, although it does not affect the initial margin of the order. Furthermore, market makers who provide liquidity and increase the market depth of order book receive an incentive in the form of a negative trading fee, while market takers who do the opposite are charged a positive trading fee.

Trading Fee = Position Value x Trading Fee Rate

If for example, Trader A buys 10,000 BTC/USD contracts via market order and Trader B sells 10,000 BTC/USD contracts using limit order, if the execution price is 8,000 USD, then the following is true:

Taker fee for Trader A = 10,000/8,000 x 0.075% = 0.0009375 BTC
Maker rebate for Trader B = 10,000/8,000 x -0.025% = -0.0003125 BTC

Therefore, upon execution, Trader A will pay 0.0009375 BTC of the Taker fee and Trader B will receive 0.0003125 BTC of the Maker rebate.

Funding Fee

A position funding fee is also applied on the platform which is exchanged between the long positions and the short positions. The funding fee works to ensure that exchange prices stay anchored to the global spot price, and funding is exchanged directly between buyers and sellers every 8 hours.

A positive funding rate sees long positions pay short positions and when it becomes negative, the short position holders pay the long position holders. You are not charged when you close your position before the funding interval.

The funding fee is calculated as follows: funding fee = position value*funding rate. Position value = quantity of contract/mark price. If, for example, at 8:00 UTC you hold a long position of 10,000 BTC/USD contracts, and the mark price is 4,000 USD. Supposing that the funding rate is 0.02%, the position value will be 10,000/4,000=2.5 BTC, and the the funding fee is 2.5 BTC *0.02%=0.0005BTC.

Bybit Order Types

Bybit incorporates a number of order types including standard market orders which allow you to process trades as soon as you hit the button at the going market rate. Limit orders allow you select the price at which you want your order to execute at and give you more flexibility. You can “Buy /Long” or “Sell/Short” using either order type on Bybit.

Conditional Orders

Conditional orders are fulfilled once a pre-specified event occurs, which can include reaching a particular price level, and when configuring a conditional order, Bybit provides the following additional order options.

• Post-Only- You will only pay a maker fee here as even if your limit price takes liquidity from the books, it will still be processed as a maker order.
• Close On Trigger – This option ensures that your stop loss reduces your position regardless of any other open orders.

• GoodTillCancelled –Results in your order remaining open until it gets filled or you cancel it.
• ImmediateOrCancel – This option allows your order to go through immediately, and if not, get cancelled automatically.
• FillOrKill – Your order will be cancelled if it is not filled with one trade.

The conditional orders can all be set up from the Conditional Orders tab and selecting from the options at the bottom if the box.

Bybit Leverage

If you have a slightly higher appetite for risk, then you’ll be pleased to know that the Bybit platform supports leverage trading. The amount of leverage on offer will depend on the derivative contract you plan to trade.

For example, if trading BTC/USD or ETH/USD, then you’ll be permitted to trade at up to 100x. On the other hand, EOS/USD and XRP/USD is capped at 25x, albeit, this is still a considerable amount of leverage to be trading with. As such, make sure that you have a firm grasp of how leverage works before you use it, as the reality is – you could lose your entire balance.

Moreover, Bybit has also installed risk limit levels on each of its four derivative contracts. However, this shouldn’t really have an impact on you unless you are an institutional grade investor, as you can trade up to 100 BTC or 300 ETH at the 100x level before your limits are reduced.

In terms of financing costs, this is charged on two main fronts. Notably, this includes the interest rate and any respective premium/discount factors. Funding takes place every eight hours.

Supported Countries

Bybit currently accepts users from the following countries:

• United Kingdom
• Germany
• France
• Australia
• Canada
• Italy
• Spain
• Brazil
• China
• Japan
• India
• Portugal
• Norway
• Sweden
• Netherlands
• Austria
• Switzerland
• Peru
• Argentina
• Ukraine
• Ireland
• Romania
• Poland
• Belgium

At this moment in time, the platform is not available to inhabitants of the following locations:

• United States of America
• Québec
• Singapore
• Cuba
• Crimea
• Sevastopol
• Iran
• Syria
• North Korea
• Sudan

How Suitable is Bybit for Beginners?

Right off the bat it’s important to note that Bybit isn’t suited to beginners. The practice of leveraged trading can result in higher losses than first expected, and the volatile nature of futures markets makes them a part of the crypto sector best left to more experienced traders to navigate.

Having said that, Bybit provides a number of resources that allow experienced traders to continue to brush up their skills and improve their trading knowledge. These include the Bybit testnet and demo trading feature, and a Support Center which includes an extensive FAQ section which covers common questions that users may have.

Quite importantly, ByBit also offers live chat functionality and dedicated emails for customer/IT support. The team also make sure to maintain a wide range of social media channels including a Telegram group and Facebook page which helps to keep them easily accessible.

Other handy features include comprehensive trading charts via integration with TradingView, the mobile app available for both IOS and Android devices, and the API tools which allow you connect trading bots or any other apps which require data from Bybit.

In addition, the lack of trading limits, high liquidity levels, and the incorporation of a wide range of order types suit more experienced practitioners and the platform has been designed to be able to service the requirements of high frequency traders.

More active traders may also be interested in the Bybit Referral Program which sees a $10 bonus payment being given to anyone who refers a friend to the platform who goes on to deposit at least 0.02 BTC.

Bybit’s Referral Program

As a final note, it is also worth mentioning that Bybit offers users the chance to earn referral bonuses. For every new member that you are able to refer, you will receive the Bitcoin equilievent of 10 USD.

The user that you refer does need to deposit at least 0.02 BTC. At the time of writing, the referral bonus is only available for those funding their account with BTC, meaning that ETH, XRP and EOS deposits will not allow you to claim the bonus.

How Secure is Bybit?

The exchange has managed to remain resilient with regards to any potential hacks, but this is to be expected given its relative youth. The team behind Bybit make use of a range of security protocols which include full SSL encryption on the website to protect all your personal information.

User accounts are also protected via two-factor authentication (2FA), which can take the form of email, SMS, or external app verification.

Bybit also maintains that 100% of clients’ funds are stored using a Deterministic Cold Wallet System, and only small amounts of funds are kept in hot wallets to allow for immediate withdrawals.

Using a multi-signature cold wallet system enhances the platform’s security and the team also process withdrawals manually three times a day in order to limit the possibility of hackers gaining access to funds.

The team have also developed their Grey release update system which sees platform maintenance conducted “on the go” which results in minimum downtime, and provides traders which continuous access to live trading, thus limiting the possibility of “lost” trades. In order to ensure smooth and efficient trading Bybit derives its index prices by taking data from three exchanges, namely Coinbase Pro, Bitstamp, and Kraken (33.3% each) and also makes use of an insurance fund that keeps users’ funds protected even if a number of adverse situations were to occur.

Insurance Fund

The fund is designed to decrease the possibility of Auto-Deleveraging, and when a liquidated order is closed at a price worse than bankrupt price, Bybit uses the balance of the Insurance Fund to cover the gap. Here, Auto-Deleveraging is only triggered when the Insurance Fund is insufficient.

During liquidations the balance of the Insurance Fund increases and decreases depending on the price difference between the final Liquidation Price and the Bankruptcy Price of each liquidated position. As a result:

• When liquidations can be executed in the market at a price better than the Bankruptcy Price, the remaining margin will be added to the Insurance Fund.
• Conversely, when the final execution price is worse than the Bankruptcy Price, the contract loss will be covered by the Insurance Fund.

As an example, a trader having a long position on BTC/USD with the liquidation price at 7,000 USD and Bankruptcy price at 6,950 USD will have this position liquidated once the Mark Price hits 7,000 USD. If this position can be liquidated at any price higher than 6,950 USD, then the remaining margin in BTC will be donated to the Insurance Fund. Also, if the final execution price is lower than 6,950 USD, then the Insurance Fund will be used to cover the contract loss.

In the event that the Insurance Fund is insufficient to cover the gap between the final execution price and Bankruptcy Price, the entire liquidation gets taken over by an Auto-Deleveraging System. Bybit users can keep a track of the current balance of the Insurance Fund by checking the Daily Insurance Fund Balance.

Conclusion

Having been founded in March 2018, Bybit is still a relatively new operator in terms of cryptocurrency derivatives trading but has emerged as serious alternative to more established platforms such as BitMEX.

While it’s suitable for a wide range of traders and provides valuable resources such as the testnet which allows extensive demo trading to take place, Bybit shines with regards to catering for more experienced high volume/frequency traders.

The lack of KYC requirements in addition to no real trading or deposit/withdrawal limits being implemented on the platform suit anyone looking to trade in large amounts anonymously, and the consistently high liquidity levels also suit anyone looking to take advantage of sudden market swings by making swift deposits onto the platform.

Despite still developing as a platform, Bybit incorporates a solid range of technical, security, and trading features that will enable it to establish itself in the midst of a growing amount of competition as an increasing number of crypto exchanges throw their hats into the futures trading ring.

All in all, Bybit suits anyone engaged in crypto margin trading, and provides a viable alternative to the services already being offered by exchanges such as BitMEX, PrimeXBT, Huobi, and Deribit.

Once again, as margin trading isn’t really suited to less experienced traders or anyone near the beginning their trading journey, it’s probably a good idea to create a testnet account and spend a considerable amount of time conducting demo trades with testnet funds in order to determine if margin trading and/or Bybit is the solution that you are looking for.

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